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Wednesday, July 8, 2020
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Thursday, December 5, 2019 2:55 PM

How’s business? “Wonderful,” is the answer you’ll probably get from those who only know the stock market continues to rise. 

How is business in Indiana or in your sector of the economy? That answer is often hard to find. 

  • INDIANAPOLIS — One of the strangely brilliant slogans of the Bush II administration’s wars in the Middle East was “the Alliance of the Willing.” This came to mind when I read the recently released Indiana Chamber of Commerce report, “INVision-2025, 2020 Snapshot.” The report is a wonderful agglomeration of statistics concerning Indiana and its workforce regions. It is a task well-conceived and skillfully executed. The Chamber’s report is very informative about where Indiana stands among its neighbors and its peers. I urge you to examine it online. It spells out many of the inadequacies of our state and a few of our better metrics. It’s not the standard fluff you might expect from the Chamber. But something was missing. There is nothing I recall seeing about the level of taxation. There are specific suggestions to remove nettles in the corporate corpus. Yet, with the level of taxation not addressed, the level of expenditures is ignored. Thus, raising the question of how willing are Hoosiers to support the Chamber’s goals?
  • INDIANAPOLIS - Some see the protesters and their eyes fill with tears. Others, however, only see the looters and their hearts fill with rage. The looters are opportunists taking advantage of a storm raised by the protesters. Some protesters are the thunder released by the guilt of being silent too long. And those of us who do not rise up in protest, who allowed decades of injustice to pass, we wait out the storm, knowing without our efforts the clouds will never disperse. Whether we protest now or not, by our prior silence we have been complicit in an injustice. No matter how sophisticated the analysis of the data, one simple fact summaries the result of many factors contributing to the conditions faced by African Americans: The median income of African American households in the Unites States was 33% below that of all households in 2018. Indiana’s African American households were 38% below all Hoosier households.
  • INDIANAPOLIS — Citizens are the final line of defense against misdeeds by business and government. Often these social soldiers are derided as cranks obsessed with unwarranted concerns of environmental, health, and safety matters. Business and government are simultaneously seen as irresponsible and unresponsive. They plunder, endanger, defile, and destroy communities too weak or too greedy to resist the “investments” being proposed. These conflicts characterize American history. Early on, with so much open land and little understanding of nature, questionable “progress” was invited to move further away, somewhere down stream, somewhere out of sight. But real progress is an inexorable force benefiting many despite any adverse consequences for the few.
  • INDIANAPOLIS — Everyone seems to be wishing we’d get back to normal from our attempts to evade the enemy virus. I earnestly hope we move ahead from normal. Let’s aim for something better than the normal we have known since the end of WWII. Last week the Bureau of the Census released the 2019 population estimates for cities and towns across America. I eagerly downloaded the Indiana data anticipating an article about increases and decreases among nearly 600 Hoosier hometowns. Yes, there is a story there. The 567 cities and towns (the incorporated places) of Indiana gained 265,700 residents between 2010 and 2019. That’s 17,300 more than the entire state. Much of that is rearranging the chairs on our landlocked cruise ship.
  • INDIANAPOLIS — We are endowed with 24 hours each day. That, in a sense, makes us all equal. However, if we have it, money can be substituted for time. Thus, from here to there, the poor man walks for a longer time than the rich man rides. Our use of time is, partly, a measure of the value we place on an activity. Most economic information about us is expressed as money spent by individuals and households. We are called consumers. In truth, we are both consumers and investors. An automobile and a lamp are both investments which we will use in varying amounts over many years. Or which we won’t use, but will have the option to use, which itself has value. Economists have been occupied for generations trying to put a dollar figure on time spent. What’s the value of outdoor recreation? When I started studying economics, 60 years ago, that was a hot topic. It remains so today.
  • INDIANAPOLIS — Between 2008 and 2019, from the Great Recession to the most recent year in which “The Best of Times” was proclaimed, the nation’s Gross Domestic Product (GDP) averaged 3.5% growth annually. The West Region (AK, CA, HI, OR, WA), as defined by the Bureau of Economic Analysis, was the fastest growing regional economy in the nation at 4.1%. The Great Lakes (IL, IN, MI, OH, WI) managed to be seventh of the eight regions by averaging 3.10%, thereby beating out the bottom dwelling New England Region by a robust 0.02%. If you didn’t get lost in those postal abbreviations of state names, you noticed a spread among the regions of just one percent per year in GDP growth. Put that way the difference is small. But over the course of 11 years, that’s a 56% increase for the West Region and a 40% increase for the Great Lakes and New England.
  • INDIANAPOLIS - Last week I planned to extend my discussion of Indiana regionalism, if nothing more exciting comes along. Two referenda on the June 2nd Indiana primary ballot in my area diverted me from that course. Washington Township Schools, (WTS, Marion County) seeks approval of two school district bond issues. You may have similar matters to decide on your ballot. Because I respect the educators, their programs and results at WTS, I will vote for the Operating Bond issue. This provides $16 million annually for eight years in the WTS budget. Those funds enable both improved compensation of all personnel as well as additional teachers. However, I will vote against the $285 million Construction Bond issue to revamp and improve classroom, athletic, and transportation facilities.  It is time to think and act big on changing American education. And I’d start at home where good education is already available. Why? Rightly or wrongly, Americans blame schools and parents when children are not adequately prepared as citizens or workers. The consequence: our everyday quality of life (our culture) is diluted.
  • INDIANAPOLIS  — Nothing focuses our attention on the future like becoming a grandparent. From the day the first grandchild is born, we see the world differently. Suddenly, our hopes and fears extend well beyond the present to decades far away. The COVID-19 virus is changing our calendars. Thus, my granddaughter in Maryland has postponed the wedding to her firefighter husband-to-be from May to August. He was a Marine who chose a profession in which he could serve others. As a first-responder to medical emergencies, his life and their lives are on today’s front lines. Their future is our future. With this killer virus afflicting the planet, we want to return to life as it was just a few weeks ago. However, our burden today -- constrained interactions, limited economic activity, and legitimate fear of what is yet to be for ourselves, our families, our communities -- will pass. The big question is: What will we learn from this world-wide catastrophe? Can we use these days of enforced idleness as a foundation for improving our lives, not just returning to what was, but developing what should be? We should have learned from our viral “vacation” there are no national boundaries for sunshine or storms. There is but one world of the environment and human activity. Walls may be built, edicts proclaimed, but nature and human desires deny all borders.
  • INDIANAPOLIS  — State Senator Barry Ballyhoo called last week. “How ya doin’, boy?” He asked the familiar question during this era of sequestration. “OK,” was my reply. “Well, youngster,” he said. “I was ruminatin’ about this here computer census. We done filled out our online form. ’Twasn’t any problem. But it done left me wonderin’ if anybody really cares.” “Oh, Senator, you can bet they do,” I replied. Then I repeated the many reasons Hoosiers have a stake in the census: The federal and state money distributed by formulas using population data, the drawing of political boundaries, and not incidentally, the issuance of permits by the alcohol and tobacco commission. “Yes, yes, I know all that,” he said impatiently. “But do Hoosiers care? Does it bother them last week’s figures show 55 of our 92 counties shrank in population between the census in 2010 and the estimates for 2019?”
  • INDIANAPOLIS  —  The virus pandemic has disrupted our lives and, in many cases, done serious harm to our livelihoods. Working from home helps some, but not all workers can benefit. Without such serious disruption, we take commuting for granted. Most Hoosiers work and live in the same county, but there are many who cross county and state lines for work. In doing so, they move a lot of money. According to the U.S. Bureau of Economic Analysis, in 2018, workers in Indiana earned $220.6 billion. But not all of that appeared in their paychecks. They, and their employers, contributed $24.7 billion (11.2%) to federal government insurance programs (Social Security, Disability Insurance, Medicare, etc.) that provide our economic safety net. Thus, working for Hoosier businesses and governments netted $195.9 billion. Yet, as we know, “foreigners” from Illinois, Ohio, Michigan and Kentucky come into our state and take home money earned here. Fortunately, Hoosiers also cross state lines and bring back money they earn in those “alien” lands.
  • INDIANAPOLIS  — I didn’t title this column “Women at Work” because it suggests only women who are employed are working. At the same time, I don’t do what the Bureau of the Census has done in a recent graphic release: Provide you with only the most recent differentials between the earnings of men and women. Truth requires context. And the truth is, as it has been for ages, women earn less than men. In 2018, the most recent year available, the median earnings of women employed in all types of jobs, full-time, year-round, was 81.2% of men with the same employment profile. This figure is the most recent measure of the economic disparity between men and women employees. What we aren’t told is about a  two-point improvement in the relative earnings of women from 79.2% in the preceding five years. Nor do we see the deterioration of the relative earnings of African-American and Hispanic women vis-à-vis men of the same description
  • INDIANAPOLIS  — The first warmish day brought forth green shoots of nascent flowers. And, lo, Faye of the Forest was on my deck railing, feisty as ever. “You waste a lot of time,” she announced. Not waiting for my defensive counter-thrust, she continued, “Every week you turn data sets into kindling for your writing fire. You spend hours on spreadsheet manipulations. What you want is already out there, done by others and available for free.” “And you know this how?” I asked. “I have my ways,” she said coyly, tossed her hair as women do, and flitted off into the forest. She was right! Last week, the Brookings Institute posted economic comparisons of the nation’s 192 largest metropolitan areas. Indianapolis was in the group of 53 metros with over one million persons and ranked 27th in growth of jobs, Gross Metro Product (GMP) and change in jobs at young firms, from 2008-18.
  • INDIANAPOLIS  — The spread of the coronavirus is serious. It should not be taken lightly, nor need we over-react and assume damages that may not occur. To prepare is appropriate. To assume what could happen, will happen, and already has happened, is foolhardy. The stock market response has been irrational and irresponsible. Irrational because we can respond appropriately with careful direction of resources by the professionals who understand the needs. Putting a bunch of political appointees “in charge” is only a theatrical step. Irresponsible because it gives rise to a panic, a media frenzy, and a misdirection of our attention from the preparation actually required. 
  • INDIANAPOLIS  — This week there’s nothing but good news to report about Indiana. Many readers will say this is long overdue. Rightfully, they want to feel good about our state, to read about our achievements and opportunities. Enough with ugly clouds of statistics, let’s celebrate the sunlight. We open with a report from the cheery folks at the Tax Foundation who discovered, in the depths of data from the Bureau of the Census, federal aid was 38% of Indiana’s total state general revenue in FY 2017, the most recent year of data available.  The national figure was a mere 23%. Indiana ranks 10th highest among the 50 states in reliance on federal funding. After years of complaining about not getting our fair share of federal aid to states, we’ve broken into that elite quintile, just behind West Virginia and a fraction ahead of Kentucky. Still, some Hoosiers yearn for those days in the 20th Century when Indiana refused to seek or accept federal funds. But now we’re hep, we’re woke.
  • INDIANAPOLIS  — Owen Greene lives a quiet life in Southwestern Indiana. He’s learned not to challenge the opinions of his neighbors. Yet, this past week he called me with a question: “Are wages lower in Indiana because our cost of living is lower than in the rest of America?” “No!” I said in my most controlled manner. “Employers like to tell workers that’s the reason wages can be lower here than elsewhere, but that’s not the truth.” “You mean they’re lying?” Owen looked surprised. “They’re not lying, Owen,” I said. “They just accept a popular fiction, an easy story to believe.” “But it makes sense,” Owen insisted. “Workers won’t demand as much in wages, if the cost of living is low.”
  • INDIANAPOLIS  — Most folks have an intuitive understanding of Gross Domestic Product (GDP). They know GDP measures the current activity of the nation’s legal economy. The change in annual GDP is the definitive statement about our national economic performance. It’s far better than the monthly unemployment rate or the jobs numbers to assess that performance. At the same time, Hoosier politicians seem unaware that GDP figures from the US. Bureau of Economic Analysis are now out there for states and counties. Indiana’s GDP figures don’t tell the same story as we get from those officeholders. Simply put, in the last 20 years (1998 to 2018), Indiana has exceeded the national GDP growth rate only six times. And not once since 2014. We have seen Indiana’s share of national GDP fall from 2.05% to 1.77%. Doesn’t seem like much? That insignificant 0.28% was $57.6 billion in 2018 alone, an amount which would have raised our state GDP by 16%.
  • INDIANAPOLIS  — One night recently, in a moment of unusual calm, I sat down to read the 2019 Annual Report of the Indiana Department of Revenue. It’s handsomely produced. Lots of pictures with employees saying “cheese.” Far too short on meaningful data, as far as I’m concerned, but loaded with numbers only administrators could love. However, I was able to figure out that Indiana personal income taxes (state and local) amounted to $8.9 billion and accounted for 42% of the state’s $21 billion in revenue in fiscal 2019 (July 2018 to June 2019). Add to that sum $8.1 billion in sales taxes collected and you have households paying 81% of the Revenue Department’s collections. This, of course, doesn’t count gambling, motor fuel, and other taxes passed along to customers by the businesses building taxes into their prices. The direct tax on corporate income is a spectacular 4.7% of total tax collections.
  • INDIANAPOLIS – Ever buy hamburger? You pay more for less fat and more beef. I think of that whenever I hear about the blatant incompetence and arrogant ignorance of state or local government workers. Want less fat and more beef? Pay for it! The surprising element is so many excellent government workers remain diligent, dedicated and on the job. Some of these outstanding public servants report to unprepared elected officials or their political appointees. We don’t have sufficient numbers of people who understand their jobs and appreciate their responsibility to the public that pays them. But there is a light shining in the Governor’s office. Between Christmas and New Year’s Day, Gov. Eric Holcomb announced a range of pay increases for existing state employees. Based on merit reviews, employees can receive two, four, or six percent increases, beginning next month. That’s good. But recognize how bad it has been for so long and getting worse. In 1998, 20 years before our latest data, on average, Indiana paid state workers 22% less than the national average for state employees. In 2018, our state employees were paid 27% below the U.S. average. Indiana sank from 46th to 48th place among the 50 states in paying state workers, ahead of only South Dakota and West Virginia.
  • INDIANAPOLIS  —  As Gaul was to Caesar, so too is personal income divided into three parts by the U.S. Bureau of Economic Analysis (BEA). This is important because political leaders have latched onto per capita personal income (PCPI) as a favorite measure of economic well-being. They are wrong, but it takes generations for old ideas and politicians to be retired.   The first and biggest part of Hoosier personal income is what we earn as workers. That’s 64.3% for us (15th among the 50 states), slightly higher than the nation’s 62.6% in 2018. Both figures are down from their 2008 levels; about two percentage points nationwide and 1.5 points in our Hoosier Holyland. The second part of personal income is composed of what we “earn” on our investments: Dividends, interest, and rent. Note: Neither the growth of your holdings in the stock market nor the increased value of your house is included.

  • INDIANAPOLIS — The moving van pulls away leaving new people and their strange possessions next door. There is something different about them and the things they own. Something strange that suggests they are not quite like us, long-time residents of this place. Where do those strangers come from? We’re fortunate the U.S. Bureau of the Census has studied that question concerning persons who were one year of age and older in 2018. They found 84.9% of Hoosiers were folks who lived in the same house as they did in 2017. But that’s below the national average of 86%, and we rank 32nd among the 50 states (plus the District of Columbia). Hoosiers are less homebodies than other residents of this nation? Where did those strangers come from? Take heart! Indiana ranks 10th in the nation (12.4%) in terms of persons who moved within the same state in the last year. Those strangers may be from just around the corner, or as far away at Angola, Aurora, Mt. Vernon or Whiting. Thus, they’re not really strangers. Take them a welcoming casserole. Make sure you exchange cell phone numbers and don’t hesitate to give them your email address.
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  • NFLPA official says if you want football, 'Wear a mask'
    “If you want football to start on time, wear a mask.” - NFLPA assistant executive director for external affairs George Atallah, to Sports Illustrated in a story about how the COVID-19 resurgence is putting the NFL season in jeopardy. Teams are to report to training camp within three weeks while the United States is reporting over 55,000 cases a day. Multiple NFL sources expected many positive COVID tests among the 1,900 NFL players.
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  • Trump answers Hannity question on what he'd do if elected to a 2nd term
    “Well, one of the things that will be really great, you know, the word experience is still good. I always say talent is more important than experience. I’ve always said that. But the word experience is a very important word. It’s a very important meaning. I never did this before - I never slept over in Washington. I was in Washington I think 17 times, all of the sudden, I’m the president of the United States. You know the story, I’m riding down Pennsylvania Avenue with our first lady and I say, ‘This is great.’ But I didn’t know very many people in Washington, it wasn’t my thing. I was from Manhattan, from New York. Now I know everybody. And I have great people in the administration. You make some mistakes, like you know an idiot like Bolton, all he wanted to do is drop bombs on everybody. You don’t have to drop bombs on everybody. You don’t have to kill people.” - President Trump, answering this question from Fox News' Sean Hannity at a Wisconsin town hall Thursday: “What’s at stake in this election as you compare and contrast, and what are your top priority items for a second term?”
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