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Wednesday, November 25, 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 – 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.
  • INDIANAPOLIS – How much money flows across Indiana county lines each year? According to the U.S. Bureau of Economic Analysis, in 2018, the in-flow of earnings to Indiana counties from places both within and outside the state was $74 billion or 36% of the earnings received by Hoosier residents. Does that resonate with you? It demonstrates why informed people stress real regionalism. Real regionalism recognizes the opportunities, the costs and the benefits of workers moving between counties. It means facilitating and, where appropriate, funding commuting. That is the philosophy behind the massive expenditure on extending the South Shore Line from Hammond to Dyer in Lake County and improving the service between Gary, Michigan City and South Bend. That same motivation is behind the long-term effort of Indianapolis to extend its public transit system into the surrounding counties.
  • INDIANAPOLIS – I’ll confess. Last week, I walked the line between growth and contentment. All right. I’m for economic development. My vision of economic development involves non-economic improvements. My ideal Indiana does not have decaying cities and suburbs that pretend they are cities. My ideal Indiana transforms itself from a stagnating mid-19th century state into a 21st century partner in the development of this country. In my Indiana, Hoosiers welcome cooperation with others in forming more effective institutions. They cease their incredible resistance to regional cooperation and dispense with the fake “regionalism” of current institutions. A few examples: Counties need to go through the process of internal consolidation. We have too many local governments. Most are antiquated ego enrichment programs enabling inertia. They are bolstered by state money for regional agencies which funnel money to local entities for questionable projects.
  • INDIANAPOLIS – For many readers data do not matter. Any number can be satisfactory or disturbing according to their beliefs. It’s like the protests on the streets. Some hear anguished cries for justice while others see mobs tearing the social fabric. Nonetheless, let’s look at the data. Real GDP measures the value of goods and services produced by business and government in the market economy, independent of inflation. When divided by population, Real GDP becomes Real GDP per capita where that output is produced. It can be interpreted as the capacity to produce for the people what they expect from the economy, what the people demand of the economy. Since some portion of Real GDP is exported to other communities, it also reflects what the world chooses to buy from a given place. Exports, however, rise or fall as local businesses decide to seek customers beyond local, state or national borders. Therefore, exports too reflect the local population’s world view. Real GDP per capita for Indiana in 2008 was 9.2% below the national figure, ranking 31st among the 50 states. Ten years later, we were 13.6% below the U.S. and in 33rd place. Over those years, our Real GDP per capita grew by 6.0%, 29th in a nation expanding output per capita by 11.0%.
  • INDIANAPOLIS – Hank Hoosier explains his low income by saying, “We have a low cost of living in Indiana, so our incomes doesn’t have to be as high as elsewhere.” He pays no attention to me telling him, “Your low income is why your cost of living is low.” Today, I just lay it out flat for him. “Inflation is all we really know about. We don’t know beans about the cost of living. The Consumer Price Index (CPI), which so many people incorrectly call the cost of living, is just what it says it is, an index of consumer prices. “The cost of living is hard to define. We all have a different idea of what standards should go into that concept. It can get rather personal, tied up with our expectations. We can know actual rental and grocery prices plus the quantities bought and then compare them over time. But a “cost of living” is a different beast for which we don’t have any official measure.” 
  • INDIANAPOLIS – Flora Fetid, our friendly former neighbor, was visiting, sitting eight feet away, as currently fashionable. “Fred and I,” she said, “are going to rent out our house when we go to Morocco. We’ll be gone about a year and it makes sense.” “Oh my,” I said. “I hear that’s ‘a country of dizzying diversity.’ Will you be on the Atlantic or Mediterranean coast? “No, idiot,” she said sweetly. “We’ll be continuing our research about families of Newton County and elsewhere along the Kankakee River. Morocco’s the perfect location.” “Exciting,” I responded. To cover my geographic error, I asked, “For how much will you rent your house?” “We don’t know,” Flora replied. “How much would you say?”
  • INDIANAPOLIS – With apologies to Rod Serling, consider, if you will, Rob and Rhonda, two ordinary Hoosiers doing what they customarily do each weekday in the Economic Zone. Rhonda leaves the house to be at the job site by 7 a.m., hard hat on, blueprints in hand. Rob takes off at 8:10 with the kids for elementary school and then to the public library where he will drive the bookmobile and serve as its librarian until mid-afternoon. Rhonda is proud of the building her crew is constructing to green standards with the latest technology. Rob delights in bringing reading opportunities to people who find it difficult to reach a library branch. Both are warm-hearted do-gooders. Neither is prepared for the crushing truth about to fall on them. Clouds darken over the city. Lightning flashes and thunder rumbles in the distance. A voice without a direction says softly, but for all to hear, “From this time forward, you will all pay for the costs you impose on others. You are not being punished. You are merely doing right.”
  • INDIANAPOLIS – Recently, we examined the median incomes of all households in the nation and Indiana, with a special focus on Black households. Now, let’s look more broadly within our state. The Census Bureau provides median household income data for 2018. The racial or ethnic characteristic of a household is determined on the basis of the person responding for the household. Therefore, if a Black person answers, the household is considered Black despite the partner of that person being Asian. It’s imperfect but has both statistical and practical validity. The median, you will recall, is where half of all households are above and half below the reported number. The 2018 median income for all households in the state was $55,746, ranging from $94,644 (Hamilton County) to a low of $42,217 (Blackford). Black households (9.3% of all Indiana households) reported a median income statewide of $32,290, going from $83,588 (Putnam) to a low of $20,271 (Miami). Counties with small minority populations may give rise to results with large margins of error.
  • INDIANAPOLIS — Let’s go shopping. The most recent data (2018 from the Census Bureau’s County Business Patterns) tell us that Indiana supported more businesses associated with autos than food. The count was 8,700 to 3,600.  Restaurants are not included; no one I know says, “Let’s go shopping at Swill Burger.” Yes, it’s distressing. Auto and truck dealers, parts suppliers, and gasoline stations are more than twice as common as places to buy food. Of course, this Covid-19 has restaurants now specialized in take-out food, thus again destroying our carefully constructed statistical structures. Indiana has 571,000 business establishments, of which one in nine (10.9%) is engaged in retail trade. Oh, we did in 2018, but how many will we have in 2021?
  • INDIANAPOLIS  — I salute the unexpected bravery of the Indiana Utilities Regulatory Commission. Knowing the lobbying to come, on June 29 the IURC rejected a request from a gaggle of Indiana electric utilities to charge customers for power not used because of the virus sequestration. Now, to get this straight, think of your favorite restaurant. It has been closed for a while. Its revenues are down from what they might have been because you and other customers were not there. Today, they are open, and their prices might be increased to make up for the revenue they did not get while they were closed. You could be charged for the meal and the beer you did not consume. Or you could go elsewhere. Who should bear that loss? You? The restaurant workers? The suppliers? The owners? In the case of these monopolies, these utilities, it’s no different. Except the customers are stuck. There is no convenient substitute today for electric service.
  • 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.
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  • 65% of Hoosiers voted in November election
    “We continue to see that candidates and issues drive turnout. Presidential elections tend to have higher turnout rates. That held true this year with 65% of Hoosiers turning out to vote, the highest percentage we’ve seen since 1992.” - Indiana Secretary of State Connie Lawson, releasing totals for the Nov. 3 election which saw 4.7 million Hoosiers vote. In 2016 and 2012, voter turnout was at 58%. In 2008, 62% of registered Hoosiers voted in the General Election. Hamilton and Wells Counties had the highest turnout in the state with 75% turnout, followed by Greene, Hancock, Whitley at 74%.
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  • Trump and Biden priorities

    With American pandemic deaths crossing the 250,000 threshold, President Trump made calls to Michigan local election officials and is inviting legislators to the White House, while President-elect Joe Biden was talking to stressed out front line medical workers. That explains their priorities. Trump is attempting to undermine the American election system, with a Reuters/Ipsos Poll showing that 68% of Republicans now believing the election was "rigged."

    There are Republicans beginning to speak up (though none from Indiana). “Having failed to make even a plausible case of widespread fraud or conspiracy before any court of law, the President has now resorted to overt pressure on state and local officials to subvert the will of the people and overturn the election," said Sen. Mitt Romney. "It is difficult to imagine a worse, more undemocratic action by a sitting American President.” And Sen. Ben Sasse said, "President Trump lost Michigan by more than 100,000 votes, and the campaign and its allies have lost in or withdrawn from all five lawsuits in Michigan for being unable to produce any evidence. Wild press conferences erode public trust. We are a nation of laws, not tweets.” The damage to our most precious American cornerstone is stunning, disgusting and sad, and the whole world is watching. - Brian A. Howey, publisher

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