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EYE ON THE PIE: Data can work for both candidates

June 16, 2008

Last night I had a stressful dream. Instead of being the well-integrated personality that I am, in my dream I am twins. One twin is an adviser on economic matters for Gov. Mitch Daniels and the other serves in the same capacity for challenger Jill Long

Each twin plows through economic data. He spins statistics that make the favored candidate's arguments look good. The twin for Mitch argues how well Indiana's economy is performing; the twin working for Jill makes sure our state's economy is seen in the worst possible light.

In the dream, the latest data for gross domestic product for Indiana (GDP-IN) are released and the twins rush to download them and start the spin. GDP-IN is the value of all goods and services produced in the state in a particular year; the latest data are for 2007. They measure the magnitude of economic activity in the state and tell us what our efforts are worth to the rest of the United States and the world.

Jill's twin finds "Indiana's GDP grew by only 0.3 percent in 2007. This very slow growth put us in sole possession of 44th place among the 50 states. The U.S. growth rate was 2 percent, nearly seven times faster than Indiana."

Mitch's twin counters that "the Great Lakes states (Indiana, Illinois, Michigan, Ohio and Wisconsin) came in dead last among the nation's eight regions. The regional growth rate was 0.5 percent, just a whisker ahead of Indiana's 0.3 percent. We shouldn't believe that we can separate ourselves from the problems we share with our neighbors."

This opening exchange sets the stage for the remainder of the dream. My two selves are now playing ping-pong. Jill's twin hits a forceful shot. "We acknowledge that Indiana's problems have been long term, but there is no evidence that things are getting better. From 1997 to 2002, Indiana's GDP grew at an average annual rate of 2.16 percent (31st in the nation). In the past five years, 2002 to 2007, Indiana's annual growth rate was cut in half, slipping to 1.08 percent (48th place).

"Typical of the naysayers," says Mitch's twin. "You fail to see Indiana's remarkable performance against terrible odds. During both of those five-year intervals, when Democrats were in control almost all of those years, Indiana out-performed the five Great Lakes states. You need to recognize that Indiana, while weak, remains a positive force in a troubled region."

Suddenly, as will happen in dreams, the match shifts to a tennis court. The twin in Jill's camp serves an ace: "Indiana ranked 44th in the nation in acceleration of growth between those two periods, 1997 to 2002 and 2002 to 2007. Alternatively, we slowed down by 1.1 percent while the U.S. decelerated by just 0.2 percent. When will someone put the breaks on this severe downhill slide?"

Now serving, the twin working with Mitch burns the court with, "Again, you miss the point. Look at the share of GDP produced in the five Great Lake states: 16.6 percent in 1997 and 14.2 percent in 2007. That doesn't sound like much of a change, but the 2.4-percent loss of the Great Lakes exceeds the gains of the Southeastern, Rocky Mountain, and Far West regions combined.

"The economy of our extended region, from Pennsylvania to Missouri, from Wisconsin to Kentucky, is the weakest in the U.S. That explains why any Indiana governor celebrates even the smallest achievements. We are battling for survival in an economic whirlpool."

Jill's twin sends a lob deep into Mitch's court. "Should we be comparing ourselves to other places that are losers? Maybe we should think in terms of success and formulate plans that separate us from the problems of our neighbors. That's what we'll do."

Mitch's twin sends back a blistering shot. "That's what we have been doing, if you had paid attention."

I couldn't take any more truth and made myself wake up.



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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