The Midwesterner on Midwestern States as Economic Laboratories

Richard Longworth, the Midwesterner, has a good post looking at the Midwestern states as laboratories for various economic theories. He recognizes any number of caveats to interpreting the results, but notes that Minnesota is having a better time of things economically with its approach when compared to places like Wisconsin, Michigan, and Indiana. A significant difference between Minnesota and these other Midwestern states is that Minnesotans have been more inclined to spend on education and public infrastructure.

As we noted above, the divergence between incomes in Wisconsin and Minnesota began some 50 years ago. More to the point, most Midwestern states – Michigan, Wisconsin and Indiana especially – have economies based on heavy industry. Industry’s decline in the last half century, culminating in the recession, has hit these states harder than it did Minnesota, which has less of a heavy industry legacy to overcome.

What can be said is that Walker hasn’t made things any better. Daniels made things demonstrably worse. With Drayton, so far so good.

Economists like Jacobs, Johnston and Glazer are on stronger ground when they argue that governors such as Drayton are preparing their states to compete in the global economy by spending in crucial areas such as education and infrastructure. Walker and Daniels, by focusing more on budget-cutting than investment, leave their states with no weapons to fight these global economic wars.

This post attracted Aaron Renn, the Urbanophile, to the comments. He mentions:

Race is the elephant in the room. It’s easy to look good on these metrics in a bifurcated economy when you’ve got lots of privileged white people, especially when more educated and concentrated in an urban area like Minnesota. Give those states similar racial makeups and population distributions, and see how they fare.

Dr. Longworth responded that racial composition and income are pretty much all over the map in terms of correlation. For example, Maryland is first in per capita income and fourth as a percentage of black population. (He goes through a number of other states.)

Meanwhile, I had posted a link to the Midwesterner on my Facebook wall which drew the attention of a professor friend of mine who has professional and person experience with Minnesota, Indiana, Michigan, and Wisconsin. His sense is that Minnesota has been more successful than the others in developing a knowledge based economy; noting “a much stronger appreciation of education and knowledge in Minnesota than . . . in Indiana.”

I can’t speak to Minnesota, but there is a distinct streak of anti-intellectualism in Indiana. Our people purport to prefer “common sense” to “elitism”; the problem being that common sense is not reliably sensible. Certainly, when I was a kid in eastern Indiana, a bunch of fancy book learning didn’t inspire the admiration of one’s peers.

In any event, the original post is well worth a read.


  1. gizmomathboy says

    Yeah, it is a great post.

    Minnesota is one of the few states I would move to. It seems to have a decent balance of progressivism and conservatism.

  2. Paddy says

    Minnesota is ahead of the game because that is where Lake Wobegon (where all the women are strong, all the men are good looking, and all the children are above average) is located.

  3. Stuart says

    The post and article are really interesting, and your friend’s observations coupled with the article kind of spell doom for Indiana. When a population doesn’t believe that education is all that important, they are more likely to reject the facts and believe the myths which leads to destructive public policy and bad results. And as conditions worsen, they tend to hold on to those ideas with a death grip. Practically speaking, such behavior turns things upside down, as in rising vs. falling unemployment and falling vs. rising per personal income. Furthermore, the legislature seems to be actively encouraging teachers to practice in surrounding states. In questioning how bad things need to get before before people decide to change, I looked at Mississippi and other states, where our aspirations seem to be. The prospects don’t look good. The poor just seem to get poorer.

  4. says

    Whenever I look at my Illinois tax bill and think it would be great to move back to Indiana, I look at how the state government (and the citizenry that elected it) is running things, and I start thinking twice. What people like Pence and Daniels don’t get is that when you try to be a bottom-feeder (both in pushing down wages and allowing environmental degradation that literally makes I-65 smell like shit from the Winamac exit to past Remington) as a means to economic development, you can never actually reach bottom. And that’s also not a strategy for attracting and retaining young talent that could birth the businesses that could help the state get back on track.

    The solution isn’t to throw public money at everything, but the solution also is not to take public money away from everything. The trouble with so-called deficit hawks like Pence and Daniels is they know the cost of everything and the value of nothing — sometimes, spending is an investment, not just money taken out of the wallet. Then again, if you’re one of their political buddies, you can get whatever you need.

  5. says

    Exhoosier: I was up at my dad’s (mom passed away in January) place for Thanksgiving and he was telling (he’s 92) us about the old St Louis University arena that was built by mafia donations. He knew Ed Macauley who was the AP player of the year in 1949 and used to see the guy working out on the basketball court when he was playing hand ball above the basketball court. The whole place was pretty much paid for by the mob. Now new arenas are paid for by the tax payer and the politicians dole out the contract to their buddies who line their pockets with donations. My dad laughed when I complained about the goings on in Indy and Indiana and said it’s the way of the world and get on with life.
    So this will be my last post about politics. It will be hard because I love it, but I just started a blog over the Thanksgiving holiday. No politics, instead sports, investing, computing , theater and books and whatever comes into my head. It’s time to talk about what I am good at and love. I already have 4 post up and I can think of about 200 or more other things to say. I don’t care if it is just friends and family who read it I am having fun! Good bye Doug and have fun! If anyone is interested about the game changer stock DDD or the what I think is the best Musical ever made come on over to my blog! I am taking my dad’s advice have fun in life! Damn it took me 56 years to figure out that is what my dad has been doing for 92 years !

  6. Pila says

    The entire state of Minnesota is an urban area filled with educated and privileged white people? ;-) I think that perhaps Mr. Renn—who has one of the more interesting Indiana blogs out there— is letting his favorable views toward Mitch Daniels and his Indianapolis focus cloud his thinking a bit.

    Maybe I’m wrong, as I haven’t been to Minnesota in a long, long time, but I think it is similar to Indiana in this respect: once you get outside the capital city metroplex, it is a largely—but not exclusively—rural state. Indiana is not Indianapolis. Minnesota is not Minneapolis/St. Paul.

    Hoosiers of any race who are educated and financially stable probably were not hurt by the governance of Mitch Daniels. The brunt of Daniels’ policies hit public employees, the elderly, the working class to poor, the disabled, the mentally ill, and children—particularly children in dysfunctional families. I felt that Daniels and his minions were deliberately going after the most vulnerable populations. Anyone not in a vulnerable population or who did not work with vulnerable populations did not see the destruction of eight years of the Daniels administration. I think it will be decades before Indiana recovers from what That Man and his lackeys did to the state—if we recover at all.

  7. Pila says

    “Certainly, when I was a kid in eastern Indiana, a bunch of fancy book learning didn’t inspire the admiration of one’s peers.” Ha-ha. That was true then and is still true now. I’ve learned not to talk about my interests and politics around most people.

  8. Stuart says

    Pila- They’re nice people as long as you don’t bring up the problems of injustice and suffering among they people they don’t know.

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