In this curious primary season Indiana finds itself the brief center of attention as Senators Clinton and Obama invest time and treasure in the crossroads of America.  The strongest focus in both their campaigns is my favorite subject – the economy.  Both candidates bemoan the poor Hoosier economy, its job losses and income inequality.  This would be a superb campaign approach for both candidates except that their claims are wholly, totally and embarrassingly devoid of facts.

Indiana’s economy is doing just fine, thank you.  Though the 2001 recession hit the state hard, since then employment is up 3.69 percent. Almost all that growth happened since 2004 when the State began to grow at about 1.5 percent per year.

Hoosier manufacturing is booming and 2007 was a record year for the value of goods produced (in inflation adjusted terms).  While total manufacturing employment has been fairly static since 2004, employment in production workers has been growing as a share of manufacturing.  Most of the job losses represent firms eliminating non-core functions such as specialized management, finance, R&D, business services and logistics. All these sectors are booming, and enjoy double digit employment growth since the last recession.

Why are these good things happening in the Hoosier State?  Part of the answer lies in the folly of our neighbors.  Michigan’s tax and spend policy appears designed to ease the fiscal embarrassment of several South American countries.  And just last year, Ohio voters replaced the ineffectual Bob Taft.  Sadly, his replacement, Ted Strickland is an old friend of taxes, so Ohio suffers.  And must I really discuss Illinois?

Indiana’s prosperity lies in three arenas.  The first is fiscal sensibility.  Though ranked among the top in the nation for tax friendliness, the Governor led the split party legislature to a bi-partisan property tax reform plan of real significance.  The second is education.  Indiana ranks very low in terms of educational achievement, but is a leader in educational improvement.  Third, Indiana enjoys remarkable transportation infrastructure, both public and private.  In taking the bold step in public-private partnerships, Indiana is one of the few states to be actually extending the interstate highway system.

To be sure there are pockets of economic distress.  I live in one.  In these small and middle sized towns, it is hard to lure the sexy new industries of finance and R&D, but this too slowly changes.

Indiana has seen property value growth – we’re not the sub prime capital of America, and truthfully, some of our biggest job losses have come in a shrinking state government.

Painting Indiana as an economic catastrophe makes for good sound bites, and might well have been true in the run-up to the 2004 election, but it is silly in today’s Indiana, a rare point of prosperity in the Midwest.  Like most Hoosiers, I haven’t decided where to cast my vote but I do have some advice for candidates – if you want to win in Indiana, you ought to know this isn’t 2004.