V19, N43 Thursday, July. 24, 2014

No midterm wave developing to date thing to ramp Obama unpopularity up turnout.” offset by GOP brand In past wave elections problems; status quo – the 1966 and 2006 election for Indiana blowbacks to the Vietnam By BRIAN A. HOWEY and Iraq wars, INDIANAPOLIS – The 2014 the Repub- election cycle conventional wis- lican U.S. dom went something like this: With House take- Obamacare so utterly unpopular, with overs of 1994 President Obama’s approval numbers and 2010, and mired in the low 40th percentile, the post-Wa- and the historical second mid-term tergate Demo- quicksand for the president’s party cratic gains in creating a conspicuous obstacle down ballot, this had the 1974 – wave years generally began to set up in July. The potential to be a “wave election.” operatives closest to the ground would begin sounding the For Hoosiers expecting waves, I would recom- alarms or calling out the volunteers. In the 1980 Reagan mend the Michigan City lighthouse as a cold front passes Revolution, the decisive wave didn’t really take shape until through. As far as the November ballot is concerned, late October. this has the look and feel of a status quo election both in The area for the greatest potential change, forging Indiana and across the nation. “I don’t think this is much a Republican majority in the U.S. Senate, is now a dubi- of a wave year,” said Mike Gentry, who heads the Indiana House Republican Campaign Committee. “There is nothing Continued on page 4 driving interest at the top of the ticket. We don’t have any- Putin and Flight 17 By BRIAN A. HOWEY BLOOMINGTON – Any illusions I had about the progressive nature of the Putin regime quickly dissipated when I returned to my Moscow Grand Marriott room in August 2007. Upon opening the door, I was greeted with the spectacle of my papers and “We don’t have an Ethics note pads strewn about the room. It was clear that an FSB Commission in Northwest agent stopped in to get a better Indiana. We have the FBI.” handle on who this American journalist might actually be. - Hammond Mayor Tom There had been a peace- ful transfer of power between McDermott Jr., reacting President Boris Yeltsin to Putin to the $5,000 fine former seven years prior, capping the decade following the collapse Supt. Tony Bennett of the Soviet Union that few received on ethics breach predicted. Putin had won a sub- Page 2

sequent election, though he controlled metal, wires, engines and seats. Bod- state media and international observ- ies lying in the field struck strange, ers had determined it rigged. Russian unnatural shapes in the tall grasses, people could now travel more freely to many naked but for their shoes. Some the West, and Russian hockey players were nestled together among piles populated the NHL without having to of open suitcases, including a man go through the rigors of defection. in a mint-colored T-shirt lying near As a congressional delega- a woman in torn jeans whose right tion headed by Sen. Richard Lugar arm was thrown up over her head as and former Sen. Sam Nunn journeyed if she were trying to protect herself. is a non-partisan newslet- across Moscow’s outer highway belts, Others lay alone, like the tiny girl, ter based in Indianapolis and a back-of-the-bus discussion involving probably no older than 3, dressed in Nashville, Ind. It was founded the New York Times’ C.J. Chivers and a red T-shirt without pants. The sight in 1994 in Fort Wayne. the Washington Post’s David Hoffman was overwhelming, even to rebels, speculated on whether Putin would who stood in stunned groups trying to It is published by relinquish power after his second term comprehend.” WWWHowey Media, LLC concluded a year later. There was Included in this jarring scene 405 Massachusetts Ave., no consensus and little speculation were Indiana University graduate stu- Suite 300 Indianapolis, IN that Putin would elevate 46204 Dmitri Medvedev to the presidency and spend the next four years as prime Brian A. Howey, Publisher minister before retaking Mark Schoeff Jr., Washington ultimate power in 2012 Jack E. Howey, Editor from behind his facade. Mary Lou Howey, Editor The Soviet econ- omy morphed into an Maureen Hayden, Statehouse oligarch-controlled quasi Matthew Butler, Daily Wire capitalistic system. The gulags no longer existed, Subscriptions but as our delegation bus passed dent and rower Karlijn Keijzer and 297 HPI, HPI Daily Wire $599 Lubyanka, the brutal Soviet legacy other souls (as well as 80 children and protruded and nudged the realm of infants), including former Kankakee HPI Weekly, $350 the past and the possible. Valley HS exchange student Laurens Ray Volpe, Account Manager Since last Thursday, when Van Der Graaff, her travel compan- 317.602.3620 it appears that Ukrainian separatists ion. In the following days, viewers email: [email protected] working with the Russian military shot on worldwide CNN, Al-Jazeera, the down Malaysian Air Flight 17 killing BBC and the American networks saw 298 people, the entire civilized world imagery of rebels picking through the Contact HPI now has a greater appreciation of the debris field, removing missile shards, www.howeypolitics.com nature of President Vladimir Putin. On as well as wedding rings and other [email protected] the Sunday morning talk shows, U.S. personal effects. Crumpled bodies Howey’s Cabin: 812.988.6520 Rep. Peter King described him as a were stacked in the summer heat Howey’s cell: 317.506.0883 “Mafia guy” and on MSNBC’s Morning along railroad tracks, and then loaded Joe, the term “thug” was common- into refrigerated rail cars. Dutch foren- Washington: 202.256.5822 place. sic team members finally given access Business Office: 317.602.3620 The wreckage and grotesque five days later appeared stunned at images from the Ukrainian sunflower the entire fiasco. It was an appalling © 2014, Howey Politics Indiana. and wheat fields were aptly described third world scene. All rights reserved. Photocopy- by the New York Times’ Peter Baker There were almost im- and a reporting team that included mediate assertions from Putin that ing, Internet forwarding, fax- Chivers: “The plane exploded in the Ukraine military was responsible, ing or reproducing in any form, midair and plummeted down into a absurd in the lack of time to make a whole or part, is a violation of series of large fields of wheat, grass meaningful assessment. federal law without permission and sunflowers, its fuselage and land- Foreign Policy’s Shane Harris from the publisher. ing gear twisted into a mountain of and Elias Groll would cite not only U.S. Page 3 intelligence sources and satel- shoot-down, “Nearly 300 innocent lives lite imagery, but a “mounting were taken – men, women, children, pile of evidence posted on infants who had nothing to do with the social media, including posts crisis in Ukraine. Their deaths are an by separatist leaders, tweets outrage of unspeakable proportions.” about the location of missile He was quickly criticized on the right launchers, and YouTube vid- for his “weak” response. eos documenting potentially The historical parallel is that after incriminating conversations Reagan’s 1983 speech, he did little between the men who may to sanction the decrepit, aging and have shot down the jetliner.” paranoid Soviet regime which had One included an image of a created a computer system that would BUK missile system exiting have taken command and control of Ukraine for Russia with one of its nuclear arsenal had it suffered a its four missiles missing. decapitating blow from the U.S. Harris and Groll re- But the shooting of Flight ported: Washington’s will- 007 was a turning point in several ingness to use Twitter and ways. It was followed by the deploy- the Russian equivalent of ment of Pershing missiles in Western Facebook to bolster its case Europe, and the Jason Robards’ film against Putin is a signal mo- “The Day After,” depicting Lawrence, ment in the history of social Kansas, following a U.S.-Soviet nuclear media, which is now taking holocaust, that drew 100 million its place alongside classified viewers. Hoffman would report in intelligence as an important his Pulitzer Prize-winning book “The source of information for world Dead Hand” that Reagan came to leaders. As impressive as spy realize how Flight 007 had sent the photos and voice analysis may Soviets closer to a nuclear response be, it’s social media that has than anyone had realized, that Soviet helped build the public case against Russia and that has leaders viewed the Americans as potential aggressors, rallied world leaders to call for a thorough investigation of and it prompted him to envision a world without nuclear the shoot-down and consider imposing new sanctions on arsenals. In an address that December broadcast across Moscow. Given the volume and the specificity of this pub- Europe, Reagan said, “If the Soviet government wants licly available intelligence, it’s likely that the case against peace, then there will be peace.” Putin would be just as persuasive even if all the usual The other turning point came within Mother Rus- sources of state spycraft weren’t on the table. sia. Flight 007 was a symptom of a corrupt and collaps- This all conjured softer but equally devastating ing regime, though there was more than half a decaying imagery and rhetoric from the aftermath of the Sept. 1, decade left. With the passing of Brezhnev, Andropov and 1983, Soviet shooting of Korean Airlines Flight 007, killing Chernenko came the liberalizing Gorbachev, who realized 269 souls. The Washington Post reported on the chilling the Soviet system was not only unraveling, but its closed exchange between the Soviet pilot and his air traffic con- nature could not compete with the West turning to person- troller that was broadcast around the world: “The target is al computers, fax machines, cell phones and the emerging destroyed.” Internet. It prompted President Reagan, in a national Putin staked the 2014 Winter Olympics at Sochi address four days later, to say, “Let me state as plainly as to extend to the world his imagery of the current Russian I can: There was absolutely no justification, either legal or Federation, and a sanitized, mechanized remake of the moral, for what the Soviets did. One newspaper in India Soviet Stalinist era. Even in that feel-good sequence, there said, ‘If every passenger plane . . . is fair game for home were signals of unrest as his Cossacks militia roughed up air forces . . . it will be the end to civil aviation as we know members of Pussy Riot. A Levada Center Poll stakes Pu- it.’ Commercial aircraft from the Soviet Union and Cuba tin’s popularity at 80 percent. But a Pew Research survey on a number of occasions have overflown sensitive United released on July 9, a week prior to the Flight 17 shooting, States military facilities. They weren’t shot down. We and shows disapproval of Russia spiking across the globe. other civilized countries believe in the tradition of offering Even as corpses rotted amon the sunflowers, help to mariners and pilots who are lost or in distress on Putin sought to open “negotiations” that he hopes will the sea or in the air. We believe in following procedures to ultimately pull Ukraine away from the European Union, the prevent a tragedy, not to provoke one.” issue that began this entire post-Olympic sequence. President Obama said a day after the There were bizarre twists in all of this, as the Page 4

New York Times reported that Putin’s July 17 flight from President Bush41 had a 91-percent approval Latin America actually crossed paths with Flight 17 over rating following the invasion of Kuwait in 1991, and lost Warsaw. In a phone conversation with President Obama an election a year later. Putin’s Russia now faces an epic minutes later – described as “edgy” – an aggravated Putin backlash across the globe over Flight 17, the potential for complained about the U.S. sanctions, and then mentioned news sanctions that could pound his economy if the EU to Obama in passing what he thought was a rebel shooting finally steps up, and the next harsh winter a few months of a Ukrainian military aircraft. down the road. Putin is preparing by ramming through Obama’s post-Crimean sanctions are begin- new laws that allow him to shut off social media. ning to work and are being extended. The revulsion from It’s far too early to predict this being the begin- the European Union, which has had trepidation over the ning of his end. Putin is surrounded by a small group of sanctions, could be a game-changer. U.S. Sen. Dan Coats, KGB-era cronies out of touch in a world of photo op tiger former ambassador to Germany, told Reuters earlier this hunts and stacked hockey exhibitions. Here in the era of week, “When you have a bully in the playground, you’ve Arab Springs and colored revolutions in Kiev that toppled got to stand up to him. You can’t sit there and calculate his puppets, Putin may not be able to fathom how quickly the potential economic risk. Better to do it now than to power erodes after epic mistakes and miscalculations. v pay a much tougher price, a much harder price, later.”

Nate Silver’s 538 blog observes: “In 2010, Demo- Midterm, from page 1 crats were down 2 percentage points on the trust mea- sure, predicting a loss on the national House vote by about ous bet at best, particularly following Tuesday’s Georgia 4 points. In reality, Democrats lost by a little under 7 primary where businessman David Perdue upset 11-term points. That’s close, but the question doesn’t perfectly pre- U.S. Rep. David Kingston for dict the national House the U.S. Senate nomination. vote; it tends to over- Republicans need to pick up estimate how well the six seats to gain a majority, president’s party will do. and at this point most ex- That’s why the Repub- perts put their current gains licans’ 2-point edge in in the three- to four-seat 2010 predicted a 4-point range. While there is wide- victory. The average spread distrust of President absolute error between Obama’s performance, the the measure’s predicted GOP millstone is that its own margin and the ac- congressional approval is at tual margin is 3.3 points. historic lows. Right now, Democrats New York Times and Republicans are blogger Nate Cohn reported tied, according to this earlier this week: “The anti- measure – each received Democratic wave might still 35 percent in Gallup’s arrive. But with three and latest poll. This suggests a half months to go until Republicans have a slight November’s elections, the edge. This question also promised Republican mo- helps unravel another mentum has yet to material- apparent paradox: Polls ize. The race for the Senate, show voters favor the at least right now, is stable. Democratic position There aren’t many polls ask- on “nearly everything,” ing whether voters would including the minimum prefer Democrats or Repub- wage, the environment licans to control Congress, and same-sex marriage. but the Democrats appear But while Democrats to maintain a slight edge may hold a lead on most among registered voters.” issues, Americans con- Page 5 sider few issues pressing. Voters prioritize.” President Obama’s war on coal. North Carolina Sen. Kay Despite talk from House Minority Leader Nancy Hagen is in better shape than most figured at this point. Pelosi about the potential for a Democratic majority there, most national experts predict only a shift of a handful of U.S. House seats. In Indiana, only the 2nd CD is in play and fresh- Analyst Stuart Rothenberg of the Rothenberg man U.S. Rep. Jackie Walorski is favored, though that race Political Report observed last week: “The fight for Con- bears monitoring throughout the fall. gress is all about the Senate. The battle for the House of Hoosier Republicans appear to have the advantage Representatives is about positioning for 2016 rather than in the three statewide races, if fundraising and cash on about which party will control the chamber next year. Na- hand is indicative of likely November results. tional polls continue to forecast a rocky midterm election And in general assembly races, Senate Republi- for President Barack Obama’s party, and Democratic insid- cans are likely to pick up two Southern Indiana seats in ers privately acknowledge that they have no chance of their first election cycle under the new maps, while Demo- netting 17 seats the party needs to win a House majority crats are hopeful they can knock off a couple of southeast- in the fall. But they know that 2016, when a presidential ern GOP incumbents. In the Indiana House, Democrats are electorate will turn out at the polls, could vie them a bet- defending HD45 in the seat vacated by State Rep. Kreg ter environment in which to run. They would like to nar- Battles and are targeting a handful of seats in the Terre row the GOP’s House margin this cycle to increase their Haute, Northwest Region, Anderson and Fort Wayne areas. chances for taking back control of the House next cycle.” But to say that Indiana Democrats are poised to make In Indiana, few Democrats wanted to set up in major inroads in the legislative GOP super majorities would the 2014 cycle and other than U.S. Reps. Pete Visclosky be an exaggeration at this mid-summer point. and Andre Carson, as well as 2nd CD challenger Joe Bock, Here is a breakdown of the various battlegrounds no other Democratic challengers are showing any traction shaping up for the 2014 cycle: in fundraising. U.S. Rep. Jackie Walorski had $900,000 cash on hand at the end of the second quarter FEC U.S. Senate deadline, compared to Bock’s $277,000. Walorski has out- David Cantanese and Lauren Fox, writing for U.S. raised Bock $1,520,000 to $534,000 for the cycle. Bock News & World Report, observe that the Republican quest still has time to get competitive on the money front. for six additional U.S. Senate seats is being tempered due Rothenberg rates the 2nd CD as “Republican fa- to a slate of mediocre candidates who are underperform- vored” and notes that Walorski is already up with positive ing expectations. “If the election were held today, the TV ads this summer. South Bend Tribune columnist Jack GOP would net pickups Colwell wrote last week that Walorski “would in South Dakota, West like to win the race right here, right now, this Virginia and Montana, summer. It’s smart strategy for Walorski to try to propelling them halfway win it now, even if some politicians cling to old to the marker necessary theories of waiting for supposed race-starting to win control. The next time in September.” most favorable envi- Liberal political commentator Bill Maher ronment looks to be in has his eyes on Walorski as part of his Flip a Dis- Louisiana, where Rep. Bill trict campaign, meant to unseat an incumbent Cassidy is slightly ahead in elections later this year (Vandenack, Elkhart of Sen. Mary Landrieu, Truth). Maher has yet to select the finalist, the D-La., in a race likely U.S. House member who’ll eventually be the headed to a December target of the comedian ahead of the Nov. 4 elec- runoff. Arkansas and tion. In singling her out on the June 25 edition North Carolina, states that of his HBO program, “Real Time with Bill Maher”, seemed like the party’s he alluded to the new boundaries drawn for best battleground conversion opportunities, now look less the 2nd District after the 2010 census count that made promising. That gets Republicans to a gain of four, but at it more conservative. Walorski narrowly lost in 2010 to least seven other seats remain too close to call, including Democrat Joe Donnelly in her first bid for the U.S. House, emerging opportunities in Iowa and Colorado, leaving the but won a tight election in 2012 after redistricting. “That’s GOP just short of a majority four months from the elec- right, she is a gerrymandering queen, and don’t forget, tion. this is what we are fighting against,“ Maher said on his Perdue’s upset win in Georgia appears to be giving program. HPI Horse Races Status: Leans Walorski Michelle Nunn a chance to convert that seat. In Kentucky, Senate Majority Leader Mitch McConnell is in a tight race Indiana statewides against Democrat Secretary of State Alison Lundergan Republican incumbent Secretary of State Connie Grimes, but McConnell is still a good bet there due to Page 6

Lawson had a $534,000 to $195,000 second quarter end- challenging State Sens. Jim Smith and Ron Grooms with ing balance over Democrat Beth White; Auditor Suzanne former and current county commmissioners Julie Berry and Crouch had a $336,000 to $57,000 second quarter balance Chuck Freiberger running, but any Democratic gains in the advantage over Democrat Mike Claytor; and Treasurer Kel- Senate appear to be unlikely at this point. ly Mitchell led Democrat Mike Boland $58,000 to $6,300. In the House, Democrats believe they can take out These races are likely to follow party line voting in what State Rep. Jack Lutz in HD35 in a rematch with Melanie will likely be a low-turnout election, with no one having the Wright, and appointed Rep. Holli Sullivan with Vander- financial resources to buy enough gross rating points to burgh Commmissioner Steve Melcher and are pressing alter the dynamic. While Republicans have had ethical and freshman State Reps. Martin Carbaugh, Hal Slager and election issues in recent cycles that had statewide candi- Alan Morrison. Democrat Jim Wieser is challenging Slager, date totals running well below gubernatorial nominees, in Mark Spelbring is in a rematch against Morrison. Repub- the last cycle without a presidential, gubernatorial or U.S. licans believe that former representative Bruce Borders Senate candidate on the ballot (2002) the GOP easily won can reclaim the HD45 seat vacated by Rep. Kreg Battles, all statewide races. though former House speaker and 2012 gubernatorial nominee John Gregg is expected to ardently campaign on Indiana General Assembly behalf of Rep. Bianca Gambill for his old seat. Republicans In the Indiana Senate, Republicans are likely to are also taking aim at State Reps. Shelli VanDenburgh with pick up the open SD48 seat vacated by State Sen. Lindel Republican challenger Julie Olthoff and Terry Goodin with Hume with State Rep. Mark Messmer running, as well as Republican Lisa Shadday. Like the Senate, at this point SD47 where State Sen. Richard Young faces Republican the Democrats don’t seem poised to make any substantial Erin Houchin due to the 2011 redistricting. Democrats are gains in the GOP’s 69-seat majority. v

is done, at year’s end, she plans to fiercely advocate for Despite primary loss children whom she believes are Indiana’s most disenfran- chised. Kubacki presses for kids This summer, as a member of the Commission on Improving the Status of Children in Indiana, she’s serv- By MAUREEN HAYDEN ing on a task force examining the education of juveniles CNHI Statehouse Bureau in state prison. Their graduation rates are deplorable, and INDIANAPOLIS – State Rep. Rebecca Kubacki had she wants to devote more resources to those children to plans for her return to the General Assembly next January. reduce the risk of them returning to prison as adults. The two-term Republican from Kosciusko County wanted She’s hopeful someone will carry the water for to exert “full force” to roll back a law that prevents the both the immigrant and jailed children when she’s gone. children of undocumented immigrants from paying in-state But she knows they’re unpopular constituencies without tuition to attend state colleges much voice “in the hallway” – the power spot where lobby- and universities. ists huddle outside legislative chambers. Kubacki, a conservative As congressional gridlock stalls immigration re- and the daughter of migrant form, Kubacki says states should move ahead. workers, envisioned granting Indiana is one of only five states that specifically in-state rates to undocumented prohibit colleges from charging in-state tuition to un- students in return for their documented students or bars them from attending public promise to complete a degree, college. Other states, including Texas and California, have perform community service and stay in Indiana. The best eased access to their state colleges and public scholarship and brightest, as she saw it, could become teachers, doc- funds. tors and entrepreneurs – not to mention role models to Proponents of banning undocumented stu- immigrant children everywhere. dents from paying in-state rates argue that lawbreakers “These are the kids we want to stay in our state,” shouldn’t be rewarded for entering the United States she said. “Instead we’re just kicking them in the teeth.” illegally, and that only lawful residents should qualify for But Kubacki won’t be coming back to the Gen- resident tuition. eral Assembly. In May, she lost in the Republican primary “I believe in the rule of law. We’re a nation of to Tea Party candidate Curt Nisly. She’d been targeted for laws,” is Kubacki’s response. “But these children didn’t not supporting an amendment to the state constitution to break the law, their parents did. But they’re paying for the ban same-sex marriage. With her loss came the loss of the sins of their fathers.” only Republican Latino in the Legislature. While working to convince fellow Republicans Kubacki is not going away quietly. Until her term of the merits of her argument, Kubacki has also actively Page 7 supported the Indiana Latino Scholarship Fund. Its annual need a lifetime of taxpayer-funded services. Or it can open dinner, earlier this month, raised $325,000 to help first- the door to the American dream. generation Latino students attend college. Kubacki may be leaving the Statehouse, but she’s That’s not enough money, she argues, to help not losing her voice. all of the undocumented children who’ve grown up in “I’ve seen these kids who work so hard and never Indiana, attending K-12 public schools, who could make give up their dream of going to college,” she said. “So I important contributions if allowed to continue their studies. can’t give up on them.” v “Why are we fighting this?” she asks. “Let’s be honest, these children aren’t leaving.” Maureen Hayden covers the Statehouse for the As she sees it, there are two options: Indiana can CNHI newspapers in Indiana. She can be reached at deny these children an education, creating a permanent [email protected]. Follow underclass of undocumented immigrants who will may her on Twitter @MaureenHayden

But the right-wing American Legislative Exchange Kansas, Brownback Council (ALEC) and their allies in various state capitals like the Indiana Chamber of Commerce keep peddling this nonsense. Fortunately, in Indiana, a bi-partisan group of no ‘Laffing’ matter mayors and county commissioners, who have seen state By SHAW FRIEDMAN support to cities, towns, schools and counties “trickle LaPORTE – What’s the matter with Kansas? It’s a down” with each new tax, cut rose up together and said Laffer all right, but it’s no laughing matter. “no.” Without replacement revenue from the state which That’s right. Arthur Laffer, former Reagan advi- is currently hoarding a $2 billion surplus, Republican and sor and tax cut champion who was Democratic mayors alike declared enough was enough. invited in to speak at Gov. Pence’s One after another wrote that even more important to recent closed door “Tax Competitive- inducing new business and creating jobs than tax cuts was ness and Simplification” Conference a community where public safety was attended to, infra- in July is still peddling (for a hefty structure was repaired, parks did not go to seed and public speaking fee) the same discredited schools could turn out a skilled workforce. trickle-down, supply-side tax-cut non- Unfortunately, Kansas was not so lucky to see sense that helped tank the economy this kind of bi-partisan opposition to the Laffer tax-cut under the Bush administration. nonsense. Gov. Brownback after urging by Arthur Laffer His latest disaster was urging Kan- pushed through his spectacularly ill-advised income tax sas’ Republican Gov. Sam Brownback cuts in 2012 and 2013. The cuts, which largely benefited to enact the largest tax cuts in percentage terms in one the wealthy, cost the state 8 percent of the revenue it year that the state has ever enacted. Same old bromides needed for schools and other government services. What coming from the same old, tired advisors who have wrong- happened as a result? Kansas’ economy isn’t booming. ly advised those in government for years. It’s the same It’s a bust thanks to Arthur Laffer and supply side econom- witch doctor stuff that the Indiana Chamber of Commerce ics. Kansas just reported it took in $338 million less than tried to peddle this last session of the legislature when expected in the 2014 fiscal year and would have to dip they sought to completely eliminate the business personal heavily into a reserve fund. property tax and claim that once again magically such tax The state’s budget has plunged so deeply into cuts would pay for themselves with increased business deficit that Moody’s just downgraded its debt. With less activity and new revenues. money to spend, Kansas is forced to chop away at its only Problem is this doctrine crashed and burned real hope for economic expansion, investment in public some two decades ago and there’s no evidence that the schools and colleges, cutting K-12 schools by 2 percent experiment works. Even Harvard’s Gregory Mankiw, a over the last two school years and higher education some Republican and later chairman of George Bush’s Council on 3 percent. Economic Advisors, has written about the damage done by It’s a cautionary tale for our Hoosier legisla- “charlatans and cranks” and he was specifically referring tors who listen to the siren song of Arthur Laffer, ALEC to a “small group” including none other than Arthur Laffer. and their discredited supply-side, trickle-down theories. He highlighted the role of those who advised Reagan that Most of ALEC’s efforts as Nobel laureate Paul Krugman an across-the-board cut in income tax rates would magi- have written are directed to trying to impose Kansas- like cally raise tax revenue, and it simply never happened. tax cuts in other states while calling for increases in state Page 8 sales taxes, which falls most heavily on lower income Priorities or even the non-partisan Multi-State Tax Commis- households. Its agenda is simple and straightforward says sion who could give a much more balanced picture than Krugman: “ALEC’s efforts are directed not surprisingly at the one presented. privatization, deregulation, and tax cuts for corporations We’ve got to do better than Arthur Laffer. And and the wealthy.” that is no laughing matter. v Maybe it’s time to take a lesson from disasters like that pushed on the state of Kansas by supply siders Shaw R. Friedman is a LaPorte attorney who has like Laffer and ALEC. Maybe, just maybe, the next time our advised various local government entities during governor holds a “tax competitiveness and simplification” the 30 years of his law practice and is a regular HPI conference, he might want to invite in speakers from all contributor. sides of the spectrum like the Center on Budget and Policy

The Northwest Indiana Business Roundtable stud- Unions remain a ied data compiled from 40 region construction companies and 30 million man hours. The study examined man hours, recordable incidents, days away and restricted work cases viable political force over the last three years. Over that period, are contractors By RICH JAMES were involved in one of the largest construction projects MERRILLVILLE – Although their numbers have in area history, $4.2 million in advancements to the BP fallen, unions in Northwest Indiana remain a viable force refinery in Whiting. when it comes to electing folks to public office. In terms of the safety, Jim Andreas said, Politicians – make that largely Democratic candi- “These numbers are very significant for all of the hard- dates – go out of their way to seek the support of unions. working men and women of the Northwest Indiana union And if they win a union endorsement, the fact is proudly construction industry and for the Construction Advance- displayed on campaign literature prior to primary and gen- ment Foundation. Andreas is Environmental Safety and eral elections. Health director with CAF. That union label is in Andreas added, “We’ve built some outstanding large part why there are signs in training programs throughout our region that focus on yards across the region pro- developing essential skills to keep workers safe on the job, claiming “Proud Union Home.” keep production activity high and reduce losses due to ac- Many times, the signs will refer cidents and time away from work.” to the specific union. As a result, CAF recently opened a $1.6 million training facility the Northwest Indiana Building for a host of trades. That isn’t usually the case for compa- and Construction Trades, the nies who hire workers into non-union firms. United Steelworkers of America, Even Rick Ruble, Indiana Department of Labor Teamsters and other unions commissioner, praised the BP construction and the unions, remain a viable part of the fabric calling the project a “model example of safety priorities in of Northwest Indiana. action.” v When Gov. Mitch Daniels and the Republican-controlled general assembly approved Rich James has been writing about state and local right-to-work legislation a couple years ago, the local government and politics for more than 30 years. He unions took it as a personal assault. Area unions nick- is a columnist for The Times of Northwest Indiana. named the new legislation the right-to-work-for-less law because it attacked the heart of what unions stand for, good working conditions and a livable wage. Unions at the time provided evidence that those working for non-union shops were paid considerably less than their cohorts who worked for union shops. At least in part because of the right-to-work issue, area unions were thrilled this week when a study indicated that those who worked for the local union con- struction industry had 15 times fewer accidents than the national rate. Page 9

this phenomenon is called. The current low rate of inflation Truth and consequences is not due to the government ‘cooking the books.’ Now, I know some readers think there is a grand conspiracy afoot about inflation to lie about official statistics. That is nonsense of the first order. By MICHAEL HICKS It is true that future inflation can be very dam- MUNCIE – Inflation is oft confused with simple aging and looms deeply over our future. This is especially fluctuations in supply and demand. true because the Federal Reserve has no historical ex- Almost nothing in economics seems to confuse ample of a nation safely reducing the huge money supply people as much as monetary inflation. That confusion we now have. Still, the very low inflation now is a sign of leaves an intellectual void into which some of the least continued weakness in an economy that remains unable credible ideas of the modern world crawl. to grow and create jobs and opportunity. Why would the Goods and services typically have a price dictated Obama Administration lie about that? Moreover, does any in currency, like our dollar. The prices for these goods can rational reader believe this administration is sufficiently rise or fall for a variety competent to hide such a large scale lie? Nope! v of reasons. Sweet corn is cheaper at the end Michael J. Hicks, PhD, is the director of the Cen- of July than the end of ter for Business and Economic Research and the June because it is more George and Francis Ball distinguished professor of plentiful in July, and economics in the Miller College of Business at Ball its price will rise again State University. Hicks earned doctoral and mas- in late summer. This ter’s degrees in economics from the University of is simple supply and Tennessee and a bachelor’s degree in economics demand, not inflation. from Virginia Military Institute. He has authored We hear often two books and more than 60 scholarly works focus- about healthcare costs ing on state and local public policy, including tax rising, but are they re- and expenditure policy and the impact of Wal-Mart ally? There is almost no on local economies. Hicks commentary will be a medical procedure that regular feature in Howey Politics Indiana. is more costly now than it was a couple of decades ago. Healthcare costs and prices are falling, but we consumers are buying more of it because we are offered a dizzying array of medical services with which to make our lives bet- ter. This is also simply supply and demand, not inflation. A beer example is perhaps the best way to de- scribe healthcare. If I buy a six-pack of beer today and like it so much I go back to the store and buy two six-packs of a better, more expensive beer tomorrow, that ain’t infla- tion, simply higher demand. As it turns out, inflation can only occur when the supply of the money used to make the transaction increas- es. Inflation is not due to some underlying change in the supply and demand for goods or services, but in an excess supply of the currency in which we measure the price of goods. This growth in the money supply is only a nec- essary, but not sufficient, condition for inflation to occur. We also need businesses that aren’t afraid to raise prices and workers who are unafraid to ask for higher wages. In the wake of the Great Recession, we have had a historic growth in the supply of money, but few busi- nesses seem willing to boost prices and few workers feel inclined to demand higher wages. So, we have had very modest inflation for several years. This unwillingness to change prices has come as a bit of a surprise to many economists, including this one. I even wrote a doctoral dissertation on price stickiness, as Page 10

pop song goes, “Let the words fall out honestly.” The vanity Vanity plates are simply a means of indicating our humor and pride and assigning more value to each driver than another number. The plates serve a purpose in that of the state drivers don’t have to struggle to remember what’s on their By DAVE KITCHELL license plate because they paid good money to remember LOGANSPORT – Any Hoosier who wanted to walk the tag. into an Indiana Bureau of Motor Vehicles branch and plunk The head-shaking part of this story is a report that down a little extra spendable income to reserve a specialty Indiana may consider eliminating the vanity plate program vanity license plate for the last year has had to deal with because of the controversy. Wait a minute, you’re tell- this reality: You can’t pay the state money to do it. ing us a farm family that puts food on my plate can’t put That’s because the vanity plate program has been the words “We Farm” on a plate? What’s wrong with this delayed while state officials sort picture? out the controversy over what Indiana legislators, the governor and the head might be considered offensive of the Indiana Bureau of Motor Vehicles could have their language on the plate. Mean- own specialty plates issued by taxpayers: “INEPT.” Why while, state coffers have suffered has it taken a year, and probably will take longer, to come because Hoosiers who want to up with simple regulations for purchasing vanity license give the state their money can’t. plates? Is it any wonder legislators struggled to come up This story is relevant with a consensus on the Defense of Marriage Act? because it serves as a terrific ex- Sometimes, doing nothing is the right thing to do, ample of how inept state govern- whether it’s in a business, a church, a charity or a family. ment can be when it is given a Doing nothing in government tends to get the attention of challenge, even one as innocuous people who expect something to be done by people who as determining what the rules are are paid to do it. But in Indiana, we put off doing what for spending your money on a needs to be done until we have to deal with it, witness state service. legislation such as the Affordable Care Act which forced This isn’t the first time we’ve had issues with Indiana’s hand to come up with an alternative to providing license branches in this state. Hoosiers who were around health care for Hoosiers. Say what you want about Obam- in the late 1980s can recall the time when the “old boy” acare, and many have, but it has succeeded in getting In- system of managing license branches with county political diana lawmakers to deal with a problem they have ignored chairs and/or their spouses was ended. Then when spe- for years. cialty plates finally came into being with the Bayh admin- There are those who want to see the cardinal re- istration, there were those who thought we should stop placed as the state bird. For those who want vanity plates selling some of the plates that weren’t popular, including and for all those who expect more from state government the Butler University plate. That than what they’re get- was before the Bulldogs played ting, the nominee for in two Final Fours, and you the new state bird is don’t hear anyone lobbying for probably the ostrich, that change now. Hoosiers who sticking its head in the didn’t support a license plate sand. That would sym- for gay youth also made their bolize state officials objections known. who don’t take a stand But when a Greenfield on anything other than police officer couldn’t secure their right to do noth- “Oink” for his plate, it set off a ing and get paid for it. debate that continues. Granted, Carly Simon once it may be offensive to some sang a hit song titled officers to be referred to as pigs, but it shouldn’t be if you “You’re So Vain” that targeted actor Warren Beatty. Don’t own a farrow-to-finish operation that contributes to the look for Warren any time soon in Indiana, but the chances state ag economy. Offending, like beauty, is in the eye of him or Carly Simon showing up here may be better than of the beholder, which is to say that many license plates legislators resolving a fiasco of state decision-making that might be offensive to someone, somewhere, somehow. leaves us all thinking how vain state officials are when But oink, really? they claim to be running the state. v Restricting free speech on vanity license plates is a bit like editing letters to the editor in newspapers: Elimi- Kitchell is an award-winning columnist based in nate profanity, racial slurs and religious attacks and as one Logansport. v Page 11

a laughingstock. News travels. The city council image Despite Kernan, South doesn’t just stay in the city. As the economic development folks have warned, this could somewhere turn off a poten- tial developer. Sure doesn’t help. Bend Council not as There are mostly good people on the council. It’s a shame that all now are tarnished with the same ob- bad as Congress scenity. Only one member posted the obscene picture. Six of the nine council members wanted some form of critical By JACK COLWELL resolution. A two-thirds majority can’t prevail? SOUTH BEND – South Bend’s city council, now a Derision came amid the long delay as the council punch line for jokes, is ridiculed as the most quarrelsome considered noisily a response after Council Member Henry council around here since Snyderville days in Roseland. Davis Jr. in January posted that extremely graphic picture Spending nearly half the year in snappish delibera- and a link to an article about sex with animals on Face- tion over a councilman posting an obscene picture of a book, with his council affiliation listed. naked man and a dog on Facebook will do that to a coun- Some members wanted lawyers, including the cil’s image. Especially when that flap was only part of the prosecutor, involved. Could there be removal from office? flapping and the result was no Some criminal charge? resulting resolution. Even if there had been a way to throw Davis But the South Bend Coun- off the council, doing that would be ridiculous. He was cil is better than Congress. duly elected and had committed no felony. He should be OK, maybe that’s faint praise, subject to removal only by those who elected him. They like saying a baseball team is can choose to remove him or to re-elect him in voting next better than the Chicago Cubs. year. But the South Bend There should have been a quick passage, a resolu- Council is much better than tion to express council displeasure with the posting. It Congress. Congress has hurt should have passed 9-0, with Davis agreeing. After all, he the nation, rejecting a jobs said the picture was disgusting and out of order. bill for economic recovery, Mayoral politics involved? Well, much council lowering the nation’s credit blustering over those mysterious recordings of police tele- rating with deficit default and phone conversations targets Buttigieg, even though the government closing shenanigans and shattering investor mayor certainly didn’t authorize the recordings and they confidence with stalemate on budget, deficit, infrastructure apparently reflect police dissention that he inherited. and immigration issues. The council hasn’t hurt the city. By the way, Council Member Derek Dieter isn’t Not yet. running for mayor. Not currently. Dieter is likely to run South Bend is doing quite well, with all the new for city clerk. And it’s too bad he didn’t retain the council economic development projects, new employers, new presidency this year. If he had been presiding at the start jobs and future research projects in conjunction with the of the year when the obscene picture captured all that at- University of Notre Dame. tention, Dieter would have enforced some decorum. When Joe Kernan, former mayor and former Decorum has fled. Punch lines abound. Will council governor, harshly criticized obstreperous council conduct members stop punching? - personal insults and threats and lack of decorum - some If not, they will be left with naught but a motto of members cited all the developments as proof that bad faintest praise: “We’re as funny as Snyderville and better behavior hasn’t stalled progress. than Congress.” v They are right. So is Kernan. Credit for successful governmental efforts Colwell has covered Indiana politics over five de- on economic development goes to the administration of cades for the South Bend Tribune. Mayor Pete Buttigieg. Yes, the council could have blocked some of the development projects and didn’t. Some coun- cil members did demand that the city negotiate purchase of Chase Tower, the city’s tallest building, by a developer accused before that and after of fraud with developments elsewhere. The mayor wisely refused, and a good deal with another developer was struck. So the council caused no harm. Kernan is right, however, in warning about sound and fury at council meetings, all the nastiness, petti- ness and long wrangling. These antics make the council Page 12

Karen Francisco, Fort Wayne Journal Ga- sional intent, and the statutory language is pretty clear. zette: Indiana Inspector General David Thomas and the Members of Congress have subsequently stated that this state ethics commission dispensed with the Tony Bennett wasn’t their intent, but my understanding is that courts mess as quietly as possible, but making something disap- are specifically barred from considering post-facto state- pear doesn’t mean it never happened or that it should ments about intent. When you read through the ruling, it’s have happened in the first place. Bennett’s champions out- easy to see the many ways in which the law’s architects side Indiana have an easier job because their audiences brought this on themselves. The law was highly complex, don’t know the details of the former state superintendent’s badly drafted and very controversial. When a Republican transgressions and don’t realize they represent just more won a special election for the Senate in Massachusetts, the of the muck in the ethical swamp of Indiana state govern- Democrats had to push it through on a straight party-line ment. Under one-party rule, anything goes here. Demo- vote with some adroit parliamentary maneuvering -- which cratic elected officials in northwest Indiana have appropri- gave them a health-care law, but one that was badly put ately noted that the same campaign violations for which together and couldn’t be substantially amended. The gap- Bennett was fined $5,000 have sent politicians there to ing holes were patched with administrative fixes such as prison. “We don’t have an ethics commission in northwest an IRS ruling that held federally established exchanges to Indiana. We have the FBI,” Hammond Mayor Tom McDer- be equivalent to an exchange established by the state. The mott Jr. told a radio station. At the Statehouse, however, vast scale of the law meant that the administrative gym- the most blatant of conflicts can be dismissed and anyone nastics that held it together might not be sustainable. v daring to point them out can be labeled as a “self-serving opportunist” or “crusading journalist.” . . . Indiana’s lead- Masha Geffen, Slate: What various observers ers make no apologies for the ethical mess. have perceived as a moment of truth that changes Like Bennett’s champions, they wonder aloud the mathematics of the Ukrainian crisis is, from how anyone could possibly suggest these Putin’s point of view, a misstep in a conflict with “public servants” are doing anything but serv- the West that he will be engaged in for years—un- ing Hoosiers. The problem for them, however, til he leaves office, which he plans to do feet-first is that the swamp doesn’t go beyond Indiana’s many years from now. It does not call for radical borders. When one of these public servants steps; it calls on Putin to be cunning in the way makes a bid for a post elsewhere, they quickly learn what he obfuscates and buys time—two of the very few ar- is acceptable in Indiana is not only frowned upon most eas in which he is actually capable of being cunning. He everywhere else -- it’s not legal most everywhere else. proceeded to hold an emergency meeting of the Russian That’s why you won’t see a former Indiana governor in the security council on Tuesday. When the meeting was called, White House for awhile and why Florida’s commissioner of many opposition-minded Russians expected the announce- education is not a Hoosier. v ment of a crackdown: Putin has often used tragic events as a pretext for measures such as abolishing elections or Megan McArdle, Bloomberg News: A U.S. ap- limiting media freedom. Nothing like that happened and peals court issued a ruling that could endanger, or even Russian liberals breathed a collective sigh of relief. As far destroy, Obamacare. The case, Halbig v. Burwell, involved as foreign observers could tell, Putin said nothing of con- the availability of subsidies on federally operated insurance sequence. But here is what he said at the start of his talk: marketplaces. The language of the Affordable Care Act “Obviously, there is no direct threat facing our country’s plainly says that subsidies are only available on exchanges sovereignty and territorial integrity today, of course. This is established by states. The plaintiff argued that this meant, guaranteed primarily by the strategic power balance in the well, subsidies could only be available on exchanges world.” Translated, this means, I gathered you here today established by states. Because he lives in a state with a to remind the world that Russia is a nuclear power ean- federally operated exchange, his exchange was illegally while, on Tuesday, when he was not busy threatening the handing out subsidies. The government argued that this West with nukes, Putin signed several new laws. One bans was ridiculous; when you consider the law in its totality, it advertising on paid-cable and satellite channels, effectively said, the federal government obviously never meant to ex- banning any independent television channel now or in the clude federally operated exchanges from the subsidy pool, future from making money. (All broadcast channels are because that would gut the whole law. The appeals court controlled by the state.) Another gives the government disagreed with the government, 2-1. Somewhere in the the tools to shut off Russians’ access to Western social neighborhood of 5 million people may lose their subsidies networks such as Facebook or Twitter and services such as as a result. This result isn’t entirely shocking. As Jonathan Gmail or Skype. A third provides for a jail sentence of up Adler, one of the architects of the legal strategy behind to four years for denying that Crimea is a part of Russia. Halbig, noted today on a conference call, the government On the same day, courts in Moscow and St. Petersburg was unable to come up with any contemporaneous con- ruled a half-dozen human rights organizations were “for- gressional statements that supported its view of congres- eign agents,” effectively ending their activities. v Page 13

a year for local governments (Indiana ronmental group and its supporters Lake judge strikes Public Media). Legislation passed say the 427-megawatt unit at India- down right to work this year allows local governments to napolis Power & Light’s Harding Street either exempt new equipment from complex threatens the public health the business personal property tax, with toxic emissions that cause respi- INDIANAPOLIS - A Lake eliminate it on small businesses or ratory woes in children, the elderly County judge has struck down In- abate the tax on specific projects for and others. A resolution supported by diana’s 2012 right-to-work law that up to 20 years. It also created a study the Sierra Club, the consumer watch- made it illegal for companies to com- committee to examine the business dog group Citizens Action Coalition, pel nonunion members to pay fees personal property tax. The commis- neighborhood organizations and other for union services (Associated Press). sion is made up of lawmak- groups was endorsed Tuesday by a But Indiana Attorney ers, business leaders and City-County Council panel calling for General Greg Zoeller said local government officials. IPL to retire the unit. Wednesday that he will State Sen. Brandt Hershman, ask for a stay to prevent R- Buck Creek, who chairs the decision from taking the commission, says it’s Amanda Banks effect immediately. And meant to dig into the details the matter is expected to of tax policy, which he notes can be a now a candidate ultimately be decided by the Indiana complicated subject. “We want to en- COLUMBIA CITY — Amanda Supreme Court, where a similar case sure that we’re achieving our job cre- already is pending. “Strong opinions Banks, wife of State Senator Jim ation goals, preserving local revenue, Banks (R-Columbia City), announced exist on both sides about involuntary and doing so in a way that’s fair to all union dues, but the attorney general’s today that she will run to fill her taxpayers,” Hershman says. A group husband’s vacancy in the Indiana office has a duty to defend the laws of local government organizations – the legislature passes from legal chal- State Senate while he is deployed to everyone from mayors, cities, towns, Afghanistan during the 2015 legisla- lenges plaintiffs file,” Zoeller said in a and counties to school corporations statement. “If a trial court finds a law tive session. “It would be an honor and public safety officials – has been to serve in my husband’s place and unconstitutional, then the appropriate leading the fight against cutting the action is to stay its ruling pending the represent the people of the 17th tax without providing money to make Senate District while Jim serves our appeal.” Lake Circuit Judge George Pa- up for the lost revenue. They call ras issued his ruling July 17 and said it country overseas,” Banks said. “I themselves the Replace Don’t Erase believe my background in public policy would take effect immediately upon its coalition. Matt Greller, Indiana Asso- entry into the chronological case sum- and communications, combined with ciation of Cities and Towns executive my experience as a full-time mother of mary, which makes it official. Bryan director, who helps lead the coalition, Corbin, a spokesman for the attorney three busy girls and as a military wife, says he’s hopeful the commission will will bring a unique perspective to the general, said the office received the make meaningful suggestions about decision by mail Wednesday. State State Senate. I’ve had the opportunity possible replacement revenue for local to travel throughout the district with attorneys were working Wednesday governments. “And replace it so that evening on the request for a stay, and my husband over the past five years, in four, five, ten, fifteen years, what- getting to know the people who live Corbin said it would be filed as soon ever that replacement revenue isn’t as possible. He said the state also and work here, and some the issues taken away in the next budget short- most important to them.” State Sen. would file a notice that it would ap- fall, the next down economy,” Greller peal the decision. Jim Banks, a U.S. Navy reserve supply says. corps officer, has been called to active duty in Afghanistan in September Tax showdown over through May of 2015. Banks is unop- Sierre Club wants posed in his reelection campaign and business tax power plant closed will remain on the ballot in November. He intends to submit a leave of ab- INDIANAPOLIS - The next INDIANAPOLIS - The Sierra sence from the Senate for the length showdown between the state and of his deployment. Precinct commit- local governments over the business Club is pressing Indianapolis’ local util- ity to retire an aging coal-fired power teemen from the 17th Senate District personal property tax will be at a blue will elect a temporary replacement for ribbon commission studying the issue plant that’s slated to continue burning coal for at least two more decades Sen. Banks in a caucus following the this summer. There is an ongoing de- general election. bate over the levy on business equip- and has long been the capital city’s ment that generates a billion dollars biggest industrial polluter. The envi-