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Thursday, March 23, 2017
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  • INDIANAPOLIS - Historic preservation never interested me. Public television’s Antique Roadshow is a farce about the monetization of memory. Junk shops, occupying valuable downtown space throughout Indiana, only trumpet our economic and social decay. Nostalgia, to me, is a disease of the mind. I delight in seeing the past transformed into a promising future. Reuse of a beautiful building, restoration of landmarks pointing to tomorrow is inspiring. Today, communities are falling all over themselves to attract imaginary young adults. It’s like seeking a new factory instead of working to retain and develop existing businesses. Indiana’s many small towns and older urban neighborhoods deteriorate when businesses and families leave. Disinvestment, the neglect of maintenance and rotting of physical assets, creates open wounds and ugly scabs. Instead of wondering how to attract unknown businesses or workers, we might try improving the assets we have.
  • INDIANAPOLIS  – When I first came to Indiana, nearly a half century ago, I found a study in the IU library declaring South Bend as the best place to live in the Midwest. It wasn’t surprising, since the author was a professor at a campus in South Bend. That’s what it is about rankings. Pick your criteria carefully and you can make Hell the most desirable location for permanent residency. Last week, several Hoosier newspapers carried a story from U.S. News & World Report ranking Indiana’s government first among the 50 states. Actually, it wasn’t government, it was state government finance, but that could not stop some headline writers. The governor was pleased by this national recognition and promised to keep up the good work. We could not expect him to say otherwise.
  • INDIANAPOLIS – How alike the nation is Indiana? One way to judge would be to visit representative Hoosier homes and compare what we find there with what we see in typical American homes. Without the resources to visit all those homes, let’s use some 2015 data from the U.S. Bureau of Economic Analysis. The first thing we see is the average Hoosier’s personal income is $6,172 (13 percent) lower than that of the average American. This means we have less to spend than those elsewhere in the nation. And so we do. The average Hoosier spent $4,098 less in 2015 on consumer goods and services than did the average American. Right there we see why a town of 50,000 persons somewhere else in the nation will attract more retailers with higher quality (priced) goods than a town of equal size in Indiana. There will be more diversity of services elsewhere than in Indiana for the same reason. For Indiana to be more attractive to retailers and to service providers we need more people with more income to spend.
  • INDIANAPOLIS – In the past week, the Committee on Elections and Apportionment failed to move HB1014 along to the full House. That anti-gerrymandering bill calls for establishing a commission to oversee redistricting. Unless bold action has been taken since this writing, the bill is dead for this session. There is no other bill of greater importance before the Indiana General Assembly. A redistricting commission would help correct the corrupt practice of providing safe seats for Indiana’s congressional representatives and those holding positions in the State Senate and House. However, our self-serving, one-party legislature has no interest in promoting democracy. Even those in the minority party have little concern for fair primaries and elections. Indiana will continue to have a legislature that is not representative of the people and not focused on the future of our economy. Instead, the General Assembly will persist as an instrument of the powerful and the privileged.
  • INDIANAPOLIS – In a world offering little comfort to small towns, joy came this past week to Crothersville, IN. Located just off I-65, south of Seymour, north of Austin, Crothersville now is the proud home of the Tigers, 2017 winners of a girls’ basketball Class A sectional championship. For 103 years, this Jackson County town of 1,600 waited for a sectional championship trophy. Now, only 41 years since the first girls’ team began playing Indiana’s game, that trophy is displayed at the high school on N. Preston Street. From that site of joy, it is only 176 miles north on I-65 to South College Avenue in Rensselaer, Jasper County, where a very different mood prevails. St. Joseph’s College will suspend operations after graduation ceremonies this semester. Continuing students are being offered opportunities at several other Indiana higher education venues. The college is closing. Its buildings will be on caretaker status pending resolution by the board of trustees of the future direction for the institution. Next fall Rensselaer will not welcome approximately 1,000 students and the 200 faculty and staff who serve them.
  • INDIANAPOLIS – I wasn’t there, but I hear, and that’s good enough to pass as truth these days, the Indiana Place Name Change Commission (IPNCC) met last week and submitted its recommendations to the General Assembly. The IPNCC wants the Sage Solons either to change the names or eliminate the places now called LaPorte, Pulaski, Versailles, Rome City, Mexico, Chili, Montezuma, Peru, Brazil, Lafayette and too many others to mention here. At the same time, a jolly group wants to bring the joys of gaming to High Ground (currently known as Terre Haute). The State Commission on Emotional Health (SCEH) reports gaming already has people grinning with limitless glee in Hammond, East Chicago, Gary, Michigan City, Evansville, Elizabeth and Lawrenceburg. Less ecstasy is to be found in Anderson and Shelbyville, where gaming at racinos is temporarily more restricted than in the aforementioned places. Not morose, but quaking with anticipation are folks where name changes will rid them of the stigma of alien association (French Lick and Florence).

       
  • INDIANAPOLIS – Indiana mayors have little power to go with their great responsibilities. They are largely invisible outside their own communities. They are not weak people, but collectively have little statewide clout. A year ago, I set out to interview former Indiana mayors about their experiences. Former mayors who held office in the past 30 years, with “no skin in the game,” I expected to be blunt and objective, knowing they were speaking off the record. Each interview with 18 former mayors was a learning experience for me. First, I learned I was a bad interviewer. I did not draw out my subjects, did not direct them to the issues I wanted to cover, but let them flow on issues they chose. Second, I discovered what conscientious, generous people we elect as mayors. These are our neighbors who want to accomplish good things for their constituents, for their communities. Third, mayors know the barriers they face. But those impediments, mainly creations of the General Assembly, are taken as given and worked with or worked around.

  • INDIANAPOLIS - The Indiana General Assembly has a wonderfully easy-to-use site for the citizen who wants to know about bills introduced by subject or author. I don’t know who is responsible for this site, but hats off to him, her, and them. Today I found 43 bills on the subject of drugs. There may be many others if I searched more diligently. Imagine that: Indiana, A State in Denial, is concerned about drugs, a well-known scourge, and the primary cause of many safety, economic, education, and health problems. State Sen. Jim Merritt has authored 14 of the 43 bills. Naturally, I find the most compelling to be SB 244 which mandates a fiscal impact study of drugs and drug addiction. Normally, a fiscal impact study concerns the revenues and expenditures of government. But SB 244 goes further. It calls for an economic impact study which includes work force concerns and private expenditures on prevention and remediation. 

  • INDIANAPOLIS – This is a note of hope to the General Assembly’s Funding Indiana’s Roads for a Stronger, Safer Tomorrow Task Force, known by its friends and family as the FIRSST task force. The hope is FIRSST will continue the work done on House Bill 1002 modernizing Indiana’s road financing policies. That bill has begun its travels and travails through the sausage machine of state government. The guiding factors in a road finance bill, where new construction is not the center piece, should be road use and safety, plus changes in the costs of maintenance and reconstruction. HB 1002 allows a 10-cent increase in the 18-cent tax per gallon of gasoline. This is double the increase in consumer prices since the last change in 2003. Was 10 cents an estimate of what a gullible public would accept? Or is it because the bill creates an index for future increases based on the changes (does that include decreases?) in consumer prices and personal income?
  • INDIANAPOLIS – One week ago, I promised recommendations for improving the state’s economy. In the past I’ve done that extensively, but somehow readers don’t remember. Here are some more thoughts to be forgotten. It’s time for business leaders to stop seeking subsidies from the same public sector they deny adequate funding to do its job.  Businesses complain of a shortage of qualified labor. Is it government’s responsibility to train the labor force? Are our elementary and secondary schools to be merely preliminary settings for vocational training? What does business do directly to improve the labor force? If they find too many workers disabled by illiteracy, drugs and alcohol, a common complaint in this state, do they sponsor work-prep programs, including alcohol and drug treatment efforts? Do they increase wages to attract more qualified workers? Do they separately or collectively offer intensive training programs for workers?
  • INDIANAPOLIS – After the 2016 election, some people saw sunshine ahead with a return to greatness. Others expected moonless nights with a great nation degraded. Indiana has few anticipations. We really don’t know Governor-elect Eric Holcomb. Is he the second coming of Mike Pence, as his supporters believed? Or is he Pence 2.0 as the billboards of his opponents declared? This much we do know, the state’s public relations folks aren’t as enthusiastic about the latest state economic news as they were just six months ago. Last week the U.S. Bureau of Economic Analysis reported Indiana’s real Gross Domestic Product (affectionately known as GDP, the inflation-adjusted value of goods and services produced in the U.S.) grew in the Spring or second quarter of this year by a 1.25-percent annual rate. This was a smidge over the 1.16 percent at which the whole country grew. We enjoyed a very slim lead over Montana for the honorable 25th place in growth among the states. Contrast this with the ballyhooing last June when Indiana’s GDP growth was reported as first among the nation’s 50 states during the last quarter of 2015.
  • INDIANAPOLIS – He didn’t ask, but I have some advice for our in-coming governor, Eric Holcomb. I’ve had advice for all our governors since 1970, but none has been taken. Nonetheless, we press on. What do so many Hoosier like? Our convenient smaller towns. What do folks beyond our borders think of, if they think of Indiana? The 500, corn, Larry Bird, and small town life. What are we trying to attract? Imaginary people: Millennials who have a perverse passion for trolley cars and the skills to earn $90,000 a year, the first year out of college. These people, we think, want to live downtown, in quaint, restored old buildings, riding bicycles to work, buying groceries from small neighborhood shopkeepers, but having elevators so they don’t have to lug baby and carriage upstairs, in the unlikely event they ever have a baby. Yet, what do we have in abundance? Our convenient smaller towns losing, or struggling to gain, population. Do we promote those places? No. We have no specific program to encourage businesses and their workers to locate in Logansport, Peru, or Wabash.

  • INDIANAPOLIS  – Suddenly, on Nov. 9, the majority in the United States woke up to find it has been silent too long. In fact, it realized, it might not be a majority at all. The combined Republican and Libertarian vote was 50.59%. From what I know, many of the Libertarian votes were from Republicans who were embarrassed to be known as Republicans this year. The 48.76% who voted Democratic or Green believed strongly in their causes and could not understand how others could believe otherwise. But they were not the majority. Now, instead of taking to the streets, this silent minority needs to be heard. Now, if it wishes to be successful in the political arena, it must recognize the urgency of political action. This means ending the corruption of gerrymandering by political parties and restructuring the Electoral College. Gerrymandering is the practice of state legislators drawing district lines to protect their seats and their party in the General Assembly. Here in Indiana, through a study committee report, we have made a good start toward taking extreme partisanship out of the process. But that effort must continue and be intensified next year.
  • INDIANAPOLIS – It was disappointing, but not surprising, to learn from the Indianapolis Business Journal (Oct. 10-16) that both John Gregg and Eric Holcomb endorse public-private partnerships (P3s). These candidates for governor are experienced in the ways of our Indiana government. Mr. Gregg has served at the highest level of the legislature while Mr. Holcomb is our lieutenant governor. P3s are agreements between governments (national, state, or local) with private companies to assume control, but not ownership, of public assets. Hoosiers know them in the form of the new bridge over the Ohio River, connecting the east end of Louisville with Clark County. I-69 moving north from Evansville and Bloomington toward Indianapolis is a P3. The Indiana Toll Road, extending from Ohio to the Illinois state line, is a successful P3. The Chicago Skyway, used by thousands of Hoosiers traveling to the home of the Cubs, is a P3.

  • INDIANAPOLIS – The campaigns for governor and 125 seats in the General Assembly are winding down. We’ll be relieved soon from the slurs and insults of competing camps. Commercials will return to products supposed to make us regular again. The big question of these elections is, “Will anything be done by state government to make Indiana more attractive as a place to live and a place to run a business?” Every candidate told us s/he has a plan. That’s wonderful. But plans don’t do well in our legislature because most Hoosiers believe we don’t have any real problems and they elect people who agree with them. Our state government tells us how fine life is here and most of our news media print and broadcast all the good news they can find in self-serving press releases. However, Indiana is trending down relative to other states. We currently rank as the 16th most populous state, with 6.6 million residents. We gained 136,000 since the Census of 2010 (22nd among the 50 states), which translates to a 2.1 percent increase (32nd) compared to the national growth rate of 4.1 percent.
  • INDIANAPOLIS – A few days ago, the U.S. Bureau of Economic Analysis released the 2015 Gross Domestic Product (GDP) figures for all 382 metropolitan areas of the nation. Of these, 10 are exclusively within Indiana and five others (Chicago, South Bend, Cincinnati, Louisville and Evansville) include one or more Indiana counties. How are these 15 metro areas doing since the Great Recession ended in 2010? In a word: Poorly. What kind of recovery have they had compared to the rest of America? Weak. Hoosier politicians of both parties love to celebrate urban areas as the engines of economic growth while declaring that our rural communities protect something called “Hoosier values.” Collectively, our 15 metro areas grew at a slower rate than American metros as a group every year for the past five years. Does being “business-friendly” mean Indiana retards business growth? The average annual rate of growth in real GDP for Indiana metros from 2011 through 2015 was 1.56 percent compared with a national metro growth rate of 1.90 percent. 
  • INDIANAPOLIS – A reader from Bloomfield wants economists to explain why free trade does not deliver benefits as advertised by politicians. Free trade is a concept, not a reality. It is much like other concepts so dear to some economists and most politicians, such as pure competition, open markets, free enterprise, level playing fields, the gold standard, and the ever-popular balanced budget.  But we do not live in the world of concepts. Our world has millions of people demanding protection from change. When they get that protection, it is usually at the expense of other people who are worse off. Many Hoosiers use the loss of Indiana’s jobs at Carrier to Mexico as an example of the injustice of trade deals and free enterprise. But do we hear Hoosiers complain when the Indiana Economic Development Corporation announces a company moving jobs from another state to Indiana? Or from one Indiana county to another?
  • INDIANAPOLIS – After the housing bubble collapse of 2007-8, I thought of forming Economists Anonymous, a self-help group of forecasting addicts. I couldn’t get anyone to join me. Forecasts and projections are in demand. Someone will do them and they are best if done by people who are informed, trained, and cautious. Caution is important because statements about the future are taken seriously; lives and fortunes may depend on them. Forecasts and projections are compared to what we believe we know about the present. Annual population estimates by the U.S. Bureau of the Census are as close as we can get to how many people live where. These estimates, however, are not perfect. Thus, measuring projections against the estimates involves using two imperfect sets of numbers. Matt Kinghorn at the IU Indiana Business Research Center (IBRC) does population projections. He meets all the criteria for a good forecaster and he doesn’t give up.
  • INDIANAPOLIS –  Somebody is sure to ask, “Are you better off now than you were in 2007?” That was probably the one year most folks think of as “pre-Great Recession,” when the Good Times last rolled. Your answer is going to depend on where you live now, what you are doing now, compared to where you were and what you were doing back then. We’ll use 2007 and 2015 annual averages at the county level from the Indiana Department of Workforce Development to get some idea about how the Hoosier economy is now compared to then. Let’s start with the unemployment rates. Back in 2007, the highest unemployment rate fell on Fayette County at 7.2%. In 2015, Vermillion had that “honor” at 7.1%. In both periods, Hamilton County could boast the lowest unemployment rate of Indiana’s 92 counties, although the rate did rise there from 2.9 to 3.4%. Hamilton was just one of 40 Hoosier counties with a higher unemployment rate in 2015 than eight years earlier. By contrast, 32 counties saw their unemployment rates fall over that period, while 20 counties had negligible changes from -1 to +1%.
  • INDIANAPOLIS – Basketball may be king in Indiana, but the king is losing his castles. They demolished the Wigwam in Anderson last week. Soon the 1928 Fieldhouse in Muncie could meet the wrecker’s ball. Sentimentality may extend the life of this structure, but cannot erase certain facts: Anderson and Muncie are part of a 12-county neglected region. This Distressed Dozen, stretching from Logansport through Peru and Wabash, to Richmond and Connersville, encompass massive tumors of economic and social decay, despite the remedial efforts of local leaders. When the state recently awarded millions of dollars to three regions, this area was totally neglected. Ten of the 21 Indiana counties that lost population in the past 20 years are part of the Distressed Dozen. In total they have seen their population drop by 4% (26,700) while the balance of the state enjoyed a 16% increase (830,000). At the heart of this population decline was the loss of 47,100 jobs in the region.
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  • Sen. Lanane warns of HIP 2.0 trigger and the Obamacare repeal
    “HIP 2.0 is a critical piece of public health policy for the state, and it is being put at risk under the Republican healthcare plan due to a ‘trigger’ in our state law. We are here today to urge our Republican colleagues in the Statehouse to remove this trigger, and work to safeguard Hoosiers’ health care coverage should the AHCA become law. HIP 2.0 health coverage is put at risk due to Indiana law automatically triggering a repeal of HIP 2.0 should federal funding be reduced. Without the enhanced federal matching funds for HIP 2.0, Indiana would have to allocate an extra $500 million per year in state funding to maintain the current program.” - Senate Minority Leader Tim Lanane, on the Obamacare repeal and a potential reduction of Medicaid funding that is part of the Healthy Indiana Plan 2.0. Some 430,000 Hoosiers get health coverage through HIP 2.0.
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  • Trump and truth
    The Obamacare repeal is teetering in the House. Why? Remember the old story of the boy who cried wolf? President Trump’s penchant for lies is beginning to take such a toll that NBC reporter Kasie Hunt said this morning that some members wonder if he’ll even be around in a year. So when Trump threatened retribution against recalcitrant House members on Tuesday, its impact was dubious. The Wall Street Journal editorialized today: “If President Trump announces that North Korea launched a missile that landed within 100 miles of Hawaii, would most Americans believe him? Would the rest of the world? We’re not sure, which speaks to the damage that Mr. Trump is doing to his Presidency with his seemingly endless stream of exaggerations, evidence-free accusations, implausible denials and other falsehoods. The latest example is Mr. Trump’s refusal to back off his Saturday morning tweet of three weeks ago.” The other emerging dynamic is that the Pence/Marc Short legislative team hasn’t done the legwork on the RyanCare bill. It could all come down to Vice President Pence, HHS Secretary Tom Price and OMB Director Mick Mulvaney to round up about eight votes and keep Republicans like Rep. Hollingsworth in the fold. - Brian A. Howey, publisher
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