Indiana needs to diversify

“How has Indiana’s economy changed in the 21st century?” the young reporter from the Weekly Swine & Whine asked. From the voice on the phone, I could not determine his/her gender.

“Well,” I said with academic abstraction, “that’s a more complex question than you might think. Are we talking about the structure of employment, the composition of compensation or the value of output?”

“I don’t care,” the reporter said. “My editor sent a text saying I must interview you about that question.”

“Then let’s talk real gross domestic product (GDP); you do know what real GDP is?” I smirked.

“Sure,” s/he replied. “I took Advanced Placement Econ. in high school. It’s the value of certain goods and services produced in the nation during a given year, adjusted for inflation.”

At this I started to say, “In my day…,” but I didn’t. Recollection is wasted on the young. “Indiana’s economy, as measured by real GDP, grew by 15 percent from 2000 to 2014, much slower than the nation’s 25 percent growth.”

“I don’t believe it,” the reporter said. “Everything I’ve heard is how we’re among the most progressive states in the nation.”

“Yes,” I smiled. “And North Koreans believe they live in an economic paradise.”

“It doesn’t matter,” s/he said. “You didn’t answer my question: How has the structure of Indiana’s economy changed?”

“First, the U.S. private sector grew by 28 percent while Indiana lagged, growing only 18 percent. In the government sector, the U.S. grew by 8 percent as Indiana declined by 6 percent.”

“So,” I could hear glee in the reporter’s voice, “Indiana outstripped the nation in cutting government’s odious output.”

“If that’s your distorted view,” I said. “Now, let’s talk manufacturing.”

“Right, Indiana’s leading economic activity,” s/he said.

“Nationally,” I began, “manufacturing grew by 20 percent and 29 percent in Indiana.”

“Naturally,” the reporter said, “the world wants our steel, cars, trucks, machinery, auto parts, home appliances and all that stuff.”

“Not as much as you might think,” I said. “You’re focused on durable goods and there Indiana’s output grew slower than the U.S. We grew much faster than the nation (26 percent verses 2 percent) in the production of non- durable goods. Maybe it’s our food and drugs the world wants.”

“So wind it up,” s/he said. “What’s the bottom line?”

I wanted to give the many details of the whole picture but yielded to the impatience of youth. “In 2000, Indiana differed from the nation in the composition of its GDP by 15 percent; by 2014, we were 19 percent different from the U.S.”

“Is that good or bad?” the junior journalist asked.

“Depends,” I said with practiced finesse. “It’s good, if you think differentiation and specialization leads to greater wealth. Yet, it’s bad, if you believe Indiana needs to diversify to be more like tomorrow’s America rather than yesterday’s nation.”