NYTimes has a good article about Mitch’s Daniel’s Indiana and some of the heart rending tradeoffs Daniels has had to make in the face of recessionary winds:
“People think great business climate, Indiana comes to mind. People think infrastructure, we’re exactly who they think of.”Because recessionary winds have not toppled Indiana’s house, this state is often overlooked in the news coverage of budget crises across the nation — particularly since its next-door neighbor Illinois offers such an outsize example of the financial ills afflicting state and local budgets.
But Indiana is no world apart, even if Mr. Daniels would like to suggest it is. Large cracks have opened in [Indiana’s] economic foundation, a sign of just how severe the downturn remains.
Mr. Daniels alone cannot take all credit or shoulder the blame for the health of Indiana’s economy. But it is his work here — and his reputation as a cost-cutting, tough-on-labor conservative obsessed with fiscal problems — that fueled interest in his presidential ambitions before he announced that he would not run because of family considerations.
The state also serves as a case study of the often large tradeoffs required to balance the books when political leaders take the possibility of raising income taxes off the table. Fiscal conservatism, in other words, comes with its own costs. “Much like the rest of the country, we did not survive unscathed,” said Jessica Fraser, a research analyst with the Indiana Institute for Working Families.
Hundreds of thousands of Indiana residents are unemployed and underemployed. Although the state’s unemployment rate is slightly better than that of its neighboring states, a striking number of people here — a significantly greater percentage than in Illinois or Ohio — have simply left the work force altogether since the dawn of the recession.
For the second year in a row, Hoosiers ranked fifth nationally in personal bankruptcies, at 7.1 people per 1,000 residents. (Illinois came in 11th.) Indiana’s median family income is just 86 percent of that of the rest of the country.Property tax caps, put in place over the past few years, offer relief to limping homeowners but have pushed school boards and city leaders, they say, into rounds of budget cutting and layoffs.
So Indiana , like the US, is right in the face of the Economic Perfect Storm –
1) Mortgage Meltdown destroys middle and lower class jobs, housing, and savings endangering the consumer spending 70% of the US GDP;
2)The long term jobs prospects in the US faces the scourge of outsourcing as the Race to the Bottom results in 20% or greater unemployment, under-employment or involuntarily left employment. At the same time, high school and college graduates [often saddled with large college debts], step into a downturned jobmarket;
3)meanwhile Banks and Financial Institutions, bailed outby the public, are ignoring small business loan needs and mortgage relief in their rush to get back into the highly profitable international financial betting games using derivatives;
4)State and local governments, hit by lowered revenues from property and sales taxes and thus faced with huge deficits, are forced to cutback essential services like policing, education, road repair, etc.
Now add to this a Republican Party and a Financial Community, responsible for both the Economic Meltdown and the US Deficit Crisis, are grossly misbehaving. Each is now clamoring for deficit control and no new taxes. And yet Financial Institutions and businesses in general are studiously avoiding paying their own taxes or setting aside the capital needed to run their operations without having to incur another gargantuan taxpayer bailout. So the hypocrisy could not be greater as the major Banks and Financial institutions defy getting their finances in order while deny small busineses and homeowners monies as they are “too great a credit risk” . Likewise the Republican Party is standing by its treasonous “Starve the Beast policy, and deliberate irrationality on the deficit insisting on no new taxes including tax loophole elimination but allowing for major cuts to the social safety net. So is it any wonder that a large-scale national anxiety is now crystallizing – Fear of a National Decline.
Fear of National Decline Emerges
Is it surprising therefore as July 4th and the looming deficit ceiling debate approaches, Reuters asks the question – Is the American Dream Over? Or Tom Friedman at the NYTimes asks whether 100 days out of a 4 year term is good enough to govern. Or Paul Farrell at Marketwatch takes a grim look at US Economic Policy that echoes the sentimanets of Barbara Whelehan at Bankrate.com. In general the following thinking is being made: Stock Market Decline=> is engenedered by Economic Decline=>is increasing social, educational and jobs decline at the heart of National Decline. Friedman argues that it will take a huge Market Collapse or a major domestic Natural Disaster to galvanize the Nation and its economic and political elites into some semblance of co-operative action. Time to take a fifth of your favorite spirits contemplating this conclusion.