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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 – Last week, the U.S. Bureau of Economic Analysis gave us a first look at the three closing months of 2020. Indiana did well in the final quarter of 2020. Our Gross Domestic Product, after adjustment for inflation, (Real GDP) advanced at an annual rate of 5.1% compared with a 4.3% increase for the nation. A bit of chest thumping should be heard about now from state officials, although they probably can take but little credit for our economy. Perhaps it would be more accurate to say that, despite our lachrymose Legislature, Indiana’s private sector managed to respond well to the federal stimulus program and sustained the momentum of recovery from the COVID shock of earlier in the year. The year 2020 was composed of two very different halves. As usual, Indiana rode a more exciting rollercoaster than did the nation. The first and second quarters felt the full force of the pandemic. During those first six months, Indiana’s Real GDP declined at an annual rate of 20.3% with the nation going down by 19.2%.
  • INDIANAPOLIS – U.S. Senator Lamar Alexander (R-TN) has retired after 18 years of service. On leaving the Senate, he said, “Lately, the Senate has been like joining the Grand Ole Opry and not being allowed to sing.” His record in the Senate, and previously as governor of Tennessee (1979-87), was informed by walking 1,022 miles across the state in his 1978 campaign for governor. He saw that poverty was related to dreadful road conditions. If getting somewhere is a chore and getting services and visitors to your town is difficult, poverty is reinforced by the highways. He proposed linking each of the state’s 95 county seats by four-lane highways to the nearest Interstate. It’s a thought that ought to be considered by Indiana’s moribund legislature. It took generations to get U.S. 31 from Indianapolis to South Bend upgraded to four lanes and only recently has partial, additional modernization been completed.
  • INDIANAPOLIS – The Indiana General Assembly, which gets its share of bruises, is getting close to doing something very beneficial for some very sick children, their parents and their siblings. Hoosiers are fortunate to have the Riley Hospital for Children located in Indianapolis. It is nationally ranked in 10 children specialties. However, it is in Indianapolis. That’s not a bad thing, except if you are poor and live in a corner of the state. Imagine your family on Medicaid. Not Medicare, which is primarily for the older population, but Medicaid, the stepchild of health care in the United States. The federal and state governments share Medicaid costs with the states anteing up 34% of the fees paid to health care providers.
           
  • INDIANAPOLIS – Poverty is a human issue with many dimensions including race, gender, occupation, and geography. Its elimination is also multi-dimensional. When not battling with minority members, the dominate Republicans in the Indiana House of Representatives might attend to the plight of 868,000 Hoosiers (13.4%) below the poverty threshold. In the event it did not strike you, 868,000 persons in 2019 was about the same as the population of 43 Indiana counties combined. Before we go further, consider those poverty thresholds which include numerous benefits such as Medicare, Medicaid, SNAP, Social Security, pensions, etc. For a single person under age 65, the threshold is income of $13,064. A college student, working half-time at $12.56/hr., fits that description. Thus, Monroe and Delaware counties, with their relatively large college populations, lead the state with poverty rates in excess of 20%. Vigo and Tippecanoe are similarly college-impacted counties with large numbers of young, part-time workers.
  • INDIANAPOLIS – “I abhor the idea, but it must be given an airing,” she said. She in this case was the very proper Representative Roberta Righteous speaking to a small gathering of constituents via Zoom. “It’s nothing I could endorse, but my colleagues in the Indiana General Assembly entertain many more outrageous and vile ideas in each session,” she continued. “In Indiana, we maintain an image of wholesomeness, despite little supporting evidence. It’s time to drop that veil and present ourselves for who we are.” None of the Zoomers interjected a comment and Rep. Righteous went on. “Speaking plainly, Indiana needs to take some risk in economic development. Our state is rotting out while the core is absorbing the wealth, the prestige, and the power of a surging economy and an expanding population.
  • INDIANAPOLIS – “It’s cold out here,” Sorethroat complains. “Why are we under the east stairs of the Capitol building?” “Because I can’t go into the Statehouse as casually as I’d like since the legislative gators started their security checks,” I tell him. “Well, what do you want to talk about? Be quick!” he shivers with the cold. “We have several good folks from both parties in the General Assembly, yet when one senator proposes a cockeyed bill preventing Indianapolis and other cities from ever changing their names, the Senate approves it 36 to 11. Why?” I ask. “Oh, that’s just Jack. Grandstanding. He’s stirring up some bluster about Native Americans objecting to derogatory names beyond sports teams,” Sorethroat says, taking another drag on his mini-cigar.
  • INDIANAPOLIS – For a decade now, ever since the Great Recession, we’ve heard how Indiana is a great place to do business. It’s a story that workers hear and that legislators hear. And it might be true, if you are a business. But is it true, if you are a worker? Well, let me tell you why it is and is not true. Between 2010, when the economy was just coming out of the Great Recession, and 2019, when the economy was about to experience the Great Pandemic of 2020, earnings per job in Indiana grew faster than in the United States as a whole. That’s right, if you take the earnings of those on wages and salaries, plus net income of proprietors (farm and non-farm) and then divide that number by the number of jobs, the result is average earnings per job. For the U.S., those earnings per job grew by a 23.0% while Hoosiers racked up a gain of 23.7%.
  • INDIANAPOLIS – “This legacy is at risk” wrote Campbell MacDonald, principal clarinetist of the Fort Wayne Philharmonic and chair of the Philharmonic Players’ Association, last week in the Journal Gazette. That legacy of the 77-year-old orchestra is now endangered by COVID and the resulting dispute between management and its 65 musicians. We all know many restaurants have closed. In some cases it is like losing a valued friend. How do those closings compare with the loss of a symphony orchestra? Many community leaders are now realizing Indiana’s chief economic problem is a scarcity of cultural assets; Indiana’s 26 orchestras are among our vital community assets. They might be impossible to rebuild once gone. Assembling even a decent orchestra, let alone one of established character, is a virtuoso task.
  • INDIANAPOLIS – The “normal” economy of 2019 is our launching pad for the post-pandemic world. We’ll be able to measure changes with the U.S. Bureau of Labor Statistics (BLS) data on wages for 725 occupations in each of the 50 states.In 2019, the average (mean) annual wage in Indiana, for all occupations, was $46,770. The median wage was $36,960, which tells us half of Indiana’s  workers made less than half more than that amount. In 2019, our average wage was 27% ($9,810) higher than the state’s $36,960 median wage. The average wage is almost always higher than the median wage. A few high paid executives and managers can boost the average wage way over the median. Many companies boast of their average wages giving the impression they pay their workers well. Indiana’s average wage in 2019 was 9.7% ($5,004) below the average for all states; our median wage was 8.2% ($3,320) below the median for all states.
  • INDIANAPOLIS – The COVID-19 pandemic inflicted sustained pain and hardship on too many for too long. The effect on our economy, however, is mixed. The shock to the economy occurred in March and April of 2020. In the United States, 24.7 million persons lost their jobs. Of these, 16.3 million (66%) were added to the numbers unemployed and 8.4 million left the labor force. During this recovery, through November 2020, 16.9 million persons have found new jobs or returned to previous positions. The number unemployed declined by 12.2 million and 4.6 million have come back into the labor force. (Don’t fret about the rounding problem with the numbers.) This partial recovery leaves us 7.8 million shy of the February employment numbers, distributed as 4.0 million unemployed and 3.8 million out of the labor force.
  • INDIANAPOLIS – Yes, this is the third column on townships. Be patient; the end to this series is in sight. Originally, townships were to be perfect squares of six miles in each direction, or 36 square miles. They were to maintain public roads, provide public education, provide relief for the poor, and help maintain public safety. Today, the average Indiana township has 35.5 square miles of land area. That fact would make the surveyors who laid out our townships pretty happy. However, Union Twp. in Montgomery County. is the largest at 111.6 square miles, while Albion Twp. in Noble County has but 3.8 square miles. Why? Because the Indiana legislature in the 19th century was inclined to go along with what local folks wanted. In the 1800s, many elected officials didn’t care whether counties and townships fit what some Easterners thought would be best back in 1787. Ask your neighbors or your representatives in today’s General Assembly, “What do townships do?” They may tell you those governmental units provide poor relief. This is almost perfectly true.
  • INDIANAPOLIS – If you missed last week’s column, it was an introduction to Indiana townships. That topic is continued this week and will appear several more times before the year ends. “Why?” is a very good question. For years, decades in fact, thoughtful people as well as ignorant people, have said, “It’s time to get rid of townships.” I feel it is reasonable for us to know something more about the subject before we consider any action. Hence, it’s time you knew the 35,826 square miles of land in our Hoosier state are divided, not only into 92 counties, but also into 1005 townships, four cities and towns which have replaced townships in Boone and Delaware counties, and one small military training facility (Camp Atterbury in Bartholomew County). We will refer to all 1010 units as townships for our purposes. LaPorte County in Northwest Indiana hosts 21 townships followed by Allen County with 20 and Jasper County with 17. These three counties are also the state’s three largest counties in land area. It makes sense since each county and its townships were set out according to plan based on the Northwest Ordinance of 1787.
  • INDIANAPOLIS – Readers have petitioned for columns that ignore our dysfunctional politics, disrupted economy, and medical calamity. I am compelled to comply. What could be more neutral, more emotionally void, and more sleep-inducing than a focus on Indiana’s townships? In truth, I must alert you to the fact we have lost three townships since the 2010 Census. Their departure was not widely broadcast beyond the borders of their two counties, Boone and Delaware. No sympathy cards are expected. In Boone County, as you might have heard, has seen considerable growth. Whitestown and Zionsville engaged in very suburban competition for present and future tax base. This is what passes for foresight in suburbs. In the process Eagle and Union Townships were absorbed.
  • INDIANAPOLIS – President-elect Biden has selected his COVID-19 Task Force. It is peopled by medical, scientific and health practitioners and administrators. Unencumbered by disbelief and gross incompetence, they can provide the best approach at this stage of the pandemic. In the parlance of sports, this task force will devise a game plan. But, as they and we know, a game plan requires execution and adaptability to both anticipated as well as unanticipated conditions. From my standpoint, a second task force is needed. It is not sufficient to know what needs to be done. How do we get compliance with what needs to be done? We have been told to wear face masks that cover our mouths and noses. This is a primary means of protecting ourselves and others from the virus. Many businesses post signs saying, “Masks are required to enter here.” To what extent is that requirement enforced? We have all sorts of useful data on the pandemic, but I’ve not seen compliance data.
  • INDIANAPOLIS – Now that America is once again singing, “Don’t Stop Thinking About Tomorrow,” it’s appropriate to think about how we think. Typically, we think about people as people, which is all well and good. Sometimes we should think about people as they live in households. Often, households are a better unit of analysis. They are the social and buying units for appliances, newspapers, magazines, and turkeys. Yes, the number and characteristics of persons in a household, and their wealth, make a difference. But just increasing a household’s size doesn’t automatically increase the number of bathtubs, avocados or chess sets bought and used. Periodically, the U.S. Census Bureau issues an American Housing Survey (AHS). It’s smaller than other surveys done by the bureau. Indiana has too few people to have a report of its own. Our data are combined with those from Ohio, Michigan, Illinois and Wisconsin. Census calls that five-state area the East North Central Division. Others know it as the Great Lakes Region.
  • INDIANAPOLIS – Billy and wife Billie visited over the weekend. “Well, go ahead, tell him,” Billie declaimed as she slid into a rocking chair, glass of iced tea in hand. “I’m tired of explaining what he couldn’t be bothered to learn, bull-headed creature that he is.” “What’s the problem Billy?” I asked. “My boss,” Billy, who isn’t too generous with words, said. “His boss, my foot,” Billie interjected, obviously intending to be the color commentator to Billy’s play-by-play. “What about your boss?” I asked. “Cut our pay by 50%,” Billy said.

  • INDIANAPOLIS  — Last week in this space we learned the number of jobs in Indiana declined by 91,100 between March and August 2020. This decline was attributed to the pandemic. Now let’s look at the output and income effects experienced by Hoosiers. The U.S. Bureau of Economic Analysis has released estimates for the second quarter of 2020, when Covid-19 had its greatest impact. Before that we were hardly in a period of robust growth. There was slow growth nationally and in Indiana from the first quarter of 2019 to the same three months (January through March) in 2020. Without adjustment for very moderate inflation, the nation’s Gross Domestic Product (GDP) rose by a modest 2.1%, with Indiana just behind at 2.0% (24th among the 50 states). When the pandemic struck in the second quarter of 2020 (April through June), the U.S. suffered a GDP decline of 32.8% at an annual rate, with Indiana again not far off at -34.1% (29th among the states).
  • INDIANAPOLIS  — How bad the job loss was in the United States depends on your starting and ending points. If we take March 2020 as the last “normal” or pre-covid month, with August as our latest data point, then national job losses just exceeded 10 million. Yet, just three states (California, New York, and Texas) account for one third of that 10 million. Indiana is among the 38 states in the bottom third of that distribution. Indiana accounted for 91,100 (2.9%) of that 10 million job loss. While 10 million jobs nationally represented a 6.6% drop in wage and salary jobs from March, Indiana’s 91,100 loss was only 2.9% of our March jobs. That’s the basis for the Hoosier Happy Hour at the Statehouse; Indiana ranked 47th behind Hawaii in percent of jobs lost due to the virus. Only Utah, Mississippi and Idaho were more fortunate than we.
  • INDIANAPOLIS  — While the legislators are home telling their constituents just how wonderful they have been recently, the east entry to the Statehouse is closed for repairs. Thus I was surprised when I heard the rasp of a familiar voice coming from the back of the statue of Gov. Morton. It was Sorethroat, my longtime conduit to all matters political below the radar. “Where ya goin’?” he asked, approaching the fence that separated us. “To lunch,” I replied. “Lunch,” he said. “With the price of cigs so high, I don’t do lunch anymore. But I got something you could chew on.”  “What’s that?” I asked. “The hot topic for the legislature of 2021-22. It’s going to be a barn-burner, so to speak. Where are people moving within metro areas?” he said. “You’re pulling my leg,” I responded.
  • INDIANAPOLIS  — Calm down! It’s been like this for a very long time and it won’t get better because you just discovered you don’t like it. The revelations about Mr. Trump’s tax returns fomented great indigestion. But why? Your neighbors down the road are doing the same, just on a different scale. Every tax season, big retail accounting chains – can you say H&R Block? – guarantee every credit, deduction and exemption you’re entitled to. The problem is, your life is so uncomplicated, there are hardly any credits, deductions or exemptions you’re entitled to. Mr. Trump says he is a real estate developer. He puts together deals with other people’s money (and a bit of his own) to reshape our cities and countryside. Hotels, offices, condos, retail space, restaurants, golf resorts, and other new facilities are his specialties.
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  • Holcomb vetoes emergency powers bill
    “I firmly believe a central part of this bill is unconstitutional. The legislation impermissibly attempts to give the General Assembly the ability to call itself into a special session, thereby usurping a power given exclusively to the governor. Avoidable legal challenges during a state of emergency will only serve to be disruptive to our state.” - Gov. Eric Holcomb, vetoing a bill that would have allowed the Indiana General Assembly to call itself into special session during a public emergency. The bill had passed by wide margins in the Republica super majority-controlled House and Senate earlier this week.  Legislators are expected to override Holcomb's veto with simple majorities in the House and Senate, before Indiana courts rule on the constitutionality of the bill.
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  • HPI Power 50: Crisis shapes 2021 list

    By BRIAN A. HOWEY
    and MARK SCHOEFF JR.

    INDIANAPOLIS – After two decades of publishing Power 50 lists in the first week of January, this one comes in a true crisis atmosphere. As we watched in horror the U.S. Capitol being overrun by supporters of President Trump on Wednesday, the COVID-19 pandemic has killed more than 8,000 Hoosiers and 350,000 Americans, shutting down our state and nation for nearly two months last spring. While vaccines are coming, there will be a distinct BC (Before COVID) and AC delineations as this epic story comes to a close. It gripped like a vise key figures, from Gov. Eric Holcomb to Vice President Pence. It delayed an election, closed schools and restaurants, reordered the way we do business and buy things, and will set in motion ramifications that we can’t truly understand (like the virus itself) at this point in time. There’s another crisis at hand. It’s our society’s civics deficit, fueled by apathy that transcends our schools and societal engagement, and allowed to fester by a news media in atrophy. That three members of the Indiana congressional delegation – U.S. Sen. Mike Braun and Reps. Jim Banks and Jackie Walorski – signed on to a protest this week, induced by losing President Donald Trump to “investigate” widespread vote fraud that doesn’t exist, is another indicator of the risks a polarized and undisciplined political spectrum brings to the fragile American democratic experience.

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