MARCUS: Governor's ship of a state losing sailors?

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Morton Marcus

On Jan. 19, Gov. Mitch Daniels delivered his State of the State address. I hope you heard or read it. If not, you can go to the governor’s Web site and read it. It has a nautical theme and will lift your spirits.

That’s what a State of the State address is supposed to do. Make us feel better about who we are, where we are and where we are going. Just a few days later, President Obama did the same for the nation. Now all of us can get on with shopping for Valentine’s Day.

The State of the State message puts the legislative branch particularly into convulsive congeniality. Every governor is the official captain of the state cheerleaders. His message inspires the clever, artful gymnastic exercises by our General Assembly. The members climb on one another’s shoulders, flip in the air, and always land gracefully on their feet. 

Sadly, these efforts rarely have any positive effect on the team, the more than 6 million Hoosiers slogging through the mud on the fields of reality. But the legislative chambers are not the place for reality.

Daniels offered a strong platform for progress in difficult times. He encouraged continued reduction in governmental excesses at the local level. But someone fed him the wrong facts on what has been done. For example, the governor said the Legislature “reduced the number of cooks in the assessment kitchen by about 1,000.”

Yes, there are far fewer township assessors, but how many fewer people work on assessments today in Indiana? In many counties, former township assessors are now on the county payroll instead of the township rolls.  

It was good to hear the state could save $40 million to $50 million by changing the way it pays investment fees for its retirement funds. One does wonder, however, why that step was not taken earlier in this cost-conscious, detail-oriented administration.

He supported the fatuous constitutional caps on property taxes while giving nominal encouragement for less politics in the redistricting process that is approaching.

I was cheered by the governor’s declaration that only “one in 11 workers is unemployed.” However, it troubled me when I realized the governor should have said “one in 10 workers is unemployed.”

“Oh,” you say, “nitpicking, fault-seeking, fatuous figure freak, that’s of no consequence.”

I agree. What difference does it make if the governor neglects nearly 25,000 unemployed Hoosiers? Probably they weren’t listening to his speech; certainly, the media representatives and most members of the Legislature wouldn’t care. 

What troubles me is that Daniels was not fed the right information about unemployment in Indiana. Our unemployment rate may be below the national average and below those of surrounding states, but those facts do not tell the real story.

From the end of 2007 to December 2009, Indiana lost 274,000 employed workers, a decline of 8.9 percent, and the third-worst percentage decline in the nation, behind only Alabama and Michigan. Yet the number of people unemployed in Indiana rose only 161,000. Our labor force (the number employed plus the number unemployed) fell 113,000. To make this statistic clearer—of every 100 Hoosiers who lost jobs, 59 became unemployed and 41 left the labor force.

What is going on? If this is not a wild statistical anomaly, what does it mean for our economic development and education policies?

The demographics of our state are the foundation of our future. In this census year, this issue should have been a major concern of the governor’s State of the State address. Are these Hoosier workers retiring or abandoning market employment? Are they leaving Indiana? Are they unemployable except in the closed factories of inefficient companies?

The governor discussed new jobs for Hoosier workers. But, if two of every five job losers are not seeking work, what does it say about the state of our state?•


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. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.