MARCUS: Grouch finds good in the economy

My neighbor, Fred Fetid, was out weeding his garden.

"Howdy," I said. No answer from Fred.

"Another fine day," I offered.

"Don’t you read the newspapers?" Fred demanded. "Nothing is fine at all."

"Blasted Indiana Legislature is playing games," he said. "Still voting along strict party lines, which means individual members have either no brains or no backbone.

"We wouldn’t have all these fiscal problems if the Legislature had not boosted property tax relief for homeowners. They lowered local revenue and now don’t have enough state revenue to cover the deficit."

"Now wait," I insisted, "folks wanted property tax relief."

"Folks," Fred sneered. "They want fried potatoes and candy, but it doesn’t mean it’s good for them. The Legislature is supposed to do what is good for the people, particularly when the people have been consistently misled, don’t want to pay their fair share, and don’t understand the issues.

"Look at those disgruntled ‘folks’ in Evansville who are upset because a local homestead credit was revoked. They are thinking only of their own narrow interests. They don’t recognize that they have the only local government officials in the state with the guts to do the right thing."

"Hey," I said. "These are hard times; people don’t want to see their taxes rise."

"They would if they understood that they are jeopardizing their future," Fred replied. "Then there are fools advocating giving money to colleges and universities according to their graduation rates. Don’t they know that this will lead to even further dumbing-down of standards? We already take too many students into ‘institutions of higher learning’ who are unprepared.

"If we tie state support to graduation rates, we’ll have the least-educated graduates in the nation," Fred asserted.

"I can see your point," I said.

He went on weeding, tearing at the pathetic plants trying to survive in a world committed to grass, that evil stubble that requires pollutants to keep growing and noisy machines to keep trimmed.

"I’m fed up," Fred said. "People keep saying our economy is down the drain. Our real economy is just fine. It’s our financial system that’s fouled up."

"But all these business closings and unemployment … " I started to say when Fred interrupted.

"Look," he said, "if the electricity goes off in your house, is there anything wrong with your house? Of course not. Your house is just not able to function as you expect it to. The serious trouble comes if you don’t act fast enough to protect what you have.

"It’s the same with credit markets. They supply the power for our economy. When credit markets don’t work right, our economy slows down; it cannot provide us with everything and all the jobs we want.

"We still have the productive capacity we had before this recession," Fred said. "Business closings and unemployment give us an opportunity to refocus some of our resources. For example, Coachman Industries in Elkhart County is moving away from recreational vehicles to build fuel-efficient delivery and special vehicles. That’s smart business.

"General Motors and Chrysler are being given an opportunity to redirect their resources, to modernize their activities and relationships with workers and dealers, customers and suppliers. When we get those credit markets in working order again, there’s a good future for our country and our state."

"Fred," I said. "What’s happened? You’re showing positive tendencies. You ought to go in and rest until they go away."

Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.