The Midwesterner: Blogging the Global Midwest

Debunking St. Mitch

Mitch Daniels will soon be leaving the Indiana governor's office to become president of Purdue University. He'll leave Indianapolis with praise from budget-balancers in other states, the admiration of pundits and a wistful regard from the Republican Party, which hoped that he could have been their presidential nominee this year. (He refused, for personal reasons.)

It's an odd chorus of huzzahs for a governor who, if he hasn't impoverished his state, has helped impoverish its residents. All statistics, including those from Daniels' own government, show that per capita income in Indiana has steadily declined during his eight years as governor. When he took over, Indiana ranked 33rd among the 50 states in per capita income: the latest figures, from 2010, rank it 42nd, with no reason to think things have improved since then.

If Indiana is becoming the Mississippi of the Midwest, the Daniels years helped make this happen.

FDI: Tapping the Global Market

The Midwest, like most of the country, has never really got serious about attracting investment from other countries.

There's plenty of this investment, of course: from oil companies to banks to automakers, a lot of non-American logos adorn Midwestern businesses. But compared to other countries, the United States has always focused on its vast internal market for both sales and investment, and the Midwest is no exception. If foreigners want to put their money here, that's fine, but we've never worked very hard to get it.

In the global economy, this is a luxury we can no longer afford. That's the message of a new and valuable report just issued by The Chicago Council on Global Affairs, and downloadable from our website. The report, "Foreign Direct Investment: Globalizing Chicago's Economic Development Plans," focuses on Chicago and its seven-county region. But there's food for thought for other Midwestern cities, their states -- and the entire Midwestern region.

Chicago Regional Unity? Milwaukee Takes The Lead

We've written here before about the report earlier this year from the Organization for Economic Cooperation and Development, which urged closer cooperation between the balkanized towns and cities in the Chicago economic area, around the south end of Lake Michigan.

Now, one of those cities, Milwaukee, has taken the lead. But Chicago also is paying attention. Good things might be about to happen.

Milwaukee and Chicago: One City or Two?

Earlier this spring, the Paris-based Organization for Economic Cooperation and Development issued what it called a "territorial review" on the Chicago economic region, stretching from Milwaukee through northwest Indiana. Basically, the OECD said this region was much less than the sum of its parts, and needed some real cooperation, across state lines, to achieve a vibrant economy in the age of globalization.

At the time, I wrote about this report and expressed the hope that somebody in the region would jump on these ideas and try to turn them into reality. It looks now like this may be happening.

A Revival in Middletown

Muncie, Indiana, is an interesting place, for both historical and modern reasons. It became famous in the 1920s as the subject of Middletown, a classic sociological study of a typical American industrial city. Today, it's too often held up as the example of a typical industrial city when the industry goes away.

Now, Muncie is trying to face the future and change its luck. I was there recently to take part in programs centered on the Muncie Action Plan, a long (51 pages) and detailed (47 proposed actions) drawn up over the past two years by many (2,000 people) of Muncie's citizens, all aimed at revitalizing their town.

This is important, for symbolic and other reasons. Muncie really is typical of tattered old Midwestern industrial cities. It has 70,000 people. It's home to a big university, Ball State, that like too many Midwestern colleges and universities, has never played the role in town that it should. It gave birth to some major corporations -- Ball Glass and Borg-Warner, among others. It has lost these corporations, plus the civic leadership they provided, plus the jobs they supported, plus the prosperity they generated and, especially, plus a whole generation of young people who would have worked there and are either unemployed now or long gone to other places with jobs.

In other words, if Muncie can fight back from its post-industrial doldrums, this gives more hope to many other Midwestern cities that are trying to do the same.

A New Map for the Chicago Region

Any astronaut looking down from space at night would spot a solid band of bright light wrapped around the southern end of Lake Michigan. The lights go on somewhere north of Milwaukee, stay on as the band moves south through Kenosha and Racine and turn into the glare of Chicago before sweeping east across northern Indiana, finally fading into the blueberry belt of southwestern Michigan.

What our astronaut is seeing is a megalopolis, a super-city, a midcontinental metro -- a region. From orbit, it looks like one big urban area. He can't see any state lines or town lines, which makes sense, because it's hard to see them even from ground level.

But they're there. Oh boy, are they there, and they keep this Chicago region from acting like the one big city it really is. Down here on the ground, it's not one big region but three states, 21 counties, dozens of towns and a couple thousand townships, school districts and other jurisdictions and taxing bodies, all out for themselves, with little regard for the other state, town or jurisdiction next door.

Obviously, this Chicago region is much less than the sum of its parts. This is the conclusion of anyone who's tried to get these many parts to work together and, more immediately, of a major new study by the very authoritative Paris-based economic body, the Organization for Economic Cooperation and Development.

What Is the Midwest? Where Is it?

Writing about the Midwest presents a problem unknown to those who write about, say, the South or New England. The problem is that no one can define, with any precision, just what the Midwest is.

I made a stab at it in my book on the Midwest, Caught in the Middle: America's Heartland in the Age of Globalism. I based my definition on what I could see and sense when I was doing my research. So I've been charmed, not to say gratified, to read a book that says that the Midwest exists as it is today because of the four great glaciers that rolled across the region, starting about a million years ago, and that this glacial expanse pretty much matches my impressionistic definition.

Geology, it seems, is destiny.

In my book, I defined the Midwest mostly as the eight states of the Upper Midwest -- Minnesota, Wisconsin, Iowa, Michigan, Missouri, Illinois, Indiana, and Ohio. But I made a point of cutting across state lines when it seemed appropriate, if only to stress how little these artificial political boundaries have to do with the reality of Midwestern life.

Drifting in the Driftless Area

I spent the last week in Galena, a gem of an old Victorian town, nestled in the hills and forests of the so-called Driftless Area, in northeast Illinois near the Mississippi River Valley. I came away thinking how this area could be more than the beautiful but generally depressed region it is now.

Galena itself seems to be doing fine. It is a tourism and second-home mecca, packed with good restaurants and refugees from Chicago. But the Driftless Area itself is divided between four states and some 25 to 35 counties, depending on where you draw the boundaries. None of these jurisdictions -- not the states nor the counties -- has been able to work with the others to leverage the region's scenic potential and combat the economic distress that, like the scenery, they all share.

How Not To Build an Economy

You can bet on it.

Any time a Midwestern company announces it wants to (1) move, (2) stay, (3) grow, (4) shrink, (5) hire, (6) fire, (7) come or (8) go, you just know that some government or governments will throw money at it to persuade it to do what it was going to do anyway.

As we've written in earlier posts, Midwestern states are doing this more and more in a desperate attempt to hold on to investment and jobs. Cities do it, too, none more vigorously than Chicago, which has just done it again, giving $3.1 million to a steel company which may or may not need the money.

States on the Ropes

 We've written in past postings about the inability of Midwestern state governments to meet the challenges of a globalizing economy. For years, these state governments have been too small, too parochial, too dominated by rural interests to respond to the real needs of a global and urbanizing society.

Now, they're just too broke.

This is a national problem, not just a Midwestern one. But the Midwest, which depended for so long on a now vanished industrial basis, is perhaps deeper in the hole than other states and needs more desperately to find solutions, not only to recover from the current recession but to restructure its entire economy.