Now that it’s over, let’s talk recession

 

Elected officials want to be re-elected. To achieve that end, they want us to believe they are responsible for the good things that happen. They want us to ignore bad things or at least conclude they are not the cause of the bad things.

Thus, our elected Hoosier state officials (the governor, his minions in the administration and his cohorts in the legislature) tout 2014 as a great year, a record breaking year. At the same time, their party depicts the national economy as a continuing disaster.

Why do they use magic glasses to distort the truth? The facts reveal Indiana’s economy is not doing as well as the national economy. If, however, Indiana is doing so well, then the national economy must be absolutely sensational. However, if the nation is in the dumpster, then Indiana must be in the landfill.

About 10 days ago the U.S. Bureau of Economic Analysis released the latest quarterly data on how the states are doing. Their data allows us to compare third quarter 2013 to the same quarter in 2014; that is a good proxy for the full year of 2014 as we await later data.

Personal income in the U.S. was up 3.9 percent; Indiana up 3.1 percent. Looking deeper, total earnings of Indiana workers rose only 2.1 percent compared to a 4.0 percent rise nationally. We, the state supposedly setting records, saw our earnings growth rank 44th among the 50 states.

OK, take out the farm sector and forget about government. Look at just private non-farm earnings, which is supposedly where we target our economic development efforts: U.S. growth = 4.9 percent, Indiana (40th) = 3.6 percent.

Why do we take out farming and government? Farming had a bad year in 2013-14; earnings in farming declined 15.5 percent nationally, but things were much worse in Indiana where farm earnings fell by more than 39 percent. Government was a drag on the economy in the year with earnings of state and local government employees growing at an anemic 1.4 percent across the nation, but managing only a 0.3 percent climb in Indiana. Of course, our anti-government government is proud of that pathetic performance.

Indiana did out-perform the nation in growth of earnings by workers in manufacturing. There Indiana saw an increase of 5.0 percent while the nation grew by only 3.7 percent. Remember private non-farm earnings grew nationally by 4.9 percent. This means our proudest achievement was in a sector that nationally could not keep pace with the overall economy.

It’s not my purpose to run down our state. Let’s just have some realism from our state leaders. Indiana’s economy continues to be a problem. Every now and then there are flashes of light, but fundamentally we are stumbling in the shadows. If the electorate were paying attention, our leadership could not get away with ignoring the truth.

Mr. Marcus is an economist, writer, and speaker who may be reached at mortonjmarcus@yahoo.com.

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