Home » Economy

Economy

Articles

EYE ON THE PIE: Good news about Indiana economy

What do most people concerned with economic development want to see? More jobs at better pay. How can we tell if we are getting there? Simply by looking at what is happening to earnings. Earnings divided by the number of jobs equals average earnings per job. Hence, with elementary school arithmetic, we can say that earnings equals the number of jobs multiplied by the average earning per job, exactly the two indicators of economic development that most folks want to…

Read More

ECONOMIC ANALYSIS: Long road ahead for financing transportation

The recent Indiana Logistics Summit framed a number of issues that matter to Hoosiers young and old. I’ve done a fair amount of transportation and economic development research, but this conference held in Indianapolis was a chance for me to listen and learn. Here’s my take on some of the issues: Nationally, a significant piece of the public transportation infrastructure (roads and bridges, for example) has already outlived its anticipated life span. Solid engineering and construction coupled with continual maintenance…

Read More

Navigating the credit crunch: Will subprime woes leave you dry? Here’s what to look for.

For months, we’ve been reading and hearing news about the so-called subprime mortgage crisis and the resulting “credit crunch.” For thousands of families who have lost their homes to foreclosure, the crisis is clear. For most people, however, the impact isn’t so obvious. Beyond those directly affected by mortgage defaults, who else should be concerned about the aftershocks? Some economic forecasters are warning that the subprime mortgage situation and the ongoing weakness in the housing market could linger long enough…

Read More

VIEWPOINT: Avoiding Chinese ‘fifth-shipment’ follies

The recent announcement by the Indianapolis company Gilchrist and Soames that it would recall its privately branded toothpaste because of concerns regarding its diethylene glycol content is a small part of a larger global concern about the quality standards of goods made in China. The same week, Mattel recalled more than 9.5 million U.S. toys over concerns about the use of lead paint. Many Indiana firms rely on a steady stream of qualified products from China, so now seems a…

Read More

Commentary: Get the smoke out of our eyes

Andy Jacobs Jr. wrote in an IBJ column that smoking is an expensive and painful way to commit suicide. He’s right. But he didn’t go far enough. Breathing secondhand smoke at one’s place of employment is also an expensive and painful way to go. The world is beginning to read the smoke signals. Many countries have passed laws to protect their work force from secondhand smoke. Today, you cannot smoke even in an Irish pub. In our country, 22 states…

Read More

ECONOMIC ANALYSIS: Are we careening toward a recession? My bet is ‘no’

With a spate of market turbulence and a jobs report that counted 4,000 fewer net jobs last month, the discussion inevitably turns to the simple question: Are we heading for a recession? In recent days, Larry Summers, the former Treasury secretary and Harvard University economist, mentioned the possibility before a conference in Europe, and Fred Mishkin, a New York Federal Reserve governor and Columbia University economist, delivered an academic paper describing the potential for pre-emptive policies in the face of…

Read More

Weak dollar boosting state manufacturers

The sliding value of the U.S. dollar is boosting financial results for some of Indiana’s big exporters. The dollar recently
hit its lowest point in 15 years against an index of other major currencies, such as the euro, the Chinese yuan and Canadian
dollar.

Read More

BRIAN WILLIAMS: Indiana needs to get energy-wise

As the 14th-mostpopulous state in the union, Indiana generates a gross state product that is 16th-largest of the 50 states. Unfortunately, despite significant investments in equipment and processes by manufacturers and public-policy efforts to encourage the attraction and growth of knowledgeand technology-focused industries, our economy remains energy-inefficient. In 2003, Indiana was the country’s sixthlargest consumer of energy per capita, according to the Indiana Energy Report. Ninety-seven percent of Indiana’s electricity is generated by coal. Indiana is the fifthlargest emitter of…

Read More

ECONOMIC ANALYSIS Mike Hicks: It’s time for a little perspective on home foreclosures

A big financial crisis spreads the notion that the interests of Wall Street differ from the interests of Main Street. The “liquidity crisis” of the past few weeks, with its difficult jargon and complex financial instruments, is a prime example. Unfortunately, the notion that the tumult represents a failure of markets is exactly the wrong lesson to take away from this experience. In a nutshell, here’s why. In the past few years, mortgage lenders-ranging from the George Baileytype savings and…

Read More

MICKEY MAURER: No gala, but a glorious grand opening

In 2006, the Indiana Economic Development Corp. closed almost 200 transactions. Many recipients of the IEDC largess marked the opening of their job-creation activities with hightech galas featuring products rolling down gangways accompanied by the applause of dignitaries and well-wishers. Recognizing that attendance at these ceremonies was not an efficient use of time, the IEDC adopted the mantra, “We don’t cut ribbons, we just cut deals.” With rare exception, ribbon-cutting was left to the politicians. Last month, I participated in…

Read More

VOICES FROM THE INDUSTRY: Upon further review … new reasons for old buildings

Buildings, just like people, have lives. They’re born, they do their jobs, they take on new roles and, after about 75 years, most of them reach the end. Sadly, some beautiful ones die too soon, while a few ugly ones live too long. How should we decide when to save a building or when to tear it down? And have the reasons changed? The terms of renovation are well-known (adaptive re-use, mixed-use development and historic preservation). When our actions meet…

Read More

PROFILE: Electro-Spec: Aerospace niche helped business’ revenue skyrocket Decades later, Franklin electroplating firm working to diversify its customer base

Electro-Spec Aerospace niche helped business’ revenue skyrocket Decades later, Franklin electroplating firm working to diversify its customer base It all started with spoons. These days, Franklin-based Electro-Spec is a $5 million a year electroplating company that produces components for the automotive, telecommunications and medicaldevice industries. That’s quite a change from its origins in 1959, when the company focused on spiffing up antique silverware. “It did silver and gold plating of family heirlooms,” said President Jeff Smith, who bought the company…

Read More

VOICES FROM THE INDUSTRY: Indiana needs to develop more technology workers

Far from its older perception of a backoffice function, information technology today is cutting edge and business savvy, driving innovation in virtually every industrial sector. As an industry, IT in Indiana has seen significant growth in the past few years. In fact, the state’s tech nology sector has grown so quickly that the industry faces a new challenge-employers are experiencing explosive growth and cannot find enough qualified individuals to fill these new positions. As documented by the Indiana Department of…

Read More

ECONOMIC ANALYSIS: How Indiana’s industrial economy looks to a newcomer

This week marks the start of my tenure as director of Ball State University’s Bureau of Business Research. I take over from Pat Barkey, whose thoughts on the state’s economy have long graced this column. His will be hard shoes to fill. I have read over many of Pat’s old columns, and the one thing that stands out is how much we agree on the issues facing the state-and their solutions. Contrary to the old stereotypes, hard-headed economists usually come…

Read More

How mortgage meltdown sank Oak Street, others:

Just three years ago, Steve Alonso was at the top of his game. The veteran mortgage banker was a finalist for Ernst & Young’s Indiana entrepreneur of the year award, and his fast-growing company, Oak Street Mortgage, was ready ing for a $150 million initial public offering. Investors should feel fortunate the IPO never happened. Today, Oak Street sits in the evergrowing scrap heap of firms that failed amid the meltdown of the subprime-lending market. “I think we built a…

Read More

ECONOMIC ANALYSIS: Parting thoughts on Indiana’s strengths, weaknesses

The nice thing about economics is that we never really figure anything out. That hasn’t stopped folks like me from writing about economics and papers like this one from printing what we have to say. As I often have said to those who have remarked on these writings, nature abhors a vacuum. Someone else will be filling that vacuum next week, because this is my last column-for Indiana readers, at least. I am happy to leave you in the capable…

Read More

ECONOMIC ANALYSIS: State economy began year with an impressive spurt

The economy constantly is serving up complex puzzles for us to solve. Have energy prices peaked? How much longer will mortgage markets continue to bleed? How will the dollar’s decline affect the low prices for imported goods? These are complex issues, and some of us actually earn a living trying to sort them all out. But sometimes we need to step away and address the simpler questions-such as: How does the economy grow? Of course, some might say “not at…

Read More

NOTIONS: Health: another troubled bridge over U.S. waters

On a bookshelf in my office, I display a box of Kraft Macaroni & Cheese, three packs of Benson & Hedges cigarettes and the program from my late wife’s memorial service. I display the pasta because, until the company was spun off earlier this year, Kraft Foods was part of Altria Group. I display the Benson & Hedges because that brand is part of Phillip Morris USA, which is also part of Altria Group. I display the memorial-service program because…

Read More

VOICES FROM THE INDUSTRY: So, you really want to be a real estate developer …

Real estate developers have a secret: We’re not evil. OK … we’re not all evil This runs contrary to the perception that some people seem determined to promote. They opine that “good development” is an oxymoron. Development is a humbling business. It turns out that a lot of people know a lot more about the right way to do development than we do, and they’re not shy about letting us and everyone else know this, in public meetings, private conversations,…

Read More

INVESTING: Strange time for business: Bad, good news abounds

There is an ancient Chinese proverb that says, “May you live in interesting times.” The saying possesses a sort of electric connotation, with hopes that one experiences an exciting lifetime. Yet in the historical use of this proverb, the interpretation of “interesting times” hasn’t always meant “good times,” with some recitals implying “dangerous times.” For investors, our times are certainly interesting. We have a global economy that is booming. Economic growth across the planet has never been in such harmony….

Read More