Articles

ECONOMIC ANALYSIS: How Hoosiers who smoke are hurting state economy

For those who have gone through life shying away from anything involving numbers, the demonstration of the principle of compound interest is usually an eye-opening revelation. It’s quite simple, actually. Money set aside today accrues interest, if it is wisely invested. But so does the interest on what you set aside yesterday. Over a long time span, this snowballing of interest on interest can build up to a sizable nest egg. That’s why financial advisers always tell you to start…

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ECONOMIC ANALYSIS: Ideas needed for fixing health care financing

It’s been 15 years since third-party presidential candidate Ross Perot briefly captured the nation’s attention with his crisp, witty promises to “look under the hood” to fix the problems in Washington. Since that time, some problems have gotten worse, some have gotten better. But in this era of political polarization and legislative gridlock, the idea of a new face coming to town to actually fix some of the problems we face today is as appealing as ever. What would such…

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ECONOMIC ANALYSIS: Turnabout is fair play in evaluating education

Much has been made in recent years of the performance of our state’s secondary schools. In particular, the recent revisions made to high school graduation statistics, suggesting that as few as three out of four ninth-graders graduate with their class have sounded an alarm. People are saying something is wrong with K-12 education in Indiana, and they would appear to have plenty of ammunition to support their arguments. But turnabout is fair play in the business of evaluating education. Since…

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ECONOMIC ANALYSIS: How consumers respond when paper profits vanish

Most market sages know it already, but there is always a new generation of investors that needs to relearn the lesson taught by this latest financial market volatility. Namely, that paper wealth is subject to change. Turning your financial wealth into something else of value-like a house, or a car, or even a bond-always contains an element of uncertainty. If you want to take it literally, more than a trillion dollars of wealth was wiped out in the first five…

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ECONOMIC ANALYSIS: Markets pay a premium for the college-educated

Nothing erases the thrill of getting a raise from your employer faster than the news that someone else got a bigger one. We care about how much money our friends, neighbors and coworkers make-not always in a benevolent sense-even though there is usually little we can do about it. The trappings of material wealth are all around us, and it is almost impossible, it seems, not to get caught up in the game. But despair over disparities in income and…

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ECONOMIC ANALYSIS: Fate of U.S. auto industry is controlled by investors

On the same black Thursday that Borg Warner announced it would close its 780-worker Muncie manufacturing facility in 2009, the price of its stock surged 6 percent. Are the traders on Wall Street heartless, or prejudiced against Muncie, or do they simply like bad news? In truth, none of these answers is probably correct, although we really have no way of knowing. But the divergent reactions of stockholders and workers and their families to the news that nearly a century…

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ECONOMIC ANALYSIS: Earmarking taxes in vogue, but is it good state policy?

I was taught economics, and in particular, the subject of public finance, by a faculty dominated by old Kennedy Democrats. A lot of that teaching has rubbed off or has simply been forgotten. Much of it also could be dismissed as idealism, a sort of ivory-tower thinking not relevant to the real world. Yet as I scan and digest the various tax proposals now in front of the Indiana General Assembly, several of those old lessons keep coming to my…

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ECONOMIC ANALYSIS: Those from corrupt cultures more likely to ignore laws

Do we obey laws because we fear punishment? Or is it simply a habit we acquired to which we don’t otherwise give much thought? Either way, it is a good thing for our communities, our governments and our entire society that so many of us are, generally speaking, law-abiding. One can scarcely imagine the chaos that would be caused if 300 million people lied, stole and murdered our way through the day without giving it a moment’s thought. It’s good…

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ECONOMIC ANALYSIS: How to extricate ourselves from the property tax mess

There once was a time when everyone watched network news, and there was one newscast in the heat of presidential primary season that I’ll always remember. After watching a succession of unsuccessful candidates in post-election press conferences blaming anything and everything-except themselves-for their poor showings, correspondent Roger Mudd had seen enough. Just once, he said, he would like to see candidates stand up and say it straight-they lost because folks liked the other candidates better. One of these days, someone…

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ECONOMIC ANALYSIS: Our love-hate relationship with globalization boom

Our generation didn’t invent globalization, but we’ve certainly moved it to a new level. Even here in the isolated Midwest, it’s hard to find a product, a job or a community that hasn’t been affected by the high degree of connectivity among customers, businesses, and buyers and sellers of all kinds around the globe. We’ve enjoyed a cornucopia of incredible new products-from cell phones to flat-screen televisions to microprocessor-laden automobiles-that have had many or all of their principal parts made…

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ECONOMIC ANALYSIS: U.S. job growth improves, but Midwest is wallflower

We are a nation of more than 300 million people, over half of whom are in the civilian work force, with almost 146 million having jobs. So why do we get so excited, or disappointed, when the government scorekeepers report each month about job gains of a mere couple of hundred thousand? Of course, when I say “we,” I mean the tiny group of economists, policymakers and financial analysts who keep track of such things. Most businesspeople, let alone folks…

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ECONOMIC ANALYSIS: Ford was from another era, one walloped by inflation

The death of a former president still is a pretty big deal in this country. We can probably thank our first president, one of the most beloved men in the country in his time, for the reverence and respect we hold for those who have sat in the Oval Office. But as the media pundits remark on the political decisions and world events that helped define President Gerald Ford’s administration, I am struck by a retrospective of a different type….

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ECONOMIC ANALYSIS: Laws, regulations rippling through corporate America

They say that one way to avoid getting angry at the car traffic around you is to imagine that the drivers are people you know. Likewise, it is said that substituting the words “other people” for the word “government” in the discussion of government’s obligations and responsibilities toward its citizens can take some of the thunder out of the latter’s demands. That’s no great insight, of course. We want to impress, please and be liked by people. But organizations, bureaucracies…

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ECONOMIC ANALYSIS: Amid carnage, state still a force in manufacturing

What puts Indiana on the map in the world’s eyes? From an image point of view, it might be race cars, basketball or even David Letterman. But in terms of economic footprint, it is our manufactured products and our goods-making and goods-moving expertise that stand out. We are a world-class manufacturer of everything from rolled steel to artificial limbs, and we employ more people and produce more output in manufacturing, proportionately speaking, than any other state in the nation. If…

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ECONOMIC ANALYSIS: Researching riddles from the labor market

When you work as a researcher at a large university, you’ve got plenty of company. I may not fully appreciate every nuance of the specialized research being done by the broad spectrum of professors and scientists I work with, but all of us share a common understanding of the research process, and what it takes to be successful. We slave over data sets, keep an ever-alert eye for funding and support, and try to get others excited about our findings….

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ECONOMIC ANALYSIS: Legislative process has its own language

It’s probably not wise to admit this in a family-friendly publication, but one of my favorite comedians always has been George Carlin. The man has a genius for zooming in on the language we hear and use every day and finding nuances and symbolism that we never knew was there. Every time I land in an airplane, I have to laugh, because George Carlin reminded us how crazy it is for the pilot who landed at the same time we…

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ECONOMIC ANALYSIS: China’s economic engine may be starting to sputter

It seemed like a reasonable forecast at the time. After an extraordinarily violent and deadly hurricane season in 2005, predictions of a second straight severe summer in 2006 made big headlines. But 2006 has turned out to be a year where not a single hurricane-rated storm has made U.S. landfall, one of only 21 years on record here that has been hurricane-free. It’s hardly the first time forecasters have eaten humble pie. And the experience serves to remind us that…

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ECONOMIC ANALYSIS: Daniel’s toll-road plan futuristic, not dated

Is building roads innovative? Some reactions voiced in the wake of the Gov. Mitch Daniels’ proposal to build a 75-mile beltway around the east and southern quadrants of central Indiana say no. Outer belts, it is said, are a mistaken product of 1960sera thinking, robbing growth from central cities and helping create the faceless suburban landscape that surrounds so many major cities today. Innovative thinking on transportation, one might say, would embrace new technology and get us away from the…

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ECONOMIC ANALYSIS: Our technology woes begin in grade school

Those of us who work for universities soon become acquainted with the concept of tenure, which is a status typically conferred upon those of faculty rank who have demonstrated to their colleagues the ability to teach and conduct research to a high standard. Those who achieve tenured status are more free to speak their minds about controversial issues, since it is much more difficult for their superiors to terminate or dismiss them without just cause. The words penned in this…

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ECONOMIC ANALYSIS: Improving state economy defies simple measures

The replacement of the Indiana Department of Commerce with the privately directed Indiana Economic Development Corp. has been mostly a non-issue in this election season. While most of the fist-pounding, face-reddening rhetoric has been directed at such meaty issues as how long we wait when we go to the BMV office once a year and whether or not we should reset our clocks each spring and fall, the issue of how we go about reinventing and reinvigorating the economy that…

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