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home : most recent : statewide implications July 27, 2017


7/3/2017 6:24:00 PM
OPINION: The wisdom of long-run thinking

Michael Hicks is the George and Frances Ball Distinguished Professor of Economics and the director of the Center for Business and Economic Research at Ball State University. His column appears in Indiana newspapers.

One of my favorite metaphors about wisdom involves the roofing profession. It is said that all roofers will eventually fall off a roof. The difference between and old and young roofers is that the old roofer will quickly look for a place to land, while the young roofer will continue to try to hold on until he runs out of roof. In many ways I think this an apt symbol for what ails many local governments in the Midwest. Let me explain.

Indiana is home to some of the fastest growing places in the nation. The communities around Indianapolis are booming in ways I can only liken to suburban Washington, D.C. in the 1980s and later. Portions of the Chicago suburbs are also booming, and with new bridges across the Ohio, so, too, will communities in the Louisville metropolitan area. Beyond that, only greater Evansville and Fort Wayne show any spark of growth that exceeds the nation as a whole.

This means that nearly all of Indiana is in absolute or relative population decline. In some places, this decline is modest, with a reasonable prognosis for a turnaround within a generation. But, in as many as 50 counties, net population loss is likely to continue until at least until mid-century. Sadly, in many places, policymakers and voters simply fail to recognize these trends. Remarkably, in the wake of the 1950 Census, national studies painted an unambiguous picture of population decline in rural and small town Indiana.

I can use Muncie as an example. Population growth in 1950 had already slowed from the previous Census of 1940. By 1960, more than 95 percent of population growth was through annexation, with the 1950 city borders seeing less than 0.5 percent of growth over 10 years. I use Muncie as a representative example of a nearly identical trend that occurred in 50 other Hoosier counties.

One frequent outcome of sort of long-run economic decline is a lack of focus on the long run. It is the problem of the young roofer. So, in communities across Indiana, efforts to shore up economic growth have often targeted whatever new bright shiny object appears to offer hope. Thus, elected officials and economic development boards lurch from fad to fad.  I can name at least one major Hoosier city that has placed expensive losing bets on emerging media, alternative energy, aquaculture, maker’s spaces, automobile parts manufacturing and retail stores in just the past decade. In contrast, nearly every growing city in Indiana pursues one very different opportunity: people.

The strategy of keeping and attracting people can promise no quick rewards. Much of the demographic outcomes for, say 2050, are already set by the composition of the current population, and can only be remedied by large-scale in-migration. A century ago, migration was caused by job losses in agriculture, and job gains in manufacturing and mining. Today, it is almost exclusively due to the spread of urban areas. For rural places this would seem daunting, but it need not be.

Small cities, towns and rural places can succeed in the modern economy. The Midwest will see significant population growth over the remainder of this century. Most of it will go to urban places, but a meaningful share of people do not wish to live downtown or in large suburbs. To unlock this potential growth, much of Indiana will have to see itself more clearly as part of broader regions, and focus on what they offer to residents.

Typically this will mean focusing, for a very long time, on the fundamental elements of local government: good schools, livable neighborhoods, safe and well-maintained streets. This isn’t a fad, instead it is precisely what Indiana was good at a century ago. For many places the benefits won’t happen quickly; real results may not occur for a generation or more. But, it is what Indiana must do. The only other option will feel a lot like falling off a roof.

Related Stories:
• Estimates show population decline in Kokomo, but other indicators display local growth






Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


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