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Monday, October 22, 2018
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  • INDIANAPOLIS – Allow me to put a few numbers before you to illustrate the problem with facts. I’m not referring to “fake facts” which is what real facts are called by the ideologically unbalanced. Some of these people are on the light-weight left and even more are on the degenerate right. The latest figures from the IRS based on income tax returns are for 2016.  In 2004, a dozen years earlier, the United States had 133 million individuals and households filing the 1040 income tax return. In 2016 that figure was up to nearly 150 million, a 12.6% increase. But it is money, not the number of returns, that counts and the Adjusted Gross Income (AGI) entered on those forms rose by 51%. As we look closer into the data, we find that returns showing AGI of $200,000 or more rose by 125% in numbers and 109% in dollars between 2004 and 2016. The $200,000+ bracket accounted for 2.3% of all returns in ’04 and 25% of AGI. It’s a lot of money for a small minority.
  • INDIANAPOLIS – It seems every Indiana county has a tourism agency. Some are very small, modest efforts working with tiny amounts of money from the private sector. Others are big time, by Hoosier standards. They have local tax money, thanks to local pressure on the state legislature which granted them the power to levy taxes on the customers of hotels, motels, restaurants, bars and cars. With big enough budgets, tourism expands from vacationers to visitors for any reason. The biggest prize is a national political convention of big-name big-spenders, lasting five days with contentious TV coverage. To hold these pow-wows of potted plutocrats, palaces must be constructed. Larger, more grand facilities must be planned and built by the public sector for the benefit of a city’s reputation and the enrichment of selected patrons. Even towns of smaller size lust after conventions of penurious professors or podiatrists.
  • INDIANAPOLIS – In case it has escaped your attention, America and Indiana are changing. Some of us cheer while others jeer; some of those changes are rapid while other are languid. Tradition, or stubbornness, keeps Indiana from changing as rapidly as the rest of the nation. According to the latest (2017) Census reports from the American Community Survey, the number of households in the U.S. grew by 4.4% between 2011 and 2017; Indiana added only 3.7%. Nonetheless, that’s more than 90,000 additional households. We don’t think in terms of households. Normally, we talk about the number of persons, the population, but households have different implications for a community, and its economy, than population alone. Households subscribe to newspapers and magazines. The number of households more than the population is a determinant of water, sewer and fire infrastructure. Households buy washing machines, dryers, air conditioners, de-humidifiers and coffee pots. 
  • INDIANAPOLIS - Last week the Census Bureau tried to shock Americans by reporting that “three-fourths of the nation’s businesses don’t have paid employees.” It’s a headline appropriate for Halloween. That was the 2016 reality of nearly 25 million firms in this country. How can that be? It’s easy to understand, if you just look around. Think about all those trucks on the nation’s highways driven by owner-operators. These are independent entrepreneurs who carry goods for one or more shippers. Often they bid for loads, stopping for coffee and to pray for falling fuel prices. However, before we celebrate these highway heroes of the competitive market place, let’s understand they face conglomerate trucking empires and shippers who press constantly for lower trucking fees. It can be a hard life, not only due to the ordeals of extensive travel, but as a result of the grinding nature of commercial independence.
  • INDIANAPOLIS – Recently, the Northwest Indiana Economic Forum presented an introduction to its five-year strategic plan. Most folks will tell you the seven NWI counties — Lake, Porter, LaPorte, Newton, Jasper, Pulaski and Starke — have had some tough years. Some will say it’s been rough going since the mid-70s. But history and its residue was cast aside as the audience of nearly 500 in Hobart was regaled with an impressive list of new investments made recently by relocating and existing businesses. No mention was made of jobs lost, ongoing pollution, or wage gains for existing jobs. Instead there was a flourishing of optimism, a recognition of a turning point, and declaration that now is the time to “Ignite the Region.” Only the pompoms and the boys’ band with 76 trombones were missing during the finale, as business leaders rose to pledge funding for the next steps.
  • INDIANAPOLIS  – At my grandson’s school, students are learning to think broadly as expressed in their adoption of Buzz Lightyear’s catchphrase, “To infinity and beyond.” While every media outlet seems focused on the hijinks preceding the 2018 elections, those contests are a mere prelude to the national circus in 2020. Mega-money, now being spent by partisan groups, will not compare with the sums flowing through the political arteries two years from now. Neglected in this process are the state legislative elections this year. The entire Indiana House and half the Senate are on the ballot. Those elected this year could (if they have the courage) restore integrity to the House and Senate district boundaries. Establishing a justifiable system for redistricting after the 2020 Census is an imperative that informed voters cannot ignore. Elvis would croon to us, “It’s now or never.”
  • INDIANAPOLIS  – We revel in stories about our cities and counties, but, aside from the sports section, rarely see anything substantive about school districts. School districts are more numerous than counties (289 to 92), and what newspaper has room for all that information which parents learn from their children anyway? School is just about the kids and most businesses that advertise don’t have kids for customers. Yet, Indiana’s school districts are very different one from the other. The latest comprehensive school district data are for 2016 in the American Community Survey, which is a five-year compilation, and who can tell what that means? For example, the highest rate of unemployment in that Census Bureau report was 10.8% within the district of Lake Ridge Schools of Lake County, while the South Knox schools, down in the Vincennes area, had a mere 0.9% unemployment rate.
  • INDIANAPOLIS - Employers tell us there aren’t enough workers in Indiana to fill all the jobs firms have open. How do they know this? Presumably this complaint is based on experience. Advertising, in one way or another, is not getting the jobs filled. The response all over the state is to say we need more training and we need to attract more talent to the state. Is it possible the talent is already here, but is being ignored? It turns out, according to the Census Bureau’s 2016 American Community Survey, 5.9 percent of the Hoosiers between 18 and 64 who had jobs were disabled. That was about 175,000 disabled persons holding jobs or 36 percent of the 486,000 persons with disabilities in the state. In all, Indiana ranked 19th among the 50 states in percent of the total population classified as disabled. Our 13.9 percent disability rate is somewhat above the nation’s 12.5 percent, well below West Virginia’s 20.1, and above Utah’s 9.0 percent.
  • INDIANAPOLIS – This is the way it starts. A few optimists get together. One says, “Wouldn’t it be great to commemorate [insert idea] right here in [our town]? “That’s a great idea,” says a second. “It could be educational, informative and patriotic.” Then a third offers, “It could bring tourist money.” The glow of gold suddenly fills the room. But the fourth, a skeptic, says, “All we need is an infusion of founders’ funds.” And here a dark cloud settles over the scene. No matter how virtuous, every project needs money to get off, and to stay off,  the ground. So, it is with the National Airmail Museum at Smith Field, Fort Wayne.
  • MUNCIE – The economic expansion is now a full nine years old, and we are less than a year from the longest period of uninterrupted economic growth in US history. This moment of good economic news holds some insight for many cities and towns in Indiana. It is, quite simply, if your community isn’t thriving, your problems are far deeper than you suppose. Let me explain. Across the Midwest, few metropolitan areas of more than a half million residents have lost population in this century. In contrast, a full 24 out of 56 Midwestern metropolitan areas with less than a half million residents have lost population. Since 2000, the big cities with more than half million residents grew by 9.8%, while smaller cities grew by an average of less than 2%.  The list of distressed places is a roll call of Indiana cities. Anderson, Evansville, Muncie, Michigan City, Hammond, Gary, LaPorte, Terre Haute and Kokomo are all losing population. The situation is even more dire in smaller cities and towns across the state.
  • INDIANAPOLIS – It was commonplace for Hoosier boosters and politicians in the 20th century to proclaim, “Farming is the backbone of the Indiana economy.” I loved to hear that statement. It opened the door for me to say sweetly, “Every corpse has a backbone.” For about 100 years, the beating heart of Indiana’s economy was manufacturing. Today, our state and national economies are more diversified and therefore depend less on manufacturing than in the past. The same is true for farming. In 1929, manufacturing accounted for 35% of all earnings by individuals in Indiana; farming was just 12% of total earning in the state. Nationwide, manufacturing was 26% of all earnings while farming was only 11%. That’s not the way our folklore would have it and folklore still has considerable sway in political circles. Manufacturing’s 35% of Indiana’s earnings was the 9th highest in the nation. By 2017, manufacturing had “fallen” to 21% of the state’s earnings, but that made Indiana first among the states. First! They give blue ribbons for first place; it’s the badge of honor for the victorious.
  • INDIANAPOLIS – I’ve been asked to explain tariffs. It can’t be done in 500 words, but here goes. Tariffs on imports are not like the property, sales or income taxes. Those taxes are meant to raise money for government spending or redistribution. American tariffs, today, are intended to shape the economic relationships between nations. America and France produce wine. A tariff by the United States on French wine will, in theory, increase the price of French wine for Americans, resulting in less French wine being bought. Americans then would buy more American wine, increasing the demand for American grapes and the land on which they grow, as well as the wages of those who work in vineyards and the wineries. The Gallo and Christian Bros. would prosper. In time, American wines could become as respectable and competitive as French wines, and the tariffs could be removed, their mission accomplished. Maybe. But it is also possible Americans will switch to other beverages if the price of French wine rises. The very idea of drinking American wine could drive those with sophisticated palates to British ginger beer.
  • INDIANAPOLIS  – Alex Azar, secretary of Health and Human Services (HHS), lived in Indiana for the last 10 years as an executive for Eli Lilly and Company. Therefore, I humbly appeal to our fellow Hoosier for relief from the tyranny of the nanny state. Tell me, where, in the name of our Hoosier vice president, does the federal government, via the Department of HHS, get off telling me I’m obese? I know this is a leftover from some previous administration, but it’s a year now and the oppression continues. Now that I am shorter than I used to be, and in possession of a mature male figure (think Grover Cleveland or William Howard Taft), my Body Mass Index (BMI) tops 30, the magic number for being classified as obese. That’s right. HHS tells us that Indiana ranks 10th in the nation with 32.5% of the population age 18 and over wearing the “Big O” for Obese pinned to their triple XL tee-shirts. Imagine, one of every three adult Hoosiers is righteously rotund, compared to 29.6% of all Americans.
     
  • INDIANAPOLIS – This weekly column is focused on Indiana’s economy, rarely commenting on national issues. But this time, we must make an exception. Early morning, Friday, June 1, President Trump tweeted, “Looking forward to seeing the employment numbers at 8:30 this morning.” This most unusual national leader was telling his tweetees that he knew the closely guarded monthly employment data and he liked them. Presidents do get advance looks at all types of key data. Prior to this, presidents kept their mouths shut about economic data until an hour after the official release time. It wasn’t just tradition, it was a policy set down for a wide group of government employees by the Office of Management and Budget to avoid insider trading. But now, this president was wiggling his toes in the stock market bathwater. His words were enough of a favorable hint to send ripples of glee through the regular bathers in those waters where the big boys surf and the little guys drown.
  • INDIANAPOLIS – We now know the major party candidates for Indiana’s nine congressional seats. Few of us, however, know the diversity/similarity of those districts and the cities and counties they include. To refresh your memory of the geography of Indiana’s congressional districts, go to Stats.Indiana.edu to find a map. The latest (2016) data for Indiana indicate our most populous district, the 5th (northern Marion County, all of Hamilton, Tipton, Madison and Grant counties plus slices of Blackford, Boone and Howard) had 768,400 persons. The least populated district was the 1st (Lake and Porter counties with a slice of LaPorte County including Michigan City) with 712,000. The 6th District (Muncie, Richmond, Columbus and down our eastern border to the Ohio River) had a median age of 40.1 years with 17% 65 or older. The youngest population was in the 7th District (central and southern Marion County) with a median age of 33.8 years and only 11% 65 or older.
  • INDIANAPOLIS – It’s been years since I last talked with Rhonda Boutte, one of the state’s leading economic development professionals. She hasn’t changed a bit as far as I could tell.  She wasted no time with pleasantries. “Everybody’s trying to be somebody else. There’s a whole lot of chubby brunettes pretending to be slinky blondes. Unless you’re willing to undergo a real transformation, those dark roots will show through and the stress will sour you on getting anything done,” she said. “I don’t understand,” I admitted. “Bezos be damned,” she said. “Here’s a guy telling cities what they need to be if they are going to get the Amazon prize. He’s looking for another Seattle. He’s the typical narcissistic tycoon expecting to work wonders on whatever he touches.”
  • INDIANAPOLIS – A few introductory thoughts. First, I am not in the pocket of any automobile company. Second, I am very conflicted about the subject of this column, urban transportation. Third, for years I have argued that the private automobile is the greatest mass transit system ever developed. Uber, Lyft, and self-driving vehicles are reinforcing that argument. Fourth, while autos have been blamed for urban sprawl, congested routes, and the deterioration of civility, family and community, they are not the sole villains of contemporary life. Air conditioning must take part of the blame. Finally, the interstate highways have been a powerful and fundamentally positive force in America, where they have been allowed to be integrated into our cities.
  • INDIANAPOLIS – It’s one thing to have a job and another to make a living. What does it take for a single parent to support a family with two children? How old are those children? Do they own or rent their home? Do they have a car or depend on public transportation? Do they have any savings in the event of an emergency? It’s certainly more than the federal minimum hourly wage of $7.25 which has prevailed since July 2009. Many state and local governments have decided that $15 per hour is more appropriate. (If we assume 40 hours per week and 52 weeks a year, then $7.25 per hour = $15,080 per year and $15 = $31,200.)  How much do Hoosiers make in “A State That Works,” a state that boasts of its friendliness to business? Back in 2007, in Indiana the average hourly wage was $19.93 or 99¢ less than the national average. If you prefer, we were worth 4.7% less than the average worker in the United States.
             
  • INDIANAPOLIS – A few introductory thoughts. First, I am not in the pocket of any automobile company. Second, I am very conflicted about the subject of this column, urban transportation. Third, for years I have argued that the private automobile is the greatest mass transit system ever developed. Uber, Lyft, and self-driving vehicles are reinforcing that argument. Fourth, while autos have been blamed for urban sprawl, congested routes, and the deterioration of civility, family and community, they are not the sole villains of contemporary life. Air conditioning must take part of the blame. Finally, the interstate highways have been a powerful and fundamentally positive force in America, where they have been allowed to be integrated into our cities.
  • INDIANAPOLIS – Several readers contend this column expresses negativism about Indiana. They tell me to find something good to say about the state. That’s easy: Indiana’s borders have been Sanforized; they show no signs of shrinking. A different group of complaining readers chide me for using too many numbers. Somehow these readers never learned numbers represent people and their activities, real people. TV news (and too many newspaper articles) feature storybook people whose lives are supposed to make it possible for us to understand complex problems. This approach assumes we can’t grasp the human context without individuals as stand-ins for vast numbers of diverse people. Governments do a fine job spinning the news using carefully selected facts. One would believe Indiana is carpeted with blue and yellow spring flowers, fortuitously the state colors. Lately, however, the state has been covered with potholes.
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  • Trump wanted to shut down U.S. border with Mexico
    “Close the whole thing!” - President Trump in a stormy Oval Office meeting about immigration. The Washington Post reported that aides talked Trump out of shutting down the U.S.-Mexican border, telling him it would curtail $600 billion in annual trade. Chief of Staff John Kelly and national security adviser John Bolton reportedly had a “profane” argument that prompted Kelly to storm out of the White House. Meanwhile, an immigrant caravan coursing through Mexico is becoming a late mid-term campaign issue. Trump said in rally in Mesa, Arizona Friday night, "Democrats produce mobs, Republicans produce jobs."
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  • It's Oct. 20 and it's weirdly green in Brown County
    In another year of Category 4 hurricanes ravaging the Atlantic and Gulf of Mexico coasts, wildfires devouring hundreds of thousands of acres in the American west, and a landmark United Nations report painting dire consequences of climate change coming as early as 2040, this has been a strange, strange autumn down here in Brown County.

    It’s Oct. 20, and it’s still green. There is very little color here in what should be the heart of what locals call “leaf looker” season. The golds, yellows and reds are mostly missing. And most of the leaves are still on the trees (though today’s high winds will change that a bit). Looks like peak color will come next weekend. No matter the color, c'mon down! 
    - Brian A. Howey, publisher.
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