April 13, 2015 | By Richard C. Longworth

Governors on the Warpath

REUTERS

Illinois and Indiana may be competitors, but it’s mostly over which governor can do the most damage to his state.

Earlier this month, Indiana Gov. Mike Pence seemed ready to retire the gubernatorial dunce cap, with his signing and then backtracking on his state’s infamous “religious freedom” law.

But now comes Bruce Rauner, Illinois’ rookie governor, with a virtual declaration of economic warfare on the Hoosiers next door.

“I am going to try to rip the economic guts out of Indiana,” Rauner told the Chicago Tribune. “But we’re going to do it methodically and aggressively. We’re actually going to get it done.

“I am one of the baddest enemies anybody can have,” Rauner went on, sounding like a pro wrestler warming up the crowd.  “When I set a goal, we do it. And we’re coming after Indiana big time. We’re going to deliver jobs out of Indiana and into Illinois.”

This isn’t the way grown-ups talk. It sounds like Bruce the Ripper plans to mass Illinois National Guardsmen somewhere south of Danville and march them east to Indianapolis, burning sycamores and soybean fields as they go. Indiana may have to turn the Wabash River into a moat. 

Beneath this sound and fury, Chicago Mayor Rahm Emanuel spirited a scouting party from World Business Chicago off to Indianapolis to try to lure companies there to Chicago.

All this apparently is the counter-attack to Indiana’s earlier campaign to lure business from Illinois with a legion of billboards lining highways between the two states, asking drivers if they were “Illinoyed by higher taxes?”

Stung by the latest salvo from across the state line, Indiana’s Pence replied that, “for the sake of the Midwest, we hope that one day Illinois will be able to achieve the same business-friendly status that Indiana has worked so hard to achieve.”

If the well-being of the Midwest counts for anything, it’s hard to think of anything more damaging than this schoolyard slanging match.

The fact is that Illinois and Indiana aren’t in competition with each other. They just aren’t. The real competition is thousands of miles away, in India and China and Mexico, and it’s eating our lunch. Indiana and Illinois share a deeply-rooted economy, divided only by a meaningless state line that is struggling fitfully to meet the challenges of a new global economy.

Both states need all the help they can get, and they should start by helping each other. Joint business promotion would be a good place to start. Cooperation to leverage mutual strengths, such as bioscience and advanced manufacturing, would be a big help. So would concerted efforts to wield the intellectual clout of state universities in Bloomington, Campaign-Urbana and East Lafayette.

Especially, the two states, plus Michigan and Wisconsin, could get behind efforts to turn the vast urban area around the foot of Lake Michigan into the single economic unit it should be. Joint promotion of Lake Michigan’s freshwater resources would be a good start.

If either governor was paying attention, they would know that stealing businesses from other places has fallen into disrepute among economic development strategists. Most experts agree that the best plan is to create a true entrepreneurial environment that stimulates start-up companies and supports expansion of existing companies.

This makes sense. Most companies that move across a state line don’t add any employees to the over-all economy: the same workers keep working, but just commute in different directions. In the meantime, the “losing” state loses taxes while the “winning” state, having promised the footloose company a tax holiday, gains none.

Neither governor seems to know about business in their own states. If he did, he would know that almost all the existing big businesses are home-grown affairs that started in Indiana and Illinois and grew there. Examples? In Illinois, there are Caterpillar, Deere, Walgreen, Sears, Allstate. Groupon is a recent example. In Indiana, there are Lilly, Dow Agro, Cummins, the big orthopedic firms in Warsaw.

A successful recruitment, such as Boeing or Toyota, is the exception, not the rule. But most states spent their money and effort now on the occasional lucky strike, instead of watering their own economic gardens. One reason is that governors love to be photographed cutting ribbons, and one big opening makes a better picture than a thousand small ones.

The real rewards in the global economy go to the place with the best work force, infrastructure, public services, quality of life and education. Seldom do companies go to the place with the lowest taxes, except for the bottom-feeders who can always find a cheaper place (think Mississippi) to set up shop. For everyone else, higher taxes spent on strengthening the economy is a lure, not a turnoff.

None of this is a secret. Experts who study real economic cooperation have been saying this for years. Unfortunately, both Rauner and Pence have been too busy talking to listen. 

About

Richard Longworth is nonresident senior fellow on global cities at The Chicago Council on Global Affairs and author of On Global Cities and Caught in the Middle: America’s Heartland in the Age of Globalism, on the impact of globalization on the American Midwest. He also was a distinguished visiting scholar at DePaul University and adjunct professor of international relations at Northwestern University, and is a mentor at the Harris School at the University of Chicago.

Archive


| By Richard C. Longworth

Global Cities Speak

Global cities exist. Like globalization itself, they’re new but real. And like globalization, they’re both enriching and impoverishing, good for those who know how to navigate these global waters, bad for those left in their wake.

| By Richard C. Longworth

On Global Cities

In my new book, On Global Cities, I take a fresh and focused look at global cities — what they are, why they are special, what makes them global, how they emerged, and where they are going.

| By Richard C. Longworth

Into The Madding Crowd

We’re told that we’re living in a world of lonely individuals. Maybe so. But my bet is that the future really lives, like the rest of us, in crowds.


| By Richard C. Longworth

The Future of Farming

I was talking recently with a farmer who farms a big spread in northern Illinois. There’s more to this these days, he said, than just going out and plowing the back 40. Where and how he plows depends largely on the data he gets daily from three satellites orbiting a thousand miles above his farm.  

| By Richard C. Longworth

New Life for Old Cities

Instead of larding the PACs of their favorite political candidates, wouldn’t it be nice if Chicago’s plutocrats put their money where it might actually do some real good? 

| By Richard C. Longworth

Chicago as Stockholm

Chicago is getting bad press, to put it mildly. It may be time for the city to think about a makeover – in both substance and image – if it is going to be taken seriously as a global city. 

| By Richard C. Longworth

Governors on the Warpath

Illinois and Indiana may be competitors, but it’s mostly over which governor can do the most damage to his state. Earlier this month, Indiana Gov. Mike Pence seemed ready to retire the gubernatorial dunce cap, with his signing and then backtracking on his state’s infamous “religious freedom” law. But now comes Bruce Rauner, Illinois’ rookie governor, with a virtual declaration of economic warfare on the Hoosiers next door.

| By Richard C. Longworth

The Midwest's Fresh Water Solution

The Midwest is sitting on the resource that will shape the future, and it’s just beginning to think what it can do with it. No, it’s not oil. Nor iron, steel or farmland, the resources that powered its industrial-era economy. It’s water. Or rather, fresh water, the useful low-salt variety that is in increasingly short supply around the country and around the world. 

| By Richard C. Longworth

What's Ailing Midwestern Legislatures?

The Indiana legislature recently passed a bill, signed by Gov. Mike Pence that, in effect, authorizes businesses in that state to discriminate against gays and lesbians. Pence and the Indiana legislature claim the bill is meant to protect religious freedom, not to discriminate against any group. Not surprisingly, nobody believes them, especially as their's isn't the only Midwestern state passing this type of legislation. 


| By Richard C. Longworth

It's Politics Time Again in Iowa

It’s early days yet in Iowa. The state girls’ basketball tournament is barely over. Farmers won’t start planting the first corn or soybeans for another month yet. The last vestiges of snow still fringe some fields. But it’s never too early for politics in the state that seems to have a lock on the quadrennial jockeying for pole position in the presidential sweepstakes.

| By Richard C. Longworth

Chicago Picks a Mayor

Chicagoans, or at least a few of them, will vote next month in a mayoral election notable both for its importance and for its meager turnout. Either Mayor Rahm Emanuel or his challenger, Jesus (Chuy) Garcia, will be the next mayor. In a sense, it’s a shame they both can’t win.