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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. 

  • BLOOMINGTON — When he was just a young teenage schoolboy, George Washington sat down and copied out 110 “Rules of Civility & Decent Behavior.”  Many of these had to do with simple manners. “Cleanse not your teeth with the tablecloth, napkin, fork or knife,” reads Rule 100. Good advice at any time. But the first rule the future president wrote down and followed for the rest of his life was especially notable: “Every action done in company, ought to be with some sign of respect to those that are present.” There are times when I find myself wishing that all of us,  public officials and ordinary citizens alike, would adopt the civil behavior of that particular teenager.  Our politics today too often is strident and polarized. To put it mildly, we do not always show respect to those present, as Washington did, and try to make them comfortable. Often, it’s just the opposite. We live in a polity that seems to reward in-your-face rhetoric and confrontational behavior. Yet civility – respecting the rights and dignity of others – uplifts our common life.
  • SOUTH BEND  — Sputnik calling. Never, a year ago, could I have imagined Russia’s International News Agency Sputnik seeking comment about a contrived conspiracy theory aimed at Mayor Pete. Or that South Bend’s Pete Buttigieg would be the frontrunner in delegates for the Democratic presidential nomination after the Iowa caucuses and New Hampshire primary. Or that the city’s river lights would be ridiculed in a political attack by former Vice President Joe Biden. Or that I would be interviewed by journalists from six foreign countries. Would have been eight if communications with Australia worked and if I agreed to an interview with Sputnik, a spreader of Kremlin propaganda. Well, a lot that couldn’t have been imagined a year ago has happened as former Mayor Buttigieg, then such a long, long long shot for the Democratic nomination, has become a top contender, within a whisker of knocking off Bernie Sanders in the New Hampshire primary. If the Russians want to promote disinformation about Buttigieg, does that mean that Putin’s spreaders of fake news fear a former mayor of South Bend as a threat to win the presidency? Maybe not. But chances are that they aren’t interested now in promoting conspiracy theories about Andrew Yang.
  • 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.
  • MUNCIE  — A full eight weeks have passed since the unveiling of New Year’s resolutions. Like most of us, mine lies abandoned, which means I will not receive that free YMCA attendance shirt again this year. This brevity of resolve is an apt metaphor for the dilemma facing many Hoosier communities, and others across the Midwest. Over the course of a year, I am asked to deliver about 50 talks in various places around the state. Most of these presentations are about the common worries of slow-growing places. So, to groups of elected leaders, major employers, and civic-minded folks I explain the findings from decades of research on the topic. Readers of this column will find my prescriptions familiar. People hoping for a growing local economy must first make communities in which people would wish to live. I explain that this means focusing on the quality of local schools, remediating blight, ensuring there are parks and trails, and otherwise removing barriers to new residents. With the exception of school quality, I try not to be too specific about needs. Every community is different and has different priorities. Perhaps the best way to set these priorities is by asking residents in a formal, diligent and inclusive way. In finding remedies to problems, the most important voices are apt to be those who are least often consulted. This fundamental lesson is too often ignored from neighborhood association boards to city hall.
  • Pete Seat: Sen. Braun lines up on climate change
    INDIANAPOLIS  — For decades now, ever since Al Gore became synonymous with global warming, Republicans have mocked, ridiculed and sneered at prophesiers of “climate change.” Whether a heat wave or a cold spell, all were similarly dismissed as hocus pocus and Hogwartsian wizardry. But now, as polling suggests the Republican Party may be experiencing a reverse tractor beam pull with young voters turned off by the lack of climate seriousness, a new tune is being sung on Capitol Hill.

    High-profile congressmen such as Kevin McCarthy, Matt Gaetz and Dan Crenshaw, as well as Indiana’s very own Sen. Mike Braun, names typically heard in the context of their steadfast support for President Donald Trump, are all expressing an appetite for engaging in a discussion about the climate, and it is slowly taking Washington, and the Republican Party, by storm (no pun intended). In fact, Gaetz recently told the Washington Examiner that “climate denial is bad political strategy” and Braun last year co-founded the Senate Climate Solutions Caucus alongside Delaware Democrat Chris Coons.

    Polling suggests their sense of urgency to act is not misguided. According to recently published data from Americans for Carbon Dividends, four in 10 Hoosiers are more concerned about the climate than they were at this time a year ago (only 10% are less concerned) and a full six in 10 say action is necessary. To put a finer point on this: In only five of Indiana’s 92 counties did fewer than 50% of respondents agree that “global warming is happening,” and no less than 54% in any county believe “global warming will harm future generations.” This complementary data set came from a county-by-county survey conducted by the Yale Program on Climate Change Communication.

    Think about how incredible those numbers are coming from deeply conservative Indiana (especially considering one survey used the phrase “global warming”), and then it becomes clear why the leaders of 10 Indiana College Republican chapters, as well as the state federation chairman, are urging our state’s Republican congressional delegation to acknowledge the political reckoning taking place.

    What these young Republicans pinpoint is the reality that the party must at the very least sit at the table and engage in a good faith discussion about what many, including our global partners, believe to be a deadly problem. Whether you agree with the dire predictions of floods, hurricanes and melting glaciers or not, the political reality will not change any time soon and the discussion cannot be entirely dominated by Alexandria Ocasio-Cortez and others.

    And while there are multiple options on the table, including a plan to plant one trillion trees to help suck up carbon dioxide from the air, these young Republicans are gravitating toward a more comprehensive plan that leading economists say is economically sound, the aforementioned carbon dividends.

    This idea, championed by two Republican elder statesmen in former secretaries of state Jim Baker and George Shultz, would impose a $40-per-ton fee on fossil fuel companies emitting carbon into the atmosphere. But then it will do something novel. Rather than fill government coffers with cash, the assessed fees would be immediately returned to the American people on a quarterly basis, similar to a dividend-producing stock.

    The plan’s supporters argue this is a conservative approach to the issue. And again the numbers bear this out. Fifty-five percent of Hoosiers are in support of this particular solution, including 77% of Democrats, 54% of Independents and a whopping 66% of Republicans 45 years old and younger.

    But here’s the real Republican hook in the plan: A border adjustment that would assess the same fee on foreign imports. This pillar alone garners support from 64% of Hoosiers because it would, in the words of the Americans for Carbon Dividends poll, “push other countries to adopt similar policies by charging foreign imports in the same way.”

    How this conversation will play out is yet to be seen. But for the first time – perhaps ever – Republicans, driven by concrete polling and the voices of the next generation, are willing to throw some ideas on the table and have a debate. That’s progress. 

    Pete Seat is a former White House spokesman for President George W. Bush and campaign spokesman for Dan Coats, former U.S. senator and director of national intelligence. Currently he is a vice president with Bose Public Affairs Group in Indianapolis. He is also an Atlantic Council Millennium Fellow and author of the 2014 book, “The War on Millennials.” 
  • Jack Colwell: Trump would win if election was held next Tuesday
    SOUTH BEND  — After impeachment and Iowa, reelection of President Trump is more likely. If the election were held next Tuesday, he would win again in the Electoral College. Impeachment has helped Trump politically. He has climbed in approval ratings amid the proceedings. The latest Gallup poll finds Trump’s approval rating at 49%, highest since he took office in 2017.

    The debacle in Iowa Democratic caucus tabulating did more than rob former South Bend Mayor Pete Buttigieg of election night momentum that would have come if there had been vote totals then to reveal his spectacular showing. With no totals at all – not that night, not any until partial results dribbled out late in the afternoon on the following day – the famous first-in-the-nation test with voters brought jokes about Democrats not even able to add up vote totals.

    Laughter at the bungled process replaced serious analysis of the vote count. There was no count to analyze. The debacle enabled Trump to claim that the Democratic process was “rigged” and that Democrats shouldn’t be trusted with health care if they can’t even count caucus goers.

    It was a good week for the president. Rise in the polls. Acquittal in the Senate. A Democratic debacle in Iowa. Poking Democrats in the eye with a sharp stick repeatedly in the State of the Union address.

    House Speaker Nancy Pelosi wasn’t pleased with the speech. She kind of hinted at that by tearing up her copy when the president finished his remarks. But Trump didn’t care about her reaction. He showed his disdain by declining to shake hands with Pelosi when he arrived at the podium. He cared not at all what Democrats in the House chamber thought. His remarks were aimed at pleasing his base and the expanding Republican support he needs in key states to win again.

    Pelosi had been right to caution last spring against rushing to impeach, with the certainty that it would lead to Senate acquittal and a presidential boast of being exonerated after a partisan attack. But that blatant Ukraine call and other Trump conduct convinced House Democrats to impeach. Pelosi agreed, although she knew what would happen.

    It happened. Impeachment did of course lead to the always certain acquittal by Senate Republicans and the presidential boast of being exonerated after a partisan attack. Many Democrats expressed surprise that all of the Senate Republicans except one voted to acquit. Well, impeachment is political, not a judicial process, not when all the “jurors” have vast prior knowledge and have expressed opinions about the impeachment target.

    Democrats can be angry. They are. But they shouldn’t be surprised at the always certain result. Republican senators were sure to go along with what a vast majority of the Republican voters back home wanted, demanded.

    That Gallup poll found Trump’s approval rating among Republicans hit 94%, up six percentage points from early January and three points higher than his previous best. Trump’s approval rating among Democrats sank to 7%, a fall of three points. This shows an astounding nation-dividing 87% gap between Republican and Democratic approval.

    Solid Republican backing and an increase in approval among independents as well means Trump right now would win again, perhaps more easily than in 2016 in the Electoral College. That’s because huge Democratic pluralities against him would come from states like California and New York and other Democratic bastions along the coasts that Trump writes off, while he would have a solid chance again to win the key battleground states in the middle.

    The election isn’t coming up Tuesday. It’s Nov. 3. Much will happen before then. Democrats have a chance. Will they get their act together behind a solid contender? And will President Trump’s conduct convince that 94% of Republicans to stay with him or cause defections in key places? 

    Jack Colwell is a columnist for The Tribune. Write to him in care of The Tribune or by email at jcolwell@comcast.net.
  • Michael Hicks: Economy is neither as good or bad as politicians say
    MUNCIE  — It is election season, so we face several more months of claims about the U.S. economy. Predictably, the economy is neither as good as the incumbents profess it to be, nor bad as those running to unseat them assert. The real truth is somewhere in between. Of course, each side will be armed with data, but politicians selectively forget to adjust for inflation or ignore seasonal adjustments that correct distortions in monthly or quarterly data. The economy is a complex affair, and each of us view it through our own lens. This is my assessment as a professional economist who wants better policies from both parties. 

    We are in the longest expansion in U.S. history, and employment growth continues to do surprisingly well. Every healthy adult who wishes for a job can find one. While wage gains have been modest, over the past year we have seen stronger growth, particularly among the lowest-paid workers. Nationally, the composition of job growth has been good. Only 2.5% of workers are involuntarily working part time. Job growth has been in traditional full-time employment. Even with recent softening of labor markets, particularly in manufacturing, we live in an enviable time to be a worker. 

    There are many other good aspects to our current economy. Much of what we don’t measure well in our economy seems to be booming. Leisure is surely far less costly than in the past, and seemingly more productive. For most demographic groups, lifestyles are healthier and lifespans longer than even a decade ago. There is significant opportunity for human flourishing in what is unambiguously the wealthiest economy in history. 

    Household wealth is rising for families who’ve invested in homes, or saved, and thus invested money in an expanding economy. In this way, wealth is churned from Wall Street back to Main Street in a regular pattern. The ubiquity of retirement accounts and stock back pensions means that we are all capitalists now. 

    This good news does not mean the incumbent talking points are right, for two very important reasons. The first is that the Trump economy is no better than the Obama economy, and in the most meaningful ways modestly worse. The second is that the good economic news is not equally distributed across our Republic. 

    Comparing the last three years of the Obama Administration with the first three of the Trump Administration offers a good comparison. Annual GDP growth in the Trump years is at 2.52%, while it was 2.25% average for Mr. Obama. But, in terms of job growth, Mr. Obama’s last three years saw a full 1.5 million extra jobs created, a roughly 20% better performance. While job growth was solid in both administrations, overall economic growth has been unusually tepid. What makes our current affairs worse than the 2014-2016 period is that the U.S. is now engaged in unprecedented fiscal stimulus, through budget deficits, monetary policy, and farm bailouts. 

    Mr. Trump’s presidency has seen the deficit grow by $2,575,949,000,000 over three years, a full trillion dollars more than the last three years of Mr. Obama’s presidency. Both the bailouts and deficits are bigger than anything we observed in the Obama years. We live in a time of unprecedented fiscal and monetary stimulus, and yet eke out economic growth that is historically sluggish. 

    The bigger issue is that economic growth is unequally distributed across the nation. Large urban places enjoy fast growth, often twice the national rate of about 2.0%. In contrast, much of the country languishes. At the county level, the U.S. is in a surprising period of economic divergence. The unequal geographic distribution of economic growth makes it difficult to share a perspective about economic growth. Let me offer two examples. 

    In 1,000 urban counties, a young couple who saves up to purchase a home will see it build enormous wealth over a decade. In 2,000 counties outside of fast-growing cities, the same couple would see almost no real appreciation in their home values over a decade. Economic divergence doesn’t just impact the affluent young couple, but also those at the opposite end of the economy. Imagine a young, single parent living with parents. In a rural community, childcare is absent, and a car is required to get to a job for an employer awash in high school dropouts. In a large city, there is typically transportation, much thicker labor markets and more abundant childcare options. Neither situation is ideal, but one has many more opportunities than the other. 

    In short, while there are many reasons to be optimistic about the American economy and tout its performance, there are also many deep weaknesses. In times past, candidates wouldn’t agree on the economy, but most of their debate would be about policies to make it better. That is because there used to be a time when there were real disagreements about the future of economic policy. 

    Today, we have one political party that is in the midst of vigorous internal debate about the future of economic policy. The other party has eliminated internal debate and possesses no coherent economic policy. This means we risk several months of candidates arguing more about the past than the future. I view this as a form of intellectual and moral torture. My only solace is that this being a republic, we citizens are only getting what we deserve. 

    Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University.
  • Morton Marcus: Low cost of living starts with low wages
    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.”
           
    “Owen,” I said. “Think for a moment. Except in very unusual circumstances, the boss tells you what the job pays. It’s rarely negotiated. You don’t like the offer, you think it’s too little, you take it or leave it.”
           
    “Yeah,” he agreed. “Workers are price takers. Consumers are price takers. We don’t bargain with Walmart.”
           
    “Exactly,” I now agreed with him. “Renters and home buyers are price takers too, although there is often a ritual of negotiation in the latter case.
           
    “How do you decide how much you’re willing to pay in rent or for the home you’d like to buy?” I asked and then answered. “You think about how much you can afford out of what you make. Your wages are the limiting factor on your housing costs.”
           
    “Yeah, but ….” He tried to speak, but I went on. “Listen, the Bureau of Labor Statistics tells us that housing is about a third of consumer expenditures. And housing prices vary more from place to place than the prices for beer and pizza. It’s mainly housing that gives us the differences in cost of living figures.”
           
    “But,” he objected. “In Chicago, housing is more expensive than in New Castle.”
           
    “Right,” I said. “The median rental in the Chicago Metro area is 80% higher than in New Castle and the median mortgage cost is higher by 92%. Yet, the median income in Chicago is only 42% higher than in New Castle.”
           
    Owen shook his head. “Look,” I said. “If you don’t have the money, you can’t get the goodies, or you get less of the goodies. That means smaller apartments and houses in Chicago than in New Castle for the same expenditure.”        

    “And why are wages lower in Indiana than elsewhere?” Owen wanted to know.
           
    “Because what we trade with the rest of the nation and the world is worth less than what Chicago has to trade,” I said. “But that’s a story for another time.” 

    Mr. Marcus is an economist. Reach him at mortonjmarcus@yahoo.com. 
     
     
  • Brian Howey: Impeaching reality & other made for TV moments with President Trump

    By BRIAN A. HOWEY

    INDIANAPOLIS  — Some called it the State of the Union address. But Tuesday night was another episode of Donald Trump’s White House reality show, coming just hours before the U.S. Senate acquitted him in his impeachment trial.

    He was greeted by Republican Nixonian chants of “four more years” in a Chamber that voted to impeach him less than two months ago. He refused to shake Speaker Nancy Pelosi’s hand. Pelosi dropped the normal “distinct pleasure and high honor” part of her greeting. After the speech that claimed the historic great economy (which is growing at a modest 2.3%) and portrayed himself as a defender of pre-existing health conditions (his administration is doing the exact opposite in the courts), the speaker tore up his speech. She described it as a “manifesto of mistruths.”

    But this was a classic made-for-TV moment. “In just three short years, we have shattered the mentality of American decline and we have rejected the downsizing of America’s destiny. We have totally rejected the downsizing,” President Trump said in a speech during which he honored Rush Limbaugh with the Medal of Freedom and reunited a military family. “We are moving forward at a pace that was unimaginable just a short time ago, and we are never going back.”

    “He has had existential political threats facing him from the moment he was elected until tomorrow,” Texas-based Republican consultant Matt Mackowiak told Reuters, referring to the impending acquittal vote on impeachment charges.

    But last time Trump dodged such an existential threat (on July 24, 2019 after Special Counsel Robert Mueller testified before Congress), he sowed the seeds for his impeachment the very next day with his "perfect call" to Ukraine President Zelensky.

    The unintended consequences of impeachment came to light earlier Tuesday. Gallup put his job approval at an apex for this president, at 49% with 94% of Republicans on board and 42% of independents. Those approval numbers were still 30% below President Clinton’s impeachment polling windfall 21 years ago, but at a high for President Trump. The Democratic nomination process was going through its Iowa meltdown, with Democratic socialist Sen. Bernie Sanders essentially tied with Mayor Pete Buttigieg. “It’s a fiasco that just plays right into us,” the president told television network TV anchors during an off-the-record lunch earlier in the day.

    “We will never let socialism destroy American health care!” Trump said at one point in his address, a shot over Sen. Sanders’ (and Democratic voters’) bows.

    Trump’s efforts to smear former vice president Joe Biden via the Ukraine scandal were bearing fruit in Iowa, paid for by the cost of impeachment. Biden finished in an anemic fourth place and is just about out of funds in what he called a "gut punch." So if Biden falls away and Democrats end up nominating Sanders, it will have been worth the taint in the cunning mind of this president.

    From an Indiana perspective, the White House laid out its markers: Since President Trump’s election, 75,000 jobs have been created in Indiana, including 11,000 manufacturing jobs. Some 13,000 Hoosiers have been lifted out of poverty. The 156 opportunity zones in Indiana are attracting investment to previously forgotten communities, including in Allen, Lake, and Marion counties. Entrepreneurship is booming, as new business applications in Indiana are up 23% since the election. As more Hoosiers are working, unemployment insurance claims are down 18% since the election. At $55,000, real median household income in Indiana is up 3% under President Trump.

    While 40% in a recent New York Times poll revealed surging optimism, the Real Clear Politics right/wrong track polling composite, only 39.3% see the nation on the right track, while 55.5% perceive a wrong track.

    As for impeachment, Trump dodged Senate witnesses last week, setting up Thursday’s acquittal and he didn’t mention it Tuesday night. But in doing so, the key vote from Sen. Lamar Alexander was accompanied by his terming the July 25 phone call with Ukraine President Zelensky “inappropriate.” He added in a late night tweet: “The question then is not whether the president did it, but whether the United States Senate or the American people should decide what to do about what he did.”

    On Wednesday afternoon, U.S. Sen Mitt Romney made history when he became the first member of an impeached president’s party to vote to convict. “There’s no question that the president asked a foreign power to investigate his political foe,” Romney said. “That he did so for a political purpose, and that he pressured Ukraine to get them to do help or to lead in this effort. My own view is that there’s not much I can think of that would be a more egregious assault on our Constitution than trying to corrupt an election to maintain power. And that’s what the president did.”

    Acquittal is a far cry from "total exoneration." 

    U.S. Sen. Todd Young explained his vote for acquittal by saying, “After hearing all counsel arguments and reviewing all evidence in the record, including 17 witnesses, 192 witness video clips, and 28,578 pages of evidence, procedural rules, and Constitutional concerns, I will vote to acquit the president. I have worked to remain impartial and openminded throughout this trial, but it must be acknowledged that a political fever permeated this process from the beginning, dating back not just to the start of the House of Representatives’ impeachment efforts, but all the way back to November 2016.”

    Young echoed a 1999 complaint by then Republican U.S. Rep. Mark Souder (and current HPI contributor) after President Clinton’s acquittal, that the process had been “rushed.” Or as Young put it, “The House’s rushed impeachment process denied the president due process, and House managers failed to meet their heavy burden of proof to remove a president from office and from future ballots. This week, Americans begin the presidential election process. It’s time for the Senate to resume its legislative work on behalf of the American people, and to allow the voters to register their opinions about this administration in the coming election. The Founding Fathers, who warned of the political nature of impeachment, also provided us a means to address dissatisfaction with our presidents, frequent elections.”

    With the restraint of impeachment and internal “guard rails” gone, President Trump has been emboldened. His use of the once-bipartisan National Prayer Breakfast on Thursday where he excoriated his tormentors over his "perfect call," and his acquittal victory lap in the East Room are leading indicators of where his mind is on what Republican senators like Indiana's Mike Braun have called an "instructive" sequence in Trump's volatile presidency.

    Where that will lead us is anyone’s guess. 

    Howey is publisher of Howey Politics Indiana and the CrossroadsReport.com. Find him on Twitter at @hwypol.

     
  • Jack Colwell: Pete was robbed in Iowa
    SOUTH BEND — Pete was robbed. Not by criminals. Not by conspirators. Not by anyone wishing him harm. But former South Bend Mayor Pete Buttigieg was robbed of the momentum that should have come on election night from his impressive showing,  arguably a win, in the Iowa caucuses.

    Results dribbling in a night later showed that Buttigieg actually led in the first official totals for capturing delegates from Iowa and was battling Sen. Bernie Sanders for the lead in total votes of caucus goers after their two rounds of deliberations.

    If the same results had been available Monday night, Buttigieg would have been the big story on television coverage of the caucuses. And his spectacular showing in the first test with voters for the presidential candidates would have been in headlines in the papers the following morning.

    It would have been the big story. Instead the big story was about the debacle of the vote count in Iowa. No vote count was available Monday night. Or Tuesday morning. Nothing until late Tuesday afternoon. Even then, not complete returns.

    So, instead of gaining the bounce in polls and publicity a winner or even a candidate far exceeding expectations traditionally gets heading into the New Hampshire primary and beyond, there was no bounce Monday for Buttigieg. Instead of positive coverage of a winner, there was criticism of Iowa Democrats for not being able even to add up numbers to determine a winner. Lots of jokes, too.  And why not? There were no results on which to base serious analysis?

    Now, with it clear that Buttigieg did have the most impressive showing in Iowa, he is getting some of that positive coverage of which he was deprived on election night. It comes, however, after national attention shifted to the State of the Union address and the impeachment acquittal. He gets some bounce and clearly remains as a top-tier contender. Could it have been a bigger bounce if it began with full national attention on election night?

    Of course. Lack of election night clarity also did no favors for Sanders, who would have been able to claim a win in one or more of the tabulations on caucus votes and delegates captured. Sanders had been expected to win, however, so a win proclaimed that night wouldn’t have been as spectacular as the unpredicted rise to top of the top tier by Buttigieg.

    The tabulation debacle actually helped two candidates. If the totals had been available Monday night, the poor showing of former Vice President Joe Biden would have been a big story. While he was not expected to win in Iowa, where he got a late start, fourth place was not exactly a boost for his national status as the frontrunner. He has been able to brush off Iowa with focus on the questionable process.

    Sen. Amy Klobuchar, who staked all on an impressive showing in Iowa, might have been on the verge of withdrawal if election night totals showed her in fifth place. With no official word on where anybody finished, she was able to say she was pleased with Iowa and heading to New Hampshire. Sen. Elizabeth Warren, apparently third, goes on still viable, but in real danger that the end will be near if she trails far behind Sanders in New Hampshire.

    The end of the road does appear to have been reached for the Iowa caucuses as a traditional first-in-the-nation test with voters in a presidential year. That test needed to include some math skills, such as adding up the vote totals.   

    Jack Colwell is a columnist for The Tribune. Write to him in care of The Tribune or by email at jcolwell@comcast.net.

     
  • Shaw Friedman: Mayor Pete can go the distance
    LaPORTE – Having just returned Tuesday afternoon from an extraordinary trip to Iowa to campaign for Mayor Pete, I’m here to add an addendum to my April 11, 2019, column titled “Taking Seriously Buttigieg’s candidacy” to state in no uncertain terms – Mayor Pete can go the distance.

    I spent all of this past Saturday and Sunday canvassing for Mayor Pete in neighborhoods in Des Moines (with my new canvas ‘buddy’ South Bend native Claire Gasparetti, who flew in from her home in Charlotte, NC)  and participated as an “observer” for the Buttigieg campaign at a caucus in Johnston, Iowa, about 10 miles outside of Des Moines on Monday night. Mayor Pete’s win in the state in delegate count (which is the true barometer of a ‘win’ in that state) is proof positive that his message of unity and a renewed national purpose is resonating with average voters.

    It’s not just the organizational and training effort that Mayor Pete’s staff and volunteers put into Iowa that was rewarded with this win, it’s his personal story and his commitment to restoring decency, honor and a sense of ‘belonging’ to the White House that won the day for us there.

    My door-to-door canvassing with Claire on Saturday and Sunday turned up numerous voters who were ”undecided” at that point but also willing to give us a listen when it came to Pete’s story.  I’m also of the belief that Mayor Pete is probably the only candidate who can stitch together the diverse parts of our party to fashion a willing coalition. Exit polls showed him doing well not only with older voters but holding his own with younger voters, who have been Bernie’s base. Furthermore,  I came across several Republican voters who told me that the ONLY Democrat that they would consider voting for was Mayor Pete.  He’s got that rare ability to cross party boundaries with his persistent and authentic calls for national unity. 

    In addition to the canvassing, I participated with many others in a training at the Pete field offices on Saturday night to prepare to be caucus observers. We were given instructions to obey the “Prime Directive” which is “non intervention” in our assigned caucus and Pete’s “Rules of the Road,” also to be as helpful as possible for party officials putting on the caucus and to work with the precinct captains there; Iowans assigned by Pete’s campaign.

    After arriving at my assigned precinct in Johnston early as instructed, I offered to help set up chairs and tables. Once the gymnasium inside Beaver Creek Elementary School was ready, I moved to the doors of the school where I was able to leaflet for Mayor Pete in the hour leading up to the caucus. It gave me a great opportunity to tell his story to those waiting in line, many of whom were candid in saying they were still undecided up to that moment.  

    Once 7 p.m. rolled around, the doors to the school were locked and the 375 caucus goers inside the gym began separating into groups for the various candidates. As an observer I was tabbed to assist with the count for those in the first alignment and then worked alongside Pete’s hardworking precinct chairs for Johnston 4 – Ryan and Emily Osweiler – as we began wooing caucus goers from candidates who were not deemed “viable” in the first round. This was fascinating, retail politics at its best, and was conducted in tremendously civil fashion as neighbors sought to convince neighbors to jump over into committed groups. (At this particular caucus, observers and media weren’t penned into a specific area but were allowed to mix with the caucus-goers.)

    Because of the hard work by the Osweilers and so many Pete volunteers who had door-knocked, made phone calls and gained commitments, we had 107 pledges for Pete on the first ballot, compared to 64 for Warren, 74 for Klobuchar and 58 for Biden. Sanders at 46 was not deemed “viable.”  We immediately went to work trying to woo, coax and cajole caucus goers in non-committed groups like Tom Steyer to jump to Pete on the second ballot.  We were able to gain 16 from other groups on the second ballot with Warren picking up most of the Bernie supporters. Mayor Pete won Johnston Precinct 4’s balloting with 123 votes, Warren in seconnd with 93, Klobuchar in third with 80 and Biden rounding out the field with 62.  Because of the formula and rounding though, both Pete and Warren each picked up 3 delegates from that caucus to the district convention with Klobuchar and Biden each receiving 2 delegates.

    It’s clearly a shame that some vendor sold the Iowa state party on a smartphone app, for reporting numbers, when this kind of complex calculation turned out to be difficult to enter into the app whereas old-fashioned phoning, faxing or even scanning the worksheets would have prevented the mess  that delayed the reporting of results by nearly a day. 

    Anybody who says Democrats are divided need only have attended a caucus like the one I was fortunate to participate in to know that the camaraderie and shared desire by caucus goers to remove Donald Trump from office and end Trumpism once and for all overwhelms any other sentiment.  I count folks like Marty (who was there organizing for Elizabeth Warren) along with Kevin O’Malley (Biden’s observer at the precinct who once served as U.S. ambassador to Ireland) as new friends. I’m already making plans to connect again with Ryan and Emily Osweiler who did such a great job of mobilizing their friends and neighbors to help us win Johnston Precinct 4 for Mayor Pete.

    The opportunity to canvass in Des Moines neighborhoods and attend and assist at a caucus at Beaver Creek Elementary in Polk Township was an extraordinary experience for this battle-hardened political veteran who thought he’d seen it all.  

    The enthusiasm for Mayor Pete was palpable. As I wrote back in April, 2019, “there’s a boldness, an assertiveness, a fresh vision in Mayor Pete’s candidacy that addresses the anxieties and partisan anger of our era.”  Voters I spoke with in Johnston Precinct 4 understood that and rewarded Mayor Pete with a win.

    The crowd of Mayor Pete supporters that gathered Monday night for the rally at Drake University to celebrate victory knew it as well. We’re all involved in something very special and something that all Hoosiers can be proud of. v

    Shaw R. Friedman is former legal counsel for the Indiana Democratic Party and a longtime HPI contributor. 
  • Micheal Hicks: It should be back to education basics
    MUNCIE — Indiana’s economic future will be primarily determined by the share of Hoosier adults who graduated from college. If that share remains low, our economy will languish, our incomes will continue to fall further behind the national average and our best-educated citizens will relocate elsewhere. This truth cannot be too often repeated, but it begs other questions, mostly about schooling, and the needs of citizens who do not go to college. 

    For most of us, the bulk of our formal education comes in K-12 schools, rather than college or graduate school. Public schools remain the most common preparation for college and life afterwards. A good K-12 experience can prepare us to learn throughout our life, while giving us the basics of science, mathematics, literature and the arts. 

    For kids heading to college, rigorous high school programs are important. But, for kids not heading to college, the rigor and substance of K-12 is even more critical. This is the last time those students will receive formal education designed to make them a learned person. That fact is reason enough to question the way Indiana now focuses vocational education. Yet, the General Assembly has legislation before it to align curriculum from primary to college to meet workforce needs. 

    Now, to be clear, I don’t know what specific skills today’s middle school kids will need in two decades, but neither does anyone else. I am merely being honest about my inability to know the unknowable. For the record, acknowledging such limits to knowledge used to be a feature of conservatism. 

    Continuing labor market changes, including automation, artificial intelligence and much more widespread adoption of today’s technologies make it nearly impossible to predict job specific skills of the future. Asking business leaders these questions is folly. A full half of today’s businesses will be gone by 2030, and they are as ignorant as the rest of us about these changes. 

    To accentuate the point, imagine today’s labor markets and technologies from the vantage point of 2000. The first Blackberry phone was two years away, China was a modest importer, and Facebook’s Mark Zuckerberg was a high school sophomore. Now imagine how a committee in Indianapolis is going to design an effective, integrated curriculum to meet workforce needs two decades into the future. They are not. The state’s recent track record on such matters should generate significantly more humility. 

    The only skill that we are certain will be needed by today’s kids in 20 years is the ability to learn and master new skills. Our certain ignorance about the specific skills needed in 2040 is a compelling argument for more focus on basics in K-12 education; stronger basic math, science and literacy. The focus on vocational schooling is stunning hubris. 

    We will always need workers with skills that differ from those taught in a college classroom. Workers with different types of education bring to bear different skills into labor markets. But, it is a remarkable fact that both wages and productivity for high school graduates are highest in places with large shares of college graduates. Today, the worst employment options for non-college graduates are in cities with few college graduates. This suggests that labor markets reward non-college skills that complement those of college graduates. These skills are almost certainly not those we are presenting to unwitting middle and high school students as a gateway to non-college careers. 

    Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University.

     
  • Morton Marcus: GDP and Indiana counties
    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%.

    Let’s take a closer view:  We’ll look at Indiana’s 92 counties over two shorter periods of time, 2008 to 2013 and 2013 to 2018. We can proudly say 44 of our 92 counties had no decrease in Real GDP (that’s GDP adjusted for inflation) in either half of the decade 2008 to 2018.

    These fortunate counties had a sweet 16 of their own, including eight you might not expect to be among any elite: Grant, Tipton, Washington, Jackson, Howard, Shelby, Jay and Steuben.

    However, with 44 counties escaping a decline in Real GDP over the decade from 2008 to ’18, that left 48 counties without such good fortune. Eight counties declined in both the first and second five years of the decade.  These were Ohio, Posey, Miami, Newton, Switzerland, Clinton, Union, Jasper.

    Another eight counties had declines in the 2008-2013 period that overwhelmed the better times of the last five years. These were Cass, Blackford, Harrison, Fayette, LaPorte, Vigo, Marion and Henry. Hence, for the decade they had lower GDP in 2018 than they did in 2008. It’s easy to dismiss Marion County’s little 0.14% decline, until we realize it’s over $1.2 billion.

    In summary, all the happy talk emanating from the hype of the present tends to neglect the damages of the Great Recession. Many places and persons in our state and throughout the nation have open wounds from the devastation of Wall Street’s failure.

    In addition, that failure was compounded by congenial collusion with government agencies meant to regulate Wall Street in all its many disguises. Now, a dozen years after the fall, there are continuing attempts to remove or weaken the remedial efforts taken on the heels of the panic.

    GDP has no metric for incompetence and cowardice in the private and public sectors. 

    Mr. Marcus is an economist. Reach him at mortonjmarcus@yahoo.com. 
  • Morton Marcus: Enjoying the Indiana sales tax
    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.
           
    Stimulated by all these jolly numbers, I licked my chops and dove into the exciting tales of sales taxes. Did you know, I didn’t, Indiana is tied for second place behind only California’s 7.25% state sales tax? That’s correct, we’re at 7%, right in there with Mississippi, Rhode Island and Tennessee.
           
    But wait. That California 7.25% figure includes a 1% statewide tax collected by the state and distributed to local governments. Utah and Virginia also have these add-on state/local sales taxes. That makes Indiana’s 7% the highest exclusively state sales tax in the nation.
           
    Please note many states allow localities to add their own sales taxes. Illinois, that nexus of fiscal follies, has a maximum local sales tax of 4.75% and, therefore, a potential for a total sales tax of 11%. Tennessee has an average local add-on sales tax of 2.469%, which puts its average sales tax up to nearly 9.5%, currently the highest in the nation.

    Indiana does not have local add-on sales taxes, except where it deems Marion County as sufficiently mature to impose such taxes for sports facilities. And we do have accommodation and rental car taxes, but those are only to fleece visitors.

    However, state sales taxes offer more fun than just their rates. What is and what is not taxed? Indiana exempts sales of gold and silver bullion from the sales tax. We also tax most candy, but not candy that has flour in it.

    There’s a bill in the Indiana House to exempt feminine hygiene products from the sales tax. It’s a swell idea that has been rejected by legislators in the past. But, what about male hygiene? Are males so blessed by Mother Nature, that our hygiene should be neglected? It’s time for old men wearing diapers to rally at the Statehouse and demand a sales tax exemption for our Depends! 

    Mr. Marcus is an economist. Reach him at mortonjmarcus@yahoo.com.
  • The world’s largest concentration-camp network, and the most technologically advanced effort at cultural genocide, is run by the Chinese Communist Party.

    You may know them better as LeBron’s retirement-fund managers. 

  • (Note: Publisher Brian Howey asked us to publish this article written in December of 1973 by his father, veteran journalist Jack Howey, who passed away earlier this year at the age of 93.

    A helicopter dipped and hovered alongside the monorail tracks at Disney World at Orlando, Fla., when my wife and children, Brian and Sara, arrived there two weeks ago yesterday for a convention of the Associated Press Managing Editors Assn. (APME).

  • Michael Hicks: Family military legacies
    MUNCIE — I attended my first college reunion last weekend. It was a charming event, attended by well over half of the living graduates of my class at a small military college in Virginia. The weekend was even more special because my oldest son is undergoing the rigors of freshman year at the same school. The occasion allowed me to share a couple of meals with him and other young men and women in his class. That led me to think about these young people, this reunion and Veterans Day.

    Most of my 212 classmates spent several years in military service. Two of us advanced to general officer ranks and the four of us who roomed together my senior year all retired from the Army, Navy, or Air Force. What struck me about the weekend was how many of my classmates have sons or daughters following us into uniform. Among this group, the fact that both my college-aged children, a daughter and a son, are pursuing military careers was hardly exceptional. More than half the classmates with whom I spoke had kids in uniform. 

    It is no secret that military service in the U.S. has long been a family business. While this is true of many occupations, military service isn’t just any occupation. Recent research from the Pew Research Center illustrates the point. Between 77 and 86% of all new recruits are closely related to a veteran. That is two and a half times the rate among 18-to-29-year-olds who have not been in the military. The divide is even more pronounced among career soldiers. Today it is common for parents and children to serve in the same war zone together, and I know a number of families where every brother served in combat, as did mine.

    I am proud my family’s military service. It is easier to animate your children’s love of history when places like Valley Forge, Chickamauga, the Meuse Argonne, Normandy, Pusan, Ahn Khe, Panama, Rumalia Oilfields, Kabul and dozens more carry a family experience. But, it is hard to see how a professional military class of families is in the long-term best interests of our republic. The founders held similar worries. 

    James Madison in Federalist 46 seemed to think the existence of a regular military would be balanced by even larger state militias that could place a check on the power of a standing army. He wrote “Extravagant as the supposition is, let it however be made. Let a regular army, fully equal to the resources of the country, be formed; and let it be entirely at the devotion of the federal government.” Other concerns of our founders reflected the belief that the soldiers themselves represented a poor assembly of men, whose morality would be a problem for local citizens. Indeed, the proliferation of southern military colleges in the early 18th century was born of a local desire to see military college students replace the local army garrison. 

    Madison made clear in Federalist 41 that military forces should be an “object of laudable circumspection and precaution.” Today, this is true, but for other reasons. The U.S. military is so wholly a beast of the Constitution that it is difficult to envision it as a risk to the republic. George Washington squelched the last inkling of a mutiny in 1784 and at the outset of the Civil War, fewer than 250 American soldiers, out of more than 16,000, took arms against the nation.

    The risk today is not to our Constitution, but to our ability to wisely consider foreign policy. I am not alone in worrying that growing isolation of military experience will lessen our ability to appreciate the human risks of policy mistakes. It will simply note as contrast to recent experience that two of Teddy Roosevelt’s sons died in battle. 

    There are no easy remedies to a growing military-civil divide. The end of the draft occasioned some of this separation, but it also made service far more palatable for more Americans. Certainly, service members are thought better of today than they were in the summer of 1980, when I first put on a uniform. We will get too much applause for our service this Veterans Day, rather than too little. I wonder if maybe it is time to think beyond the praise towards the purpose of service, and talk more about the reasons military members give for serving. In that I suspect we will uncover a more universal attractiveness to military service. 

    I’ve asked my kids what they liked most about their brief time in uniform, and it comes down to three things. The intensity and meaning of the experience, the people with whom they served and the chance to lead. The armed forces is an imperfect institution, but it remains among the few places where anyone, from any walk of life, can craft a future made primarily of their own merit. And, for all its imperfections, it is among the few places that welcomes everyone. With the exception of the slow movement of women into combat arms, the military looks more like America than any worksite, university or church.

    Maybe on this Veterans Day, ask a veteran what they liked best about their time in service. If they say it’s the food, smile and ask them to tell the truth. I hope that answer won’t cause anyone to rush to the nearest recruiter, but it just might open some eyes about the true nature of military service. And it might explain why that service draws so many successive generations into uniform, and why it is worth so many others giving it a try. 

    Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University.
  • Morton Marcus: Gambling with lives
    INDIANAPOLIS — Watch out!” Sorethroat said. “They’re coming back and, if the past is prologue to the future, we’re in danger.”
             
    He and I were in the parking garage opposite the Statehouse. As usual, this long-time state employee was smoking. In addition, he was fuming. “The Indiana General Assembly,” he continued, “will gather for Organization Day on Nov. 19. Ha, it’s more like disembowelment day.”

    “Why do you say that?” I asked.

    “It’s when they remove whatever guts a senator or representative may have,” he answered. “You know, most of them are really good people who want to do what’s best for Hoosiers. But the leadership wants them to be gutless followers of the party line.

    “’Surplus over Service,’ that’s the mantra they have to chant,” he declared.

    “They raise taxes by allowing Hoosiers to engage in activities previously banned. Cell-phone gambling on college sports! Recreational marijuana use is only months away. All in the name of personal freedom to be irresponsible, thereby generating more tax revenues.”

    “Yes,” I agreed. “Bettors, with reduced inhibitions, losing their hard-won dollars for the transitory thrill of hope. Now, people too embarrassed to visit a casino will squander money in private to satisfy the greed of legalized thievery and political mischief-making.”

    Sorethroat gave me a quizzical look. “I didn’t think you’d be against gambling and marijuana use,” he said.

    “Like many things in life, one may support them in principle and oppose them in practice,” I replied. “Gambling matches the opinions of one group against those of another group, just like the stock market. It may be based on hunches, partisanship, or on seemingly reliable information. It’s OK as long as the cost of matching ‘buyers and sellers,’ persons or organizations of opposing opinions, is low (as in the stock market) and no one has special advantage.”

    “And that’s the danger,” Sorethroat said. “Government that stands to gain from gambling isn’t going to regulate it very much. And the more people gambling, the higher the costs of regulation, government has less incentive to check for honesty.”

    “As for marijuana,” I said, “I have no experience with it. But any product or process that loosens inhibitions offers increased opportunities for recklessness and potential danger to third parties.”

    “It’s like alcohol and tobacco,” my friend said. “The government that taxes them at high rates to discourage their use simultaneously takes advantage of their addictive powers. They don’t tax the use of sugar in the same way and that too can be addictive.”

    “And you’re still smoking, still coughing every few minutes, still sneaking time for a smoke break,” I said.

    “Sure,” he said. “I know better, but that’s how I support my government.”

    Mr. Marcus is an economist. Reach him at mortonjmarcus@yahoo.com. Follow his views and those of John Guy on “Who gets what?” wherever podcasts are available or at mortonjohn.libsyn.com
  • Morton Marcus: Is Indiana better off than it was 4 years ago?
    INDIANAPOLIS  — Just a few more weeks and we’ll be in 2020. Incumbent office holders will discover numbers showing we are better off than four years earlier. The out-of-office wannabes will have their data showing we are worse off. How can both be telling the truth? As economists love to say, “It all depends…”
             
    What data are you using, Indiana in a national or regional context? Real per capita personal income, a favorite measure of some political leaders, shows Indiana with an average annual increase of 1.82%, between the second quarters of 2015 and 2019, after adjustment for inflation.
             
    The United States grew by 2.12%. That “little” 0.30% average annual difference is worth $575 for each Indiana resident in 2019 dollars. That’s if we were just “average” instead of 29th in the nation.

    But let’s put this in a regional context and we’ll see if Indiana shines as bright as that moon over the Wabash. The Great Lakes region includes Ohio, Michigan, Illinois and Wisconsin, along with Indiana. The region as a whole saw real per capita personal income rise of 1.89%.

    Sad to say, only Ohio at 1.80% came in lower than our 1.87% growth rate. But, take heart! Kentucky managed only a 1.36% average rate. As you know, any time we beat out Kentucky, Hoosiers are winners.

    Then, we’ll consider the growth in the average wage per job. We know the state and local economic development folks have been working hard to raise the wages of Hoosier workers. Here we’ll have to put up with annual data from 2014 to 2018, but that’s the way it is with statistics, you have to work with what you have.

    The average wage per job in Indiana in 2018 was $55,600 (27th highest in the U.S.), but higher than Kentucky’s $50,682 (ranking 42nd). Unfortunately, the four other Great Lakes states all enjoyed higher average wages. There’s no point in mentioning the U.S. figure was $62,321.

    What about the growth rate for average wages from ’15 to ’18? Indiana was at 1.63%, short of the U.S. at 1.76%, but higher than Kentucky and Illinois, yet below Michigan, Ohio and Wisconsin.

    Our strength, then, must be adding to the number of jobs. Just about every business day, new and existing Indiana firms feed the media with announcements of job growth. But the data from September 2015 to the same month in 2019 shows Indiana with an average annual growth rate of 1.00% in jobs while the nation had a 1.62% rate.

    We failed. After looking at three key indicators of economic advancement, we didn’t find evidence that Indiana is a hot bed of growth. No doubt others will find the rainbow we missed, particularly if they are paid for their efforts. 

    Mr. Marcus is an economist. Reach him at mortonjmarcus@yahoo.com. Follow his views and those of John Guy on “Who gets what?” wherever podcasts are available or at mortonjohn.libsyn.com
  • Michael Hicks: Indiana's brain drain and a weak economy
    MUNCIE — The economic recovery beginning in the summer of 2009 is now over for Indiana. Factory employment is down for the year, and overall employment is on trend to be down in 2019. Overall employment has only declined in Indiana a dozen times since the end of World War II, marking precisely the dozen post-war recessions. The nation may not slip into recession, but by any meaningful measurement Indiana now has.

    Sadly, the recovery has been very poor, partly because our education policies have dampened the type of workforce vibrancy that is the hallmark of a healthy economy. Worse still, this sets us up for tough decades ahead.

    Since Third Quarter 2007, when the economy was booming, Indiana’s workforce down-skilled profoundly. We’ve seen 31% growth in workers with less than a high school diploma, nearly no change among those with high school diploma and under 5.0% growth among those who have been to college or have an associate’s degree. The simple fact is from Third Quarter 2007 to Third Quarter 2018, a whopping 55% of new workers had less than a high school diploma.

    I believe much of this is attributable to education policies that focus on supplying our economy with workers instead of citizens. While this might have pleased a few important political donors, it remains deeply misguided. I call it the Mississippi strategy, because it pushes Indiana into the bottom tier of educational attainment. And from the looks of it, it is doing just that.

    I have three broad critiques of this effort. It begins by simply noting that young men and women are not widgets who can or should be pushed into careers that benefit the local economy. This approach, adopted by the state’s educational policymakers, is deeply misguided, empirically unsupportable and acutely authoritarian.

    The goal of education isn’t to provide a workforce, but citizens. Of course citizens work, but they should not be pushed into fields deemed worthy by a committee convening in Indianapolis. The results are embarrassing. Take just one example. In an effort to cut college costs and have more students finish early, the General Assembly cut spending on higher education. As a share of GDP, spending dropped from 0.74 to 0.62%. That is more than $2,300 less per Hoosier college student each year.

    In response, the state’s three largest universities have slashed the number of in-state students they enroll as undergraduates. Purdue’s in-state enrollment since 2010 dropped from 62.9% to 52.2% (using 2018 data). IU’s share of in-state students dropped from 55.2 to 51.2% and Ball State from 88.4 to 85.6% (using 2019 data). All three universities cut in-state students by a combined total of 5,663 students. They then boosted out-of-state enrollment by 6,487 at a time when Indiana high schools graduated more and better-educated high school students.

    For those of you puzzled over the brain-drain problem in Indiana, look no further. Our top public universities turned away about 15% more qualified Hoosier students last year, enrolling out-of-state undergraduates in their place. Of course, out-of-state students pay higher tuition, but they are far less likely to remain in Indiana. It should surprise no one that states that experience net in-migration of college-aged people are the ones who more heavily subsidize education.

    Our current policies are empirically unsupportable for the simple reason that the state’s Department of Workforce Development cannot effectively predict what jobs will be needed in our state next year, much less over the expected work life of a teenager today. For example, the current policy is based on a prediction that more than a million jobs would be needed between 2014 and 2024, of which most required a high school diploma. That forecast would’ve required more than half of all Indiana workers with a high school diploma in 2014 to retire by 2024 and be replaced by almost half our high school graduates. Nonsense.

    Those who’ve designed our workforce policies might benefit from being reminded of Freidrich Hayek’s great 1988 book, “The Fatal Conceit,” where he noted “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

    And finally it is acutely authoritarian. As I’ve written before, there are sixth graders in Indiana now enrolled in career paths to be truck drivers. While truck driving is a good and noble profession, the notion that sixth graders should be focusing so narrowly enjoys precisely zero research support. It exists solely through the lobby efforts of one industry who is afraid of paying higher wages. This is immoral in so many ways that I could provide a dissertation-length critique of its absurdity. Instead I will simply ask if anyone supposes there is a single CEO of any of Indiana’s many great logistics firms whose 12-year-old child is pursuing the truck driver career path.

    Many readers will mistakenly suppose I am against career and technical education. Nothing could be farther from the truth. I personally embrace a culture that holds that all labor is imbued with inherent worth. But, our education policies are now doing almost precisely the opposite of what is now happening.

    We should be educating for citizenship, not employment. We should be educating to end the brain drain, rather than magnify it. We should be educating every child to pursue the fullest opportunity they can possible have today, and into the distant future. Right now, we are doing precisely the opposite of all of these.

    Our human capital policies have weakened Indiana and are failing us today with respect to brain drain and wage growth. The Mississippi strategy is a profound mistake, which will bear bitter fruit for years if not decades to come. 

    Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University.
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  • Myers, Holcomb react to disturbances in Fort Wayne, Indy Friday night
    "Last night, Hoosiers across the state practiced their 1st Amendment rights in protesting the tragic and brutal death of George Floyd. The numbers don’t lie; the Black community has been disproportionately affected by this brutality, both here in Indiana and across the United States. Law enforcement officers took an oath to serve and protect, and their violence against Black Americans is not only wrong, but criminal. The actions that perpetuated these events have exposed the racial inequities in our society, and require us to confront these injustices honestly and openly. While the initial protests were peaceful, the opportunistic looting that followed does little to further the righteous cause intended by the original protesters and activists. Our nation needs to progress into a more equitable tomorrow. I join the world in its outrage and anger at the recent murders of George Floyd, Breonna Taylor, Ahmaud Arbery and Dreasjon Reed. We cannot accept that injustice remains the status quo in 2020 – the fight to provide a better future lands upon all of our shoulders to find a path together to justice." - Dr. Woody Myers, the presumptive Democratic nominee for governor of Indiana, following protests that ended in arrests and vandalism in Indianapolis and Fort Wayne Friday night. Gov. Eric Holcomb said Saturday, “Hoosiers have long been people who find solutions to the challenges we face, whether it be in response to a pandemic or to an injustice like the world witnessed so tragically inflicted upon Mr. George Floyd in Minnesota. As I stated yesterday, injuring the innocent in response to an injustice is counterproductive. I’ve asked the Indiana State Police to fully support and make resources available to local communities across our state to ensure our citizens and their property remain safe. In the days ahead, peaceful assembly and clear voices will be important if we are to make progress. Violence and vandalism will set us back in our shared desire to resolve differences. Let us again, each of us, be part of the solution.”
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  • President Trump, Gov. Holcomb address the pandemic in their own words
    The COVID-19 pandemic is becoming the story of our time. As Sen. Todd Young explained, unlike the Great Recession of 2008-09 and the Oil Shock recession of 1979-82, what we are experiencing today is a double hammer: A pandemic and a severe economic panic. The Hoosier State is poised to go from a historic low 3.1% unemployment rate to double digits in the span of a month. At least one pandemic model says 2,400 Hoosiers will die.

    Tough times shift our attention to leadership. Here are quotes from President Trump and Gov. Eric Holcomb as the pandemic approached the U.S. and then impacted our nation and state.

    President Trump

    Jan. 22: “We have it totally under control. It’s one person coming in from China, and we have it under control. It’s going to be just fine.” – CNBC interview.

    Feb. 10: “Looks like by April, you know, in theory, when it gets a little warmer, it miraculously goes away.” – New Hampshire rally.

    Feb. 24: “The coronavirus is very much under control in the USA. … Stock market starting to look very good to me!” – On Twitter.

    Feb. 25: “China is working very, very hard. I have spoken to President Xi, and they are working very hard. If you know anything about him, I think he will be in pretty good shape. I think that is a problem that is going to go away.”

    Feb. 26: “We’re going to be pretty soon at only five people. And we could be at just one or two people over the next short period of time. So we’ve had very good luck.” – At a White House news conference.
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