Welcome to the archives for NewsTalk, an IBJ blog published from November 2007 through December 2010.

The root of Indiana's myriad problems

November 22, 2010

If you follow Morton Marcus’ columns in IBJ, it’s hard not to wince.

In the most recent issue, the former director of Indiana University’s Indiana Business Research Center argues that job creation alone won’t keep young people in the state. Youth leave because their communities aren’t vibrant, interesting places to live, he contends, and for the same reasons those who leave don’t want to come back home.

A week earlier Marcus pointed out that job growth is below average. He also noted Indiana would look much worse if the state were not drawing residents from neighboring Chicago, Cincinnati and Louisville, Indiana.

The week before the population column, he noted that no other state relies as much on its residents’ drawing a wage from someone else. Because the self-employed tend to earn more money, that helps explain why average earnings in Indiana are not keeping up with the national average.

But what does it all mean? Ask Marcus to summarize his observations and here’s what you hear: “We are slow and sliding down.”

Slow and sliding. Ouch again. Look past the press releases of job announcements, he says, and the objective reality is that the state is still in the decline it entered in the late ’70s.

Indiana has never recovered from the woes of the domestic auto industry and the advent of technology that made it possible for so many tasks to be centralized in out-of-state headquarters, leaving behind the branch operations that long supported the state in automotive and other industries.

Indiana will have to work harder than Ohio and even Michigan to pull out of the decline, Marcus says. Ohio and Michigan also are suffering from the decline of the Detroit automakers, he acknowledges, but they can draw from significantly deeper reserves to stage a comeback.

Remember that Ohio has three major metro areas in Cincinnati, Cleveland and Columbus, and that Indiana has only one: Indianapolis. Battered as it is, Michigan has legions of technologically savvy workers in the Detroit area. Moreover, Ann Arbor hosts a huge concentration of intellectual power, whereas Indiana’s is scattered among not only Bloomington and West Lafayette but also the medical school at IUPUI—not conducive conditions for the massing of smart people who dream up ideas and create businesses.

What about Indianapolis? It’s doing OK, but just OK, Marcus says. Much better than its dreary past, but still not keeping up with many metros on measures ranging from incomes to education.

The real secret to reversing the state’s fortunes lies in making neighborhoods, communities and cities places where bright, creative people want to live, he says. When sidewalks go unrepaired and trees are not planted, the neglect casts a pall and signals to young people the place has no future. Loss of energy, ideas and prosperity are certain to follow.

Why aren’t more places in Indiana great locations to sink roots? Why don’t communities find the money to fix their sidewalks, and why don’t citizens plant trees after aged ones are cut down? That’s a question Marcus, now 72, has pondered since coming to the state 40 years ago. While he ran the IBRC, he always said he didn’t need another economist, but rather an anthropologist. An economist could never explain the lack of pride and interest in building community.

“Our problems are in our culture,” he says.

What are your thoughts? Do you agree that the culture is the real problem?

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