Editor's note: Gregory Travis is down with the flu this week and asked that this column from March 6, 2006, be rerun. It's more relevant than ever, he says.
Indiana is the trucking "Crossroads of America" where, apparently, an economy based on little more than storing-and-forwarding stuff made elsewhere can be a healthy and sustainable economy. At least if you believe Morton Marcus.
A couple of weeks ago Marcus wrote of Hendricks County, located to Indianapolis' west, as a place booming with both the second-highest population and the second-highest median income growth in the state.
How did it get that way? By being a warehousing "Mecca," hard against the Indianapolis airport and ready-made to store-and-forward goods produced in one place to consumers located in another.
Marcus' article spun me up because I'm always on the lookout for diminished expectations masquerading as economic pollyannism. Whether it's in the form of ever-falling median personal incomes, increased income inequality, longer wage-hours per annum, or record personal, state, and national levels of debt that we live in, an age of diminished expectations is manifest everywhere.
"As it goes nationally, so it goes statewide."
Diminished in the sense that we assuage the existential pain of living in an eroding environment through sublimation. We mollify ourselves by the use of superlatives to describe stagnant or even declining conditions.
The president says "our economy is strong" (3/11/2006) even though real wages, adjusted for inflation, fell over the last 12 months (CNN/Money 2/22/2006). It's difficult to understand how an economy can be "strong" while delivering less.
As it goes nationally, so it goes statewide. Ever since the beginning of the rustbelt collapse in the 1970s, Indiana has been reeling, trying to figure out what it can bring to the national economic table. Ever since its industrial foundation necrotized from under-reinvestment, and then was simply packed up and shipped overseas, Indiana has struggled with what global value-add the state represents, other than being a landing pad for chain retail pods and soccer-mom suburbia populated by people selling inflated housing-bubble mortgages to one another.
That's not an economy.
It's not a storage shed, it's "logistics"
As Indiana searched for what it was that it could do, now that what it had been doing was gone, it naturally turned to its geography. We're kinda, sorta, in the middle of the country so maybe there is something that's intrinsically valuable about being kinda, sorta, in the middle.
"There's always a lot of talk about "free trade" and how, if only given enough time, it's going to make everything just freaking great for everyone, allways. "
It's obvious that, if you're in the middle, anyone or thing moving from one end to the other will travel through you. So that's good, now you just have to figure out how to make money off of the fact.
And the "Crossroads of America" meme was born. Indiana's economic future rests not on actually making things of value, not of creating things, but of extracting a little viggorish everytime something transits the state from somewhere to somewhere else.
Of course you can't describe the economic transformation in those kinds of stark terms. After all, this is the age of diminished expectations. You've got to wrap the turd in some bacon to jazz it up. We can't describe Indiana's economy as a forklift economy — i.e. little more than shuffling laundry baskets from Taiyuan factories onto pallets bound for Wal-Marts in Des Moines.
We describe Indiana's economy as a logistics economy. Get it? Logistics, which kind of sounds like "logical." A great superlative.
When trade, isn't
There's always a lot of talk about "free trade" and how, if only given enough time, it's going to make everything just freaking great for everyone, allways. The president says it's the way, the governor says its our future, heck even I love it.
But we're not engaging in free trade. We're engaging in a race to the bottom in which, for literally decades now, investment has been streaming out of our state and our nation, and it's being replaced by debt in the form of interest-only mortgages, foreign ownership of domestic assets (think toll road, ports, etc.), and a hollowed-out economy propped up by little more at this point than the fact that oil is still priced in dollars.
"We mollify ourselves by the use of superlatives to describe stagnant or even declining conditions."
That's because real trade occurs when you have something of tangible value that I want and I likewise have something you want. I give you a hammer, you give me a paintbrush in exchange.
But buying things with cash, as we're doing with virtually all of our goods (and increasingly services), from overseas isn't trade. That's just shopping. And to make it worse, we're shopping on credit.
Those Hendricks county warehouses, and the economy on which they're based, aren't storing and forwarding goods in two directions. For every pallet of Chinese hairdryers moving through Avon to Los Angeles there isn't a corresponding pallet of alternators moving from Bloomngton's west side to Bejing. The flow of goods is unidirectional.
As is the flow of money to pay for them. Goods in, money out. That's our new national economic model. Don't believe me? Check the trade deficit every quarter for the next decade.
We're building a state economy dependent on that flow, dependent on an accelerating and unsustainable premise — that we can continue to buy on credit, collateralized by sawdust, what we used to make ourselves.
And we tell ourselves that's a good thing. Because our expectations have been suitably diminished.
Gregory Travis can be reached at .