Indiana Growth Model The Daniels-Pence record is a lesson in conservative reform.
http://www.wsj.com/articles/indiana-growth-model-1469055008
President Obama visited Elkhart, Indiana, on June 1 to tout the state’s economic recovery, taking credit for its success and claiming that it represents the 2016 election’s basic policy choice. He’s right, but the economic lessons speak better of GOP Governor and vice presidential nominee Mike Pence and his predecessor Mitch Daniels than they do Mr. Obama’s policies.
Mr. Obama touted his auto bailout, which he said rescued the city’s recreational vehicle industry that in 2009 was responsible in some way for about 70% of Elkhart’s employment. The cyclical RV industry has recovered along with the economy, but then so has the rest of the state. The most interesting statistic is that only about 60% of Elkhart’s jobs are still tied to RV sales as the economy has diversified.
All states have seen declines in the jobless rate, and Indiana’s has fallen to 5% in May from 8.4% in 2013 when Mr. Pence became Governor. The Indiana difference is that the rate has fallen even as the labor force has increased by nearly 187,000. Many states have seen their jobless rates fall in part because so many people have left the labor force, driving down the national labor participation rate to lows not seen since the 1970s. The Illinois workforce has grown by only about 71,000 in the same period, though it is roughly twice as large. Indiana is adding jobs fast enough that people are rejoining the workforce.
The Indiana turnaround began under Mr. Daniels, who took office in 2004 after 16 years of Democratic governors. His command to state employees was “we are here to raise the disposable income of Hoosiers.”
Mr. Daniels inherited a budget mess but eight years later Indiana was a rare state with a triple-A credit rating. He toyed briefly with raising the top personal income-tax rate, which we criticized at the time and was stopped by the legislature. He proceeded to cut the state corporate tax rate to 6.5% from 8.5%. He also took a big political risk by contracting with a private company to operate the Indiana toll road for $3.8 billion. CONTINUE AT SITE
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