“Geez Morton, lighten up,” was one of the e-mails that came in this week. I find it difficult to do that while our state and national economies are under such stress.
Another correspondent wanted an answer to that persistent question, “Are we better off than we were a year ago? Four years ago?” Here is a small part of that answer:
At this writing, there are 5.5 million more jobs in the country than four years ago, an increase averaging 1 percent per year. Since 2004, Indiana gained 40,200 jobs, for an average annual growth of 0.3 percent per year.
In the past year alone, the U.S. lost 517,000 jobs, a decline of 0.4 percent. Indiana lost 34,100 in the past year, 1.1 percent of our jobs.
But there is much more information necessary to say that we are or are not “better off.” For example, consider manufacturing. Nationally, employment is falling less rapidly than in Indiana. Between 2004 and 2008, the national rate of decline in manufacturing jobs averaged 1.6 percent, while in Indiana it was 1.9 percent.
In the past year, the country saw a 3.0-percent decline in manufacturing jobs, while Indiana had a fall of 3.2 percent. Similar results can be found in the average weekly wages of manufacturing workers; Hoosiers are not keeping pace with their national brothers and sisters.
That is the kind of information that makes news headlines and excites politicians, because it has inflammatory power. Whichever party is out of power decries the facts; those in office cite them as examples of why we must hold to the path they have cut recently through the economic forest.
The truth is that Indiana has lagged the nation in virtually every measure of economic consequence for the past 30 years. Democrats and Republicans have had their turns exercising executive and legislative powers. Both parties have reason to be proud of their achievements. Yet neither party can claim to have defeated, even deflected, the forces that created our economic afflictions.
Why? Policymakers often do not put today into the context of yesterday. They do not know what is happening today and even less about yesterday. For example, this year the U.S. Bureau of Labor Statistics discontinued detailed employment data necessary for good decisions in 65 metropolitan areas, including Anderson, Columbus, Kokomo and Michigan City-LaPorte.
Why? The budget passed by Congress was too tight. Other federal agencies also cut statistical programs. Have you asked your congressional candidates if they intend to restore the programs that were cut?
The current mortgage mess is another example. How many homes in your county stand vacant because of foreclosure? How many mortgage payers in your county are behind in their payments? Why? Without this information we cannot mount programs to correct the problems that we believe exist.
Many Hoosiers are boiling with anger about the bad deeds of “those people.” Who are “those people”? We all “know” that mortgages were taken out by people who could not afford the houses they were buying. Was this the fault of the home buyer, the mortgage broker, the banker, Fannie, Freddie or some other “Wall Street” villain?
How many of the subprime loans were issued to people who could not afford the monthly payments compared to those who did not have good credit records? Were they misled or coerced into signing those mortgages?
The lack of information shapes myth; it should not shape policy. Are we so crazed that we would forge regulations to prevent such abuses in the future if they have been trivial in the past?
Neither political party calls for better information about our economy; both say data are not sexy. Are candidates wearing only transparent ignorance attractive to voters? Hoosiers should not be satisfied to vote on Nov. 4 for candidates whose policies are connected only vaguely to reality.
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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