Best of the worst is not good enough

2013-09-15T00:00:00Z Best of the worst is not good enoughMorton Marcus Times Columnist
September 15, 2013 12:00 am  • 

Are Hoosiers satisfied to be the best of the worst? Is mediocrity our highest level of aspiration? I like to believe the answer to those questions is NO, but I have my doubts.

This round of questions is brought up by the latest estimates of per capita gross domestic product for the individual states by the federal Bureau of Economic Analysis.

State gross domestic product is the market value of all goods and services produced within the boundaries of the state over a given period of time. The latest data are for 2012. Private firms, public agencies and nonprofit organizations are all included. It is the states’ counterpart to the more familiar national GDP figures.

Per capita GDP indicates the total an economy is producing relative to the population of the nation or state. That population includes all persons -- the young and the old, the infirm and the incarcerated. Per capita GDP will vary with the composition of the population; as such, it is a poor measure of worker productivity.

However, the number does give us a measure of output compared to the population -- the consumption units -- in a nation or state. It approximates the potential for the population's well-being.

What do the data tell us about Indiana? In 1997, the Hoosier state ranked 31st among the 50 states in per capita GDP. In 2012, we again ranked 31st. No change.

You can praise our leaders for the relative stability of the Indiana economy. Or you can condemn them for not doing enough to improve our relative standing.

In 1997, we saw Indiana with a per capita GDP 7.9 percent below the national figure, while in 2012 we stood 8.7 percent below the nation. That is not a catastrophic decline, but it is movement in the wrong direction.

Between ’97 and ’12, Indiana ranked 26th in its rate of growth (average annual rate of 1.07 percent) or just below the national average rate of 1.13 percent. This put us at the top of the bottom half of all the states -- a solid expression of mediocrity.

Where Indiana did excel was compared to the other four Great Lakes states -- Ohio, Michigan, Illinois and Wisconsin. Our rate of growth was the best experienced by any of these neighboring competitive states.

But all five states together had the worst growth rate of any region in the nation. To lead the worst is not a great honor or distinction.

Do Indiana’s leaders in business and government believe this is the best we can do? Fifteen years covers a strong start at the end of the century, followed by two recessions and two recoveries. During these years we have had much talk about Indiana’s innovative programs and expensive efforts to strengthen existing firms and to attract new businesses.

Perhaps we need to re-examine what we believe is innovative and just how we do spend our money.


Opinions are solely the writer's. Morton Marcus is an economist, author and speaker formerly at the Kelley School of Business, Indiana University. He can be reached at

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