Economic Stimulus and Recession and Legislature and State Budget and Township Government and Economy and Government & Economic Development and Government

Things aren't as bad as we think

March 23, 2009
The jokesters in the Indiana General Assembly once again have shown their incredible ability to play the fools. True, it only takes a committee to commit laughable acts beyond the dreams of circus clowns. The entire Legislature need not be involved.

This time, a selection of our representatives rejected efforts to rid the state of unnecessary township governments. The fact that it was Democrats behind this disgrace rather than Republicans is not of consequence. Give Republicans power and they would be equally irresponsible. It is power, not party, that is corrupting.

Of the many Kernan-Shepherd recommendations for changes in Indiana's local government, the most solid pertained to townships: Get rid of them. By and large, they are wasteful, antiquated remnants of an era long gone. Keeping them is a statement of Indiana's persistent refusal to enter the 20th century, to say nothing of the 21st century.

That was the mistake, now for the misunderstanding.

At the national level, as well as within Indiana, we continue to overstate the magnitude of our economic woes. When you have an injury, it is serious. That others before you have had more traumatic injuries seems to be of no account.

This would be a comic situation if it were not so destructive. The nation is up in arms about an unemployment rate that reached 8.1 percent in February. Without question, this is serious. When 12.5 million people are unemployed, we cannot dismiss the situation. That said, it is not appropriate to repeat over and over that this is the worst economic crisis since the Great Depression.

The U.S. unemployment rate reached 8.3 percent in November 1981 and stayed above that level for another 25 months. The national unemployment rate peaked at 10.8 percent in December 1982. Perhaps we will get to those distressful levels during this recession, but we are not there yet.

The latest unemployment rate for Indiana was 9.2 percent. From April 1980 to January 1984 (46 months), the Hoosier state had unemployment rates equal to or exceeding that level. In November 1982, we peaked at 12.8 percent, with 334,000 people unemployed, compared with 301,000 today. To be comparable with 1982, given our larger labor force, Indiana would have 416,000 unemployed today.

It is this lack of perspective that makes the current circumstances both tragic and laughable. While I do not agree with former Sen. Phil Graham that we are a nation of whiners, self-pity has become contagious. Tell anyone that you are doing well and you are branded as insensitive and unpatriotic.

Yes, most Americans have lost income and/or wealth in the past year. The value of housing has declined, but far more people own homes of higher quality today than at any time in our history. The value of retirement accounts has fallen, but Americans have pension potential worth more than was the case 25 years ago.

None of these comments are meant to dismiss the seriousness of the current recession Bold action is necessary. The prgrams now being implemented are exactly what we need. They provide immediate relief while investing in our future.

For example, the funds being made available for insulating homes provide employment today and will save energy for years to come. Infrastructure programs generate jobs today and will yield benefits for decades.

As we work on recovery, let's not lose sight of reality. These are tough times. Millions of people are suffering greatly. But these conditions have been faced before and we have both the tools and will to overcome our problems.

Fortunately, the future of our country does not lie in the palsied hands of the Indiana General Assembly.

___

Marcus taught economics for more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com. 
Source: XMLAr00900.xml
ADVERTISEMENT

Recent Articles by Morton Marcus

Comments powered by Disqus