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Mike Hicks

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ECONOMIC ANALYSIS: Why the resurgence of railroads will help drive state

I have two friends who are train fanatics of the worst kind. These guys aren’t just dazzled by the sight of a large train; they furtively seek them out. One friend has made it his life’s ambition to ride every rail line in Great Britain. The other scours eBay for rail schedules from the 19th century. Both of these wonderful men have exceptionally tolerant wives. I am a bit concerned my 4-year-old is turning into one of these creatures. He…

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ECONOMIC ANALYSIS: Why the resurgence of railroads will help drive state

I have two friends who are train fanatics of the worst kind. These guys aren’t just dazzled by the sight of a large train; they furtively seek them out. One friend has made it his life’s ambition to ride every rail line in Great Britain. The other scours eBay for rail schedules from the 19th century. Both of these wonderful men have exceptionally tolerant wives. I am a bit concerned my 4-year-old is turning into one of these creatures. He…

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ECONOMIC ANALYSIS: Why Indiana’s AAA bond rating should please all of us

Sometimes, obscure economic issues matter a great deal to our economic well-being. One example is the news that Indiana’s bond rankings have risen to the highest level, the highly coveted AAA ranking from Standard and Poor’s. Why that happened, what it means and why it is important should matter to Hoosiers. To begin with, all states, like virtually all households, borrow money to ease cash flow issues. States also borrow money to make infrastructure investments. The government essentially takes out…

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ECONOMIC ANALYSIS: Speculators aren’t to blame for pain at the gas pump

Speculators are blamed for a number of bad things-lately, even high gas prices. It is fun to find villains. In fact, casting blame has replaced baseball this summer as the official sport of Congress. But it might do some good for the soul to ask just who these speculators are, and how they might affect gasoline prices. To begin with, it is worth understanding that the price of gasoline is largely determined by the price of oil today. Refinery capacity,…

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ECONOMIC ANALYSIS: State’s new mortgage law is regulation gone awry

Indiana is known as a state possessed of thoughtful and minimalist regulatory constraint of business. That’s why a littleknown law enacted in 2007, which further regulates mortgage brokers, should come as a shock to many Hoosiers. As of July 1, when the law became effective, roughly 600 Indiana mortgage brokers (perhaps 1/10th of 1 percent of all small businesses in the state) were out of compliance. When a one-month extension granted by Secretary of State Todd Rokita expires next month,…

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ECONOMIC ANALYSIS: No simple solutions for our property taxes

There has been a common theme in many of the recent op-ed pieces in newspapers throughout the state: Our tax system is hard to understand and full of unnecessary complexities. I disagree, although there was a time when I also worried excessively about the intricacy of the tax system. But now that I am older, wiser and have come to understand that simple answers are usually helpful only for simple problems, my concern has abated. Here’s why: The real angst…

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ECONOMIC ANALYSIS: What we can learn from our kids’ summer activities

Summer is at its midpoint, and with it comes the end of youth baseball, scout camp and a seemingly endless string of swim meets for the Hicks household. Like many of you out there, I welcome a few more quiet evenings at home. But during those long third-inning stretches and sleepless evenings in a tent, I spent some time calculating how much we value these youth sports and activities. You might be surprised what this math tells us about ourselves….

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ECONOMIC ANALYSIS: Social-responsibility movement has a dark side

Identifying corporate villainy is a delightful pastime that virtually all of us have reveled in at some point or another. There are only two problems with this form of entertainment. A description of the first comes simply stated to us from the Gospel of John as “he who is without sin cast the first stone.” The second problem is a general lack of intellectual rigor in the debate. The heavily funded attacks on corporate America come primarily from organizations with…

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ECONOMIC ANALYSIS: Why economists focus on increasing the size of the pie

I recently was invited to attend a t ow n – h a l l – s t y l e debate between members of a local fire department and an a n t i – p r o p e r t y – t a x group. For those of you who are sporadic readers of this column, it is important for me to clarify that I have recently angered both groups. It seems my research on government…

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ECONOMIC ANALYSIS: Why it’s tough to get our arms around global warming

Congress is set to begin a debate on regulation designed to halt global warming. The question is whether and how we might limit greenhouse gases. Costs and benefits will be the central issue. So, despite what many would wish, this is primarily an economic debate. Below are the issues in a nutshell. There is strong scientific evidence that the Earth’s temperature is warming. Even so, there are a significant number of serious climate scientists who doubt this. And there is…

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ECONOMIC ANALYSIS: Enlightened law ended monopoly in cable TV business

A couple of weeks ago, I returned home one evening to find our old cable TV box sitting on the kitchen table. My wife had grown tired of the high price for our bundled cable TV and broadband Internet and called a rival company. When she was quoted the new price, it was out with the old and in with the new at record speed. It turns out that there was a nice, new service available on our street that…

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ECONOMIC ANALYSIS: Sky-high gas prices are revving up the political rhetoric

From all the noise surrounding gasoline prices, you’d think nobody actually benefited from the high prices. But, of course, some folks do benefit. Let’s figure out who they might be. Obviously, consumers don’t benefit. The average car owner in the United States pays about $80 more per month with gas at $4 per gallon than he did back when it was $2.25. Not good news, of course, but hardly the end of the world. Folks who provide goods and services…

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ECONOMIC ANALYSIS: How an economist pays tribute on Memorial Day

Memorial Day held great significance for me when a youngster growing up in the 1960s. Like many families, mine had paid a dear price over the preceding century, and memories of those contributions lingered over even those of us too young to really understand. World War I veterans were still spry, and the World War II veterans were in the fullness of their years. To your future columnist, they were all old men. Still, Memorial Day had meaning beyond the…

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ECONOMIC ANALYSIS: Candidates’ gas plans are just a lot of exhaust

It is an election year, and gas prices are high. Though this is not a mixture that is conducive to candor, the level of policy schizophrenia is amazing. It isn’t that any one policy is necessarily bad; it is simply that the nonsense spouted by the big three candidates has reached a new level. Sen. John McCain’s call for a summer gasoline tax amnesty would certainly provide a bit of cost savings for American families who use this time to…

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ECONOMIC ANALYSIS: Why the arguments against free trade don’t hold water

Americans are in a tough spot when it comes to negotiating free trade agreements. With the exception of a small Scandinavian country and a couple of European principalities, everyone we trade with has lower wages, weaker environmental standards, and less personal liberty. So it is easy to argue that we shouldn’t trade with a country until it becomes like us. This is the siren song of economic catastrophe. Here’s why. First, countries don’t trade with each other; people do. The…

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ECONOMIC ANALYSIS: A healthy economy makes an uninteresting campaign

In this curious primary season, Indiana finds itself the brief center of attention as Sens. Hillary Clinton and Barack Obama invest time and treasure in the crossroads of America. The strongest focus in both their campaigns is my favorite subject-the economy. Both candidates bemoan the poor Hoosier economy, its job losses and income inequality. This would be a superb campaign approach for both candidates, except that their claims are wholly, totally and embarrassingly devoid of facts. Indiana’s economy is doing…

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ECONOMIC ANALYSIS: Recession speculation is wrong way to use brainpower

With all the media warnings on the state of the U.S. economy, it is hard to get a good idea what a recession is and what it might mean for Hoosiers. The formal definition of a recession is two consecutive quarters of negative economic growth. We haven’t had even one quarter where real growth dipped below zero, and the weakerthan-usual employment data of the first three months this year won’t be enough to pull the economy into a recession. The…

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Making Hoosiers more educated is a tricky task ECONOMIC ANALYSIS:

One thing that virtually every bit of serious research on education has revealed is that parents play the biggest role in educational outcomes. My own work in this area found that more than 90 percent of the differences in regional educational attainment can be attributed solely to the educational history of parents. Families play a far bigger role in educational success than any differences that occur across schools. So, what then does this mean for public policy? In my last…

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ECONOMIC ANALYSIS: How kids do in high school matters to economy

Far too often, our worry about the shortterm state of the economy prevents us from focusing on the long term. That’s too bad because it is the long term, not the short run, that we have the most ability to influence. The most important issue looming for Indiana and the nation is education. Here is the fate of a representative group of 10 18-year-olds. Four years ago, our 10 Hoosier students entered high school. One could not read. As of…

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ECONOMIC ANALYSIS: Sales tax increase helps cut government spending

Indiana’s sales taxes rose a penny this week, to 7 percent. The increase was a necessary remedy to our property tax mess. But it’s worth laying out its impact on our economy. Sales tax is paid by Hoosier residents, visitors and businesses alike. By my estimates, Indiana households will pay $640 million in additional sales taxes, businesses $500 million more, and out-of-state visitors an extra $160 million. The two effects economists might worry about with a tax hike are changes…

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