MARCUS: Small gains do not deserve a celebration

Morton Marcus
April 3, 2010
Back to TopCommentsE-mailPrintBookmark and Share
Morton Marcus

Julius Jolley burst into the pancake house, his smile a banner across his face.

“Coffee, please. Eggs Benedict, easy on the sauce, no potatoes, no pancakes, fruit cup if it’s fresh,” he called to a waitress, not stopping until he reached the table where I sat with my newspaper.

“Wonderful day,” Julius exclaimed. “See the story, spoilsport?”

“Which story?” I asked, although I knew the answer.

“The state personal income data just released by the U.S. Bureau of Economic Analysis,” he said with a smile like a poppa wolf bringing a fresh carcass back to the den.

“I saw it,” I said flatly. “It was OK; Indiana’s annual average growth rate for personal income from 2007 to 2009 (0.64 percent) exceeded that of the U.S. (0.57 percent) and of our industrial neighbors (Ohio, Michigan, Illinois and Wisconsin).”

“Yes,” he beamed. “And … what else?”

“Our population growth rate (0.60 percent),” I said, then paused to gulp some coffee, “was higher than any of those other four states, although lower than the national rate (0.90 percent).”

“Isn’t that cause for a big smile?” he taunted.

“It is,” I said, “if small differences in pathetic numbers make you happy.”

“That’s cruel and unbecoming commentary from a gentleman,” he said and turned his attention to his order, which had just arrived.

“Public relations and puffery are not my business,” I said. “Both the Indiana and U.S. income growth rates are extremely small and each rounds off to a measly 0.6 percent. To be somewhat healthier than your sickly neighbors does not mean that you are well.”

“You’re refusing to get to the heart of the matter,” Julius scolded. “From 2007 to 2009—during the worst times since the 1930s—Indiana’s per-capita personal income, the general standard of economic well-being, rose, climbed, expanded, improved while the per capita personal income of the nation fell, declined, contracted and deteriorated. Do you deny it?”

“No,” I admitted. “But it’s nothing to be excited about. The Hoosier increase you cite was a pathetic 0.03 percent, and that’s without taking into account the low 1.7-percent average annual increase in consumer prices during those years. That means real income in Indiana fell. Yes, the U.S. was worse, but we were still in the lower half of all states. So what’s to celebrate?”

“We need to celebrate,” Julius insisted. “Hoosiers need to hear the good news. That’s why you hear so much about positive plans, intentions and aspirations. These give us hope, which is the currency of bad times.”

“What does hope buy?” I asked. “Are banks crediting mortgage payments when a homeowner brings in a bushel of hope?

“Indiana has hard realities to face. We are hobbling local governments with our irrational opposition to local property taxes. We do nothing about wasteful township governments. We refuse to consider a progressive income tax.

“All the while, our economic base is shrinking. Indiana’s share of U.S. earnings from durable goods manufacturing is smaller today than it was in 1990. In the past two years, earnings in this sector fell an average of 10.6 percent here, compared to a national drop of 7.2 percent. This is our primary economic issue, not protecting horse racing and casino profits.”

“Aren’t you asking a lot?” Julius demanded. “What do you expect to do about durable goods manufacturing or whatever you said?”

“The Legislature could increase funding for the technical assistance program at Purdue. They could employ faculty or staff from our various universities to help solve management problems, like lazy thinking and lack of imagination.”

“You’re not an economist anymore,” he told me. “You’ve become a comedian.”

I didn’t find anything funny to laugh about.•


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.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............