Blog ››› ››› ALEX MORASH
The Wall Street Journal's editorial board praised Donald Trump's running mate, Gov. Mike Pence (R-IN), for economic growth in Indiana during his time in office -- ignoring the paper's own reporting that the state's growth "resembles overall U.S. performance under Obama."
The Journal’s editorial board heaped praise on Pence’s handling of the Indiana economy on July 20, pointing to the governor’s conservative policies as something “the rest of the country could emulate” -- dismissing President Obama’s economic record as part of the reason for the state’s success and ignoring the paper’s own reporting that the state’s growth “resembles” national trends. The Journal touted the point that under Pence, Indiana’s unemployment rate dropped from 8.4 percent to 5 percent, also noting that he cut income taxes from 3.4 percent to 3.3 percent and has amassed a budget surplus (emphasis added):
President Obama visited Elkhart, Indiana, on June 1 to tout the state’s economic recovery, taking credit for its success and claiming that it represents the 2016 election’s basic policy choice. He’s right, but the economic lessons speak better of GOP Governor and vice presidential nominee Mike Pence and his predecessor Mitch Daniels than they do Mr. Obama’s policies.
All states have seen declines in the jobless rate, and Indiana’s has fallen to 5% in May from 8.4% in 2013 when Mr. Pence became Governor. The Indiana difference is that the rate has fallen even as the labor force has increased by nearly 187,000. Many states have seen their jobless rates fall in part because so many people have left the labor force, driving down the national labor participation rate to lows not seen since the 1970s. The Illinois workforce has grown by only about 71,000 in the same period, though it is roughly twice as large. Indiana is adding jobs fast enough that people are rejoining the workforce.
Mr. Pence has continued the progress, cutting taxes every year of his tenure even as the state has continued to pile up budget surpluses. He cut the individual tax rate to 3.3% in 2015 from 3.4% and it will fall to 3.23% in 2017, the lowest in the Midwest, according to the Tax Foundation. One reason the tax rate can stay so low and flat is because it applies to a relatively broad base of income with fewer loopholes than more steeply progressive tax codes.
The Journal’s editorial board claimed the job growth seen in Indiana is “different” because “the [unemployment] rate has fallen even as the labor force has increased,” an idea dismissed by Politico on July 19, which wrote “the drop in Indiana’s unemployment almost perfectly mirrors the national trend. And the labor force has grown in all but nine states.” A report by the Associated Press (AP) also found that the state’s unemployment rate “largely paralleled the national mark.” The parallel unemployment trends can even be seen in the Journal’s own graph from a July 16 article that undercuts Pence's ownership claim of Indiana's recovery:
The Journal’s rhetoric resembles praise Trump had for Pence’s handling of the Indiana economy -- which so closely mirrors the U.S. economy that MSNBC’s Steve Benen argued if Pence did a “great job producing economic results, by Trump’s own reasoning, it’s hard not to consider Obama an amazing success.”
The Journal’s editorial board touted Pence’s income tax cut, but upon closer inspection by the AP, that tax cut works out to be a mere $85 for someone making $50,000 a year. The AP also called into question the budget surpluses the Journal praised, reporting that Pence’s surpluses drew criticism after an infrastructure crisis in which opponents blamed “a handful of roadway deaths on Pence’s desire to build a budget surplus at the expense of properly funding infrastructure.” (The willingness of Republican governors to raid infrastructure funding to fill budget gaps created by trickle-down tax cuts has been well-documented.)
Pence has also been accused of politicizing Indiana’s health budget. On June 6, 2015, the Chicago Tribune reported on one of the Indiana towns facing an opioid crisis and how Pence’s “war on Planned Parenthood” inadvertently created an “exploding HIV outbreak” in his state. When Indiana Republicans cut funding for Planned Parenthood, they cost some parts of the state their only HIV testing centers, leading to an outbreak of the virus among intravenous drug users and their sexual partners and forcing the state to eventually provide emergency funding for needle exchange programs.
Other Republican-led states have seen their economies falter after implementation of conservative policies; Kansas and Louisiana have been devastated by Gov. Sam Brownback's and former Gov. Bobby Jindal’s trickle-down economics -- Brownback’s Koch-backed tax cut program has been particularly destructive. Like Pence, Ohio Gov. John Kasich claimed his conservative policies led to an economic “miracle” for his state, but it is easy to demonstrate how Ohio’s economic recovery pre-dated his term of office and is also largely following the national trend.