A Citizen's Guide to Indiana

The Midwesterner has a post entitled The Outsourcing of Santa Claus. The post discusses an article by economist Michael Spence.

There are some notions in here that I’m sure I will muddle, even though the Midwesterner has simplified them for me, but Spence apparently argues that the economy consists of tradable and nontradable goods. (Somewhat confusingly to me, services are a subset of goods in these definitions). Tradable goods appear to hold their value across space (e.g. most manufactured goods). The value of nontradable goods appears to be dependent on proximity between provider and consumer (taxis, haircuts, and healthcare).

Automation and competition against cheap foreign labor has diminished the number of Midwesterners who can be employed producing tradable goods. Focus has been made on nontradable goods.

Many Midwestern cities see their post-industrial future in a combination of health care, education and high-end manufacturing. They may be chasing an impossible dream.

This is a conclusion drawn from recent studies that argue that manufacturing — high-end or not — isn’t coming back, at least as a major source of jobs, while growth in jobs in health care and education is going to slow down or stop, mostly because the governments that fund it are deeply in debt.

For many Midwestern cities, this is like telling them there’s no Santa Claus.

The problem may be that Luddite fears could be coming to pass. Technology is killing jobs. We’re still producing as much as ever – more even. The economy is working just fine. It just doesn’t include as many people.

This has me noodling about the nature of wealth, the nature of money, and the nature of work. I think there is an underlying premise that we can’t sustain a middle class society if we all just go around giving each other haircuts or whatever? The government can’t just give away money. Sounds reasonable, but why not? Because we have to eat and have shelter; we need someone to make the stuff. Who is going to do the hard work to farm and make stuff when they can just get free money from the government? People will stop working, you’ll have more demand than supply, money will be worthless.

But, I wonder. Automation suggests to me that these goods are easier to make. What happens if government is essentially printing money to pay for these non-tradable goods (healthcare and education, for example) and the money supply enters the economy that way instead of through the Federal Reserve?

I think of money as a way of storing value, like a battery stores energy. Instead of trading this service for that product directly, you use money so that you can get more people in on the game at once. Maybe you cut hair and you don’t know a widget producer who needs a haircut. But, if you give a haircut to a lawyer who writes a contract for a boat maker who sells a pontoon to a widget maker, the potential for agreeable exchanges expands exponentially. The key is to make sure that people trust that the money they receive in exchange for their service holds value long enough that they get a fair trade when they’re ready to spend their money.

Seems like if people are willing to work there should be a way to let them do so in a way that lets them hook up with other people who also want to work and let them trade one thing for another. Unemployment due to reasons other than laziness seems like a failure of coordination more than some inevitable byproduct of technology.

I’m mostly thinking out loud with this post, so take it for whatever it’s worth.

Luann Franklin, writing for the Northwest Indiana Times, has an article entitled “Property Tax Caps Devastating to Indiana Municipalities.” The story reports on the comments of the head of the Indiana Association of Cities and Towns, Matthew Greller.

Greller says that “tighten your belt” is easy to say, but with so much of a city’s budget being public safety and things like roads, there isn’t a lot to cut without backing your city into 19th or early 20th century levels of service. (To some, a return to the 19th century is undoubtedly a feature, not a bug.) The General Assembly has also apparently been taking a “state government small enough to fit in city hall” approach:

Greller said the Indiana General Assembly and the state government agencies also are negatively affecting local governments.
Of the 900 bills introduced during this legislative session, more than half “have some impact on local government,” he said. “The Indiana legislature is taking a very onerous, micromanagement approach. That will have to stop.”

State agencies have encroached on “home rule,” limiting or taking over the powers of local governments, Greller said. In addition, state government has to certify municipal budgets, but never does so on time, he said.

Greller was also not amused by the recent revelation that the State had mistakenly retained $200 million that belonged to local government.

“So, kids must have a tougher time learning about analog clocks these days than when you first got started,” says I to my child’s seasoned teacher.

“Oh yes,” says she. “It’s a shame. They can tell you the numbers on a digital clock; but that’s not *really* telling time.” (Or words to that effect – I don’t have a transcript to go back to.)

“Surely you can’t use this brief exchange to endorse the reactionary school reform crusaders,” says the reader; accustomed to a comfortable left-center orthodoxy in these pages. Maybe I could, but I won’t. And stop calling me “Shirley.”

I find myself in a bit of a quandary that probably isn’t that unusual. I find that there are ways in which I think (in my fairly uninformed kind of way) that my kids’ education could be better. Extrapolating, there are probably ways in which our community and our state could make the entire system better. I look around and see that there are blocs advocating for “reform” and blocs advocating, in effect – if not explicitly, for “status quo.” Trouble is, the reformers seem to be sanguine about the prospect of losing the baby, so long as we can get rid of that damnable bathwater. I suspect their cures will be worse than the disease. Lack of trust and a common vision with the reformers tend to make me default to the status quo.

But what was this about clocks? The exchange seemed a nice little metaphor for teachers who are just marking time (clever, huh?) until they hit retirement. Because it’s so convenient, I’m just going to pin a lot of assumptions and projections on this teacher so I can tell a little story that illustrates a minor point. The real-life teacher may not actually bear a great deal of resemblance to the allegorical teacher I need for purposes of this blog post.

In any case, it’s not a shame that kids have less exposure to analog clocks than they used to outside of school. It’s a morally neutral change in circumstances. There are simply fewer analog clocks “in the wild” than there are in the workbook pages of the average elementary school. If you are still an engaged teacher, you either compensate by working harder to teach the kids to read such clocks or you place less emphasis on it, because in the scheme of things, who the hell cares? When are kids going to be more than 20 feet from a digital clock these days? It’s not *really* telling time when you read it on a digital clock versus an analog clock? I know it’s only first grade, but time is such a deeply fascinating subject, I can’t fathom anything more than a passing shoulder shrug about the particulars of a clock display.

And, if you’re not spending time giving the kids the outlines of time being variable at relativistic speeds (my kids get enough of that kind of thing from Dad), then move on to teaching kids how to deal with the new realities, challenges, and opportunities kids are seeing in the wild now where once they saw analog clocks. All I’m really advocating (and it’s a huge thing – easier said than done) are teaching styles that adapt methods to the world’s changing circumstances. Some teachers, I’m afraid, are more likely to begrudge the fact that kids don’t succeed as readily to old methods.

That said, I’m hesitant to make too much of a stink about this sort of thing because I fear my desire to keep teachers motivated to adapt with the times can be co-opted by the “reformers” to eviscerate the employment rights of the old timers because they’ll happily dump experience if it means that management can get more power and can hire younger teachers primarily because they’ll work cheaper. It won’t matter too much how smart my kids are if they live in a society with no functioning middle class. I assume Somalians are born with as much innate intelligence as anywhere else; but individual potential just doesn’t mean that much when matched against massive structural imbalances.

Just reading Maureen Hayden’s “Story’s Not Over for Indiana’s Bookkeepers” about the half-billion dollars the Daniels’ administration failed to properly account for. It talks about this being a particularly rough item for Gov. Daniels’ to deal with on account of his reputation as a penny-pincher (Iraq War era tenure at the Office of Management & Budget notwithstanding, apparently.)

Apparently the laser focus is only on the spending side of the ledger; the income side of the ledger gets a little fuzzy.

Steven Vaughan-Nichols has an article entitled “Before the Internet: The Golden Age of Online Services.” It’s a little stroll down memory lane for folks who were connecting online before the web; mainly reviewing the major online services like AOL, Prodigy, and Compuserve. The world was at your fingertips if you had a 300 baud modem and many dollars per hour.

I was a teen and in college during those days and so didn’t have the money, or really, the need for those services. Although, the lack of a broadly available Internet was a significant cause of one of the formative events in my life. I’ve told the story before of my misspent youth:

Today, I’ll go with the Internet. It’s really hard to remember how I did things before it came along. This is a tool that I was, perhaps, waiting for more eagerly than most. When I was 14, I got arrested for a crime the Internet has rendered obsolete. I was stealing phone calls from a local long distance company called Saverline. It worked like MCI or Sprint (like they did at the time, anyway). If you were a customer, you dialed their switchboard number, dialed your long distance number, and then (here is the crack security) dialed your *four* digit code. I (and a number of my fellow Commodore 64 users) would keep dialing until we got a working four digit code. I’d use the number to call long distance to connect to a Bulletin Board System in other cities. I really enjoyed the discussion boards on those systems, but we also used the systems to download games (“warez”). I was also the sort of kid who was likely to pore over encyclopedias and the like when I got my hands on them.

The State has apparently found another accounting error to the tune of about $200 million to supplement the $300 million mistake discovered in December. The error discovered in December had been shortchanging the state’s general fund. The more recent error has to do with counties option income taxes and economic development income taxes. 

The State Board of Accounts has made county specific numbers available here. Looks like the distribution to my home county of Tippecanoe was about $5 million light for 2011 and 2012.