Brian Kanowsky

I’m thinking of starting a futures fund betting against Mitch Daniels’ predictions.

You see, Mitch Daniels has a problem with predictions. Given his famous “misunderestimations” of the cost of the Iraq War, the trends of health care costs, and the benefits of his FSSA privatization scheme, you’d think he’d give it up. But he just can’t help himself.

Back in 2008, when it became apparent that GM and Chrysler would become victims of the economic collapse, taking more than a million jobs with them, Daniels confidently predicted that efforts to save them would fail:

“Let’s give Congress a chance, but there’s nothing in recent history that suggests they have an answer for this,” Daniels said. “The only thing we know for certain is the way they’ve been doing business does not work and throwing taxpayer dollars after it won’t make it work.” (emphasis added)

And he was wrong, as President Obama told workers at a GM plant in Detroit yesterday:

Now, that was a tough decision and let’s face it, a lot of people were skeptical.  I don’t know if you all remember, but I remember how last year there were a whole bunch of folks who said, well, that makes no sense.  There’s the “just say no” crowd in Washington — they’re still saying no — who basically said, well, this is a terrible investment.  We should just let the market take its course, let GM, let Chrysler go bankrupt.  So there was a lot of skepticism out there. […]

And now here we are a year later.  And a year later, GM and Chrysler, along with Ford, are all posting a profit. The U.S. auto industry has hired 55,000 workers, the most job growth in a decade. And not only that, but you’re producing the cars of the future right here at this plant, producing cars that are going to reduce our dependence on foreign oil.  This car right here doesn’t need a sip of gasoline for 40 miles and then keeps on going after that. (Full transcript here)

While speaking to a crowd of workers at a Chrysler plant earlier in the day, Obama challenged critics of the plan to come and see the good that its done.

I wish they were standing here today. I wish they could see what I’m seeing in this plant and talk to the workers who are here taking pride in building a world-class vehicle.  I don’t think they’d be willing to look you in the eye and say that you were a bad investment.  They might just come around if they were standing here and admit that by standing by a great American industry and the good people who work for it, that we did the right thing. (Full transcript here)

And you don’t have to take Obama’s word for it. Washington Post business columnist Steven Pearlstein wrote of the auto industry plan’s “unqualified success”:

Perhaps none was more controversial than the decision to rescue Chrysler and General Motors, using $86 billion in taxpayer funds and an expedited bankruptcy process that wiped out shareholders, brought in new executives and directors, forced creditors to take a financial haircut, closed dealerships and factories and imposed painful cuts in wages and benefits on unionized workers. It was an extraordinary and heavy-handed government intervention into the market economy that left the Treasury owning a majority of both companies. […]

A year later, the auto bailout is an unqualified success. The government used its leverage to force the companies to make the painful changes they should have made years before, and then backed off and let the companies run themselves without any noticeable interference.

The results, which President Obama will tout on a visit to Michigan on Friday: For the first time since 2004, GM and Chrysler, along with Ford, all reported operating profits in their U.S. businesses last quarter. The domestic auto industry added 55,000 jobs last year, ending a decade-long string of declines. Auto sector exports are up 57 percent so far this year and, thanks largely to new government regulations, the industry is moving quickly to introduce more fuel-efficient vehicles. Most surprising of all, GM and Chrysler have already repaid more than $8 billion in government loans, while GM is preparing for an initial stock offering later this year that would allow the government to recoup most, if not all, of its investment.

And Ezra Klein posted this graph, illustrating the point more succinctly:

You can see the White House’s full report here, but you can really get a good picture of the scope of the investment by looking at the interactive map. There’s a nice cluster of dots trailing down from Lake Michigan, each representing a plant expansion, electrification, “supertruck”, or green vehicle project – you can hardly see an empty spot in the state of Indiana.

Last night, the House failed to pass the James Zadroga 9/11 Health and Compensation Act.  The bill needed a 2/3 majority to pass, but the final vote was 255-159. Indiana’s Congressional delegation split their votes along party lines: Carson, Donnelly, Ellsworth, Hill, and Visclosky voted for the bill, while Pence, Burton, and Buyer voted against it.

This piece of legislation was named after NYPD detective & 9/11 responder James Zadroga, who died at the age of 34 after developing a disease attributed to inhaling toxic chemicals. Zadroga dedicated 450 hours to helping with rescue and recovery efforts and Ground Zero. This bill would have provided medical care to responders and nearby residents who continue to suffer the after-effects of the terrorist attack.

Today, the GOP wants to talk about arcane rules of procedure or NY Rep. Anthony Weiner’s (justifiably) angry speech on the House floor. But that’s just because they don’t want to talk about this bill or their votes.

While the GOP, including our Hoosier delegation, has never hesitated to call these responders heroes in the past, this vote revealed how little they actually care about the sacrifice of those Americans. When it’s cheap to praise them, Reps. Pence, Burton, and Buyer are there. But when it comes to doing the right thing and standing by our heroes, they’re nowhere to be found.

The GOP offered a specific script to its members for opposing this bill, calling it a “new entitlement program,” a “tax increase”, and a special giveaway to “trial lawyers.” The one problem? The bill was entirely paid for by closing a tax loophole on foreign companies doing business in the US.

Steve Buyer serves on the committee that initially heard the bill, and he followed the GOP script on this bill to perfection. He offered a meaningless, redundant amendment to make doubly sure that no undocumented immigrants would be eligible to receive money under the fund – something already explicit in the text of the bill. Before voting against the bill in committee (PDF), Buyer criticized the bill as costing too much and being a parochial giveaway, saying:

"If we want to talk about New York City and Congress only acting for the benefit of New York City, that’s what this bill is about." (Source: NY Daily News)

I think it’s clear from the GOP’s vote what this what about: protecting tax loopholes for foreign companies instead of protecting the heroic Americans who responded to the 9/11 attacks.

Yesterday, I had the pleasure of talking with Purdue professor and 4th District candidate David Sanders. He was out greeting voters at the Monroe County Fair after spending the day going door to door – something he’s done in all 12 of the counties in the 4th. Sanders was also encouraging the people of Monroe County to come and see the debate between the Congressional candidates in Ellettsville on August 10. But, he warned voters, GOP nominee Todd Rokita might not show up.

As Masson noted on his blog the other day, Rokita hasn’t responded to the debate invitations – either the one planned for Ellettsville on August 10 or the one in Greenwood on August 24.

David Sanders initially issued the debate challenge by sending letters to Todd Rokita and Libertarian candidate John Duncan on June 7th. Duncan quickly agreed, but more than 50 days later, Rokita is still noncommittal. While seeming to admit that his candidate has no campaign conflicts on those dates, his campaign spokesperson, Mike Sullivan, says Rokita wants someone else to arrange the debates. Sullivan also dismissed Sanders’ idea of having more debates:

“I don’t even think the (U.S.) Senate or statewide races do nine or 10 debates,” Sullivan said. “That seems like an excessive number for a congressional race.”

Sanders told me that he spoke to Rokita early in the year, and Rokita said that as the chief election officer for the state, he understood the importance of & need for debates.  But  Rokita’s dissembling on the actual details of debates shows that he’s simply not committed to the ideals he claims on his website – such as being “committed to ensuring an open, collaborative approach to government” and choosing “principle over politics”.

UPDATE: Indiana Public Media reports that Rokita will, in fact, skip the Ellettsville debate on August 10.

The beginning of July is always a busy time in Bloomington, but during my time here it’s also been a sadly violent time of year. Five years ago in July, someone threw a makeshift firebomb through the window of the Islamic Center here in Bloomington. (The mosque is located only a block or so away from where Won-Joon Yoon was murdered by Benjamin Smith during his racially-motivated killing spree in July of 1999.) The local media did some good initial reporting on the story, and the story was picked up nationally.

But five years later, those responsible for the cowardly action have not been caught.

And five years later, the leaders of the Republican party are openly stoking religious fears, calling on their acolytes to “refudiate” the building of a new community center in Manhattan because it would include a mosque.

Five years later, the Lieutenant Governor of Tennessee thinks it’s a winning campaign strategy to oppose a new, larger Islamic center in Murfreesboro, and to dismiss Islam as a “cult” that might not deserve the same protections under the First Amendment.

Five years later, some Christians are making thinly-veiled threats about a proposed mosque in Southern California.

Five years later, Muslims across America are finding it harder to find a place to worship.

But in every one of these communities, progressive-minded people of all faiths are working to make things better. They’re supporting the building of the mosque in Murfreesboro. They’re supporting the Cordoba Center in Manhattan. They’re making their voices heard, and they can make an impact.

When I was looking into the mosque fire, I was able to find an angle that had gone unmentioned – as I wrote for the local publication CultureWeek:

In the early morning hours of Saturday, July 9th, a member of the Islamic Center of Bloomington was walking through the facility, carrying a jug of water for wudu — the ritual washing Muslims perform before prayer.

Around 2 a.m., the man — who asked to remain anonymous — discovered and extinguished a small fire in the kitchen with the jug of water. Two hours later, other members of the mosque arriving for dawn prayer found a burned copy of the Quran outside the building. They called the police and notified the leadership of the center. Within hours, investigators determined that someone had broken a window and set the fire deliberately. The FBI is investigating the incident as a hate crime.

Just two days earlier, the Washington, D.C.-based Council on American-Islamic Relations issued a security warning in response to threats it received after the London bombings. The mosque had been the target of vandalism in the past, and some concerns were voiced, according to Nathan Ainslie, President of the Islamic Center’s executive committee. He said that adding extra lighting around the center had been discussed for several months, but no action had been taken.

By noon on Saturday, members of the mosque were ready for action. They began to discuss a response to the attack.

“We came to the conclusion as a community that the best response would be to not respond with fear or anger, but to invite everyone in,” explained Ainslie.

Other Bloomington faith communities felt the need to respond as well. Reverend Bill Breeden of the Unitarian Universalist Church heard about the event early Saturday morning, and immediately made plans to have lunch with members of the mosque the next day. He asked if his congregation could walk to the Islamic Center the next week to display their solidarity with the members of the mosque.

With Breeden’s support, the walk and open house at the Islamic Center drew more than three hundred people on a very hot summer day.

Ainslie viewed the response as a success. “It showed that we aren’t mistaken in our belief that we’re part of the Bloomington community.”

“It was absolutely a success,” agreed Breeden, who attributed the high turnout to the mosque community’s display of hospitality.

The development of interfaith relationships, according to Rabbi Mira Wasserman of Congregation Beth Shalom, was an integral part of the event.

When arsonists attacked Beth Shalom in 1983, the response of neighboring faith communities helped assure the Jewish community that they were not alone. An informal network of connections helped the congregation to stay open as they were rebuilding. Since that time, formal connections have developed in addition to the friendships that seem to naturally occur among faith leaders.

Rabbi Wasserman suggested that the response to the attack on the Islamic Center reflects the maturing of the community and of the relationships between faith groups. She said that interfaith dialogue is supported by informal friendships, but sometimes needs some structured help to keep it alive. Now, she said, a new group has come along to help.

About six months ago, Bloomington Hospital chaplain Reverend John VanderZee initiated a movement to formalize and cement those relations, and Monroe County Religious Leaders was founded. Members meet once a month to discuss key issues affecting the community.

“Hopefully now we have the framework for cooperation,” Rabbi Wasserman said.

Reverend Breeden spread the word of the response to the attacks on the Islamic Center through Monroe County Religious Leaders, whose members are in constant contact. Many faith leaders in Bloomington are realistically hopeful for the future of interfaith relations, bolstered by the generous display of support for the mosque.

“[The attackers] obviously didn’t realize that we aren’t isolated, and that we aren’t easily frightened off,” said Ainslie, adding that interfaith events can help foster understanding and form friendships. “Forming the human connections is vital toward responding to those points of view.”

Reverend Breeden offered a simpler reason why interfaith cooperation is the solution — “Love is stronger than hate.”

I pray that over the next five years, Reverend Breeden will be proven correct.

I was disappointed to see the usually-sharp Ed Kilgore fall into the trap of buying Mitch Daniels’ spin – in a recent piece on Mitch Daniels’ presidential prospects, Kilgore wrote that “his state’s positive fiscal record stands out sharply against a national landscape of state fiscal disaster.” Ed, if you believe that, I think Mitch has a bargain-priced $50 billion invasion of Iraq to sell you.

Far from being the “island of growth” that Mitch Daniels likes to pretend we are, Indiana is struggling just as much as the rest of the region. And it’s not just Daniels’ phony jobs announcements that are the problem – Indiana has a real problem with unemployment. And I don’t see any hope of fixing that when the party that controls the state executive branch and the state Senate won’t acknowledge that there’s a problem.

Indiana’s unemployment rate over the last decade:

Source: BLS.gov 

A cursory glance at Indiana’s unemployment rate gives you the outlines – 10% unemployment, using the standard U-3 measure. When you look at the bigger picture, it gets even worse. Using the broadest measure – U-6, which includes “marginally attached” workers and those working part-time who would rather be working full-time – more than 18% of Hoosiers can’t find a real job. That means Indiana is worse off than our neighbors in Illinois, Ohio, and Kentucky.

Just yesterday, the Indianapolis Star ran a piece on how Indiana’s job picture is worse than our neighbors. A recent study by the Brookings Institution’s Hamilton Project shows that Indiana ranks 6th-worst in the nation when they measure declines in employment from November 2007 to May 2010. It’s simply unacceptable for the Governor of the state that ranks 44th in employment growth to be celebrating our nonexistent jobs. The objective reality is that Indiana’s employment growth trails Michigan, Illinois, Ohio, and Kentucky (and almost every other state in the US).

It’s easy for Mitch to spin Indiana’s unemployment when our neighbors to the north in Michigan are facing the worst unemployment rate in the nation. But he shouldn’t get a free pass just because Hoosiers are marginally better off than the hardest-hit state.

But what about Indiana’s budget? It’s often asserted that Indiana has a “positive” budget and that we have a surplus. And that’s true – if you choose to selectively leave out a large chunk of Indiana’s finances.

Indiana is one of 26 states who are in debt to the federal government because they can’t afford to pay out their unemployment insurance benefits, according to ProPublica. Indiana’s Unemployment Insurance Trust Fund has been insolvent since at least 2008, and we currently owe almost $2 billion to the federal government for the state’s share of UI benefits. Just a couple of months ago, at Mitch Daniels’ urging, the state postponed a law that would raise UI rates to start paying off that debt.

March 2010 marked 17 straight months of Indiana’s revenues falling well short of projections. In April, we learned that:

Sales tax collections, though higher than April 2009, are lower than FY 2008, FY 2007 and even FY 2006 levels. Year to date sales tax collections are 5% below prior year. If the -5% trend continues for the full fiscal year it will be the worst performance in state history, exceeding FY 2009’s record of -4.7%. The budget as passed projected sales tax collections equal to prior year. April individual income tax collections are the lowest in five years. Year to date income tax collections are 11% below prior year—on top of an 11% decline for FY 2009. The budget as passed projected a 1% decline in individual income tax collections for FY 2010. (Source: Indiana State Budget Agency)

May’s monthly revenue report showed that “revenue collections through eleven months of the current state fiscal year are now $1.032 billion or 9% below the budget passed by the General Assembly.”

And too much of our state’s budget remains a mystery, even to those in charge of voting on it. When state lawmakers requested details on Mitch Daniels’ budget cuts, he released 476 pages of news clippings, but none of the actual information.

All this shouldn’t surprise Hoosiers. We elected – twice! – a man who oversaw record budget deficits when he ran the Office of Management & Budget for George W. Bush. We elected a man who rushed out to denounce critics in his own party by promising the Iraq War would cost only $50-60 billion. We elected a man who predicted that health care costs were done rising in 1994, so there was no need to address the issue. Given that record, it’s hard to believe anyone would buy Mitch’s spin about the Indiana economy.