MARCUS: Economy as diverse as pierogi in Whiting

Morton Marcus
July 31, 2010
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Morton Marcus

“The economy is terrible and it’s getting worse,” Simon Schlep insists as he buries a pierogi in ketchup.

“No!” I shout, too late. “No one puts ketchup on a pierogi; not here in Whiting, not anywhere that civilization thrives.”

Simon looks around and then asserts, “Who says? There aren’t any rules for this festival. I like ketchup. I eat ketchup.”

It’s too hot, too muggy for me to object. The crowds are immense for this narrow street jammed with food and curiosity stands. The polka music is delighting toe-tapping elderly people who have turned off their hearing aids.

“Let’s sit over here,” I say, pointing to one of the few open benches. After I devour my stuffed cabbage, but before I attack the sauerkraut and sausage, I ask, “What’s this about the economy?”

“It’s horrible. Too many people unemployed for too long. No jobs. Nothing happening,” Simon says.

“You’re right, but you’re wrong,” I say. “The economy is growing again; slowly, yes, but growing. Indiana’s unemployment rate is down from 10.8 percent a year ago to 10.1 percent; the number of people unemployed in the state is down 8.6 percent.

“The simple fact is that we are having a recession on top of the continuing restructuring of the economy that has been going on since the 1980s. In the past 10 years, we’ve added the equivalent of 10 million full-time jobs while losing 4 million in manufacturing.”

Simon keeps eating; I can’t look at what he has done, adding inappropriate condiments to his plate.

“The financial boom/bust has devastated one of Indiana’s signature industries,” I add.

“Hmm?” Simon says.

“Manufactured housing,” I reply, savoring a cheese pierogi. “Everyone points to the auto and RV industries, but manufactured housing has been particularly hard-hit over a long period. When the financial markets decided to support almost any kind of housing mortgage, they didn’t include manufactured housing. It was the conventional site-built home that got all the money. Manufactured housing units produced in the United States fell from 373,000 in 1998 to 147,000 in 2005. Then, once the conventional housing market failed, manufactured housing fell to fewer than 50,000 units last year.

“Indiana’s production in 2009,” I continue, “was down to 8 percent of what it was in ’98, when we accounted for 10 percent of all U.S. production. Recently, we’ve been only 6 percent of a severely shrunken U.S. output.”

“But it will all bounce back according to your rosy view of the economy,” Simon snarls.

“Maybe and maybe not,” I say with certainty. “There are so many homes on the market at very favorable prices that manufactured housing is not as competitive as previously. Plus, lenders are still reluctant to put money into the market for any loan that doesn’t appear to be a sure thing. Yet … ”

“Ah, here comes the famous other hand,” Simon says.

“Precisely,” I say. “Hard times may push more people toward manufactured housing, but it’s a difficult call. There’s been a major decrease in plants producing manufactured housing, but that does not mean only the least efficient have been eliminated from the market.”

“And it all means what?” Simon asks.

“Continued confusion,” I say. “Parts of the economy will pull out ahead, leaving others in the dust. Consumers are ready to spend; just look at this eager crowd. But a recovery does not put you back where you were. Just as not all firms or industries are restored to some former glory, not all pierogi are created equal. Let’s go find some more.”•


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.


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  1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.