Notre Dame and USC

Before the college football season began the University of Southern California was ranked #1, Notre Dame unranked. As the college football season draws to a close Notre Dame is ranked #1 and USC unranked. So much for the experts being able to predict real world outcomes. And, of course, fans of the two teams don’t care at all–nor should they–what the experts thought, they care about the results.

What is true in football–what matters is winning and losing, not what the experts think about how you are going to perform–should be true when it comes to states economic perfomance. How the so-called experts rank your state doesn’t matter, how your state’s economy performs–do you have a job, how much do you make–does. Being highly ranked in some business climate index doesn’t pay the bills or  provide money to save for your kids college education.

Unfortunately too many times real world economic outcomes are trumped by rankings when it comes both to our perceptions of which states are doing well and which aren’t and, of greater consequence, to the states we model when it comes to economic growth policy and programming. Not smart!

As we explored in our last post, despite being trumpeted for decades as the Great Lakes state Michigan should model itself on, Indiana has a lousy economy. And yet they are the highest ranked Great Lakes State in the latest Tax Foundation State Business Tax Climate Index. Ranked the 11th best in the nation. The Great Lakes state with the worse Tax Foundation ranking is Minnesota. Ranked 45th, only 5 states ranked lower. (Michigan is ranked 12th.)

My guess is folks in Indiana are not rejoicing in being ranked  11th by some group of experts, anymore than USC football fans are in being ranked #1 by the experts. Indiana is 41st in per capita income–the worse in the Great Lakes–with a full year 2011 unemployment rate of 9.0%  and 25.3% of its residents with income 150% of poverty or lower. And my guess is folks in Minnesota could care less about being ranked the 6th worse state in terms of business climate, anymore than Notre Dame fans care about being unranked this preseason. Minnesota is 11th in per capita income–the best in the Great Lakes–with a full year 2011 unemployment rate of 6.4%  and 19.5% of its residents with income 150% of poverty or lower.

Minnesota’s per capita income is about $9,000 higher than Indiana’s. Which would you rather have, $9,000 more per person in your household or a better Tax Foundation business climate ranking? The answer is obvious. What isn’t obvious is why our elected officials are aggressively pursuing an agenda to make Michigan’s policy look like Indiana’s not Minnesota’s. What we do know is that you aren’t going to get Minnesota’s economy by pursuing Indiana’s policies.

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.