The Three “I”s

Let’s deconstruct the issue of economic growth.

If there is one thing all politicians support, at every level of government, it is growing the economy. Unfortunately, few of those political figures recognize the economic effects of their other policy preoccupations. Here in Indiana, that disconnect was on vivid display during then-Governor Mike Pence’s effort to privilege religious discrimination against LGBTQ citizens; it was equally obvious in North Carolina in the wake of the so-called “bathroom bill.”

It’s somewhat less obvious–but no less consequential–in Trump’s efforts to slash the budget and to drastically reduce immigration. A recent report from the Brookings Institution considered what it would take to achieve 3% growth in GDP, if that level of expansion is even possible: “There are three I’s that can do this: immigration, infrastructure, and investment.”

Infrastructure is the most obvious: not only does America desperately need to improve our deteriorating roads and bridges, not only do we need massive improvements to rail and public transportation, but cities and states across the country need the jobs a comprehensive infrastructure program would generate. As the Brookings Report notes,

Infrastructure jobs are disproportionately middle-class (defined as wages between the 25% and 75% percentiles, so this is the real middle-class and not the upper-middle class; there is no Dream Hoarding going on here).

Investment is harder to discuss, because far too many lawmakers fail to distinguish between investment and  routine expense. Conceptually, however, most of us understand that we must invest in order to grow–it’s the difference between payments on your home mortgage and the amount you spent at that fancy restaurant. Trump’s budget may not reflect that understanding, but many lawmakers do recognize the difference. Unfortunately, many self-identified “fiscal hawks” do not.

We need to increase our nation’s investment in research, development, and people. The federal government’s investment as a share of total research and development has fallen to multi-generational lows. Increasing the federal government’s investment will not bust the budget. Currently, the federal government’s entire investment in R&D (as measured by the OECD) is equal to only about one-tenth of our nation’s defense budget. Investments like these have proven track records of increasing economic growth.

When it comes to the importance of immigration to economic growth, however, American xenophobia is far more influential than economic reality.

Comprehensive immigration reform, such as the bipartisan legislation which passed the Senate in 2013 (Schumer-Rubio), would increase our nation’s work force, bring economic activity out of the shadows and into the mainstream, increase our nation’s economic and physical security, and boost our GDP. One estimate sees an increase in $1.5 trillion in GDP cumulatively over the next decade, as compared to the status quo. That same study contrasts with the deportation-only policy that appears to be favored by some in the Trump Administration, which would reduce economic output by over $2 trillion.  Even scholars from the CATO Institute argue that immigration reform could be used to boost GDP, with an earlier estimate of an increase of over 1.25% of GDP.

As another Brookings report notes,

President Trump claims that legal immigration levels should be cut in half and that greater priority should be placed on those with high skills. Both of these claims fly in the face of census statistics that show that current immigration levels are increasingly vital to the growth of much of America, and that recent arrivals are more highly skilled than ever before. Current immigration is especially important for areas that are losing domestic migrants to other parts of the country including nearly half of the nation’s 100 largest metropolitan areas.

Well, that’s what happens when you elect a man who has no idea how the economy works, and for whom facts are meaningless…


  1. Amen to the need to get to 3% growth.
    Amen to the Brookings ‘I’ ideas for getting there.

  2. Republicans ignore this information and instead support tax cuts for the wealthiest and for corporations so they can “create the jobs necessary to get us to 3% annual GDP growth” because it has been such a successful strategy in the past.

  3. Regarding infrastructure, consider the effect of building the interstate highway system on the economy.

  4. It is frustrating that spending on bulking up the military (not the spending on caring for military personnel) seems ok to many at the expense of education, infrastructure, and care for the most vulnerable.

  5. Pat; also consider NOT building Interstate 69 here in Indiana. How much is that costing us daily; what is it costing travelers who must use that route daily? My family and I had to travel it on a Saturday this June; the start and stop traffic, in and out of blocked lanes and viewing the destruction of one of the once most beautiful areas in the state of Indiana has stayed in my memory banks. And let us never forget the Imminent Domain fiasco used by Daniels to force people from homes, farmlands and businesses over half the length of this state. There are always other “costs” than money. There is the cost in human rights.

  6. Good points on investment, with a special focus on infrastructure. We need to be careful not to overstate the economic case for any particular immigration level. What raises living standards is per capita growth. If the population grows by 1% and the economy grows by 2%, then welfare increases by about 1%. There are good reasons for immigration reform, but that immigrants add to aggregate, rather than per capita, economic growth is not one of them.

  7. What’s also really scary with respect to growth is out lackluster export performance. See Brookings:

    A chronic trade deficit leads to a shorfall in domestic demand because the funds circulate outside our country. This is one of the few real issues that Trump has identified (along with Obama and Bush in the recent past).

  8. We should not forget the effects of Corporate Welfare. Here in Indianapolis we have the Colts and Pacers. The taxpayers build, and maintain the stadiums and the Colts and Pacers receive the profits.

    Republican and Democratic Parties unite into the Republicrat Party in Indiana to further the interests of Corporate Welfare.

  9. Louie; per Republican Paul Ogden who comments here at times and has his own blog, 30% of the CIB budget supports the Colts!

  10. Louie; I forgot to ask if you remember that near the completion of construction of Lucas Oil Stadium, City officials then realized they had “forgotten” to include maintenance and security when they budgeted for their Colts’ “donation”.

  11. Despite all this, we live in a finite environment, with finite resources, and we have no other options, all pipe dreams and science fiction aside. The concept that population growth and resource extraction is the only path to or fuel for growth will inevitably lead us to catastrophe, physically and structurally as a society. Sustainability should be the word on our lips in every discussion of policy moving forward, including population control. Especially with regard to population control. Or our descendants will face a frightening, deprived future. But we are still looking for a chicken in every pot, essentially the nice way of saying that the mob is demanding of its leaders, “Feed my face, feed my face!”

  12. @Louie, the corporate welfare of which you speak, (i.e., the Pacers and the Colts) has another side, a very lucrative side that benefits Downtown Indianapolis and thousands of employees, especially local eateries, clubs, and hotels including Buca de Beppo, Scotty’s Brewhouse, St Elmo’s, Harry and Izzy’s, Weber Grill, Palomino’s, Fogo de Chão, Old Spaghetti Factory, The Slippery Noodle, Kilroy’s, McCormick and Schmick’s, Oceanaire, Ruth’s Chris, The Rathskeller, Café Patachou, Union 50, The Ram, Hard Rock Cafe, Nada, The Yard House, The Wild Beaver, The Capital Grille, JW Mariott, Maxine’s Chicken and Waffles, Mesh, and etc, etc, etc.

    If the Colts and the Pacers suddenly no longer existed in Downtown Indianapolis, just imagine how many jobs would be lost, imagine how many families would be impacted in a negative way from the closure or the layoffs from the countless employers among the above-mentioned restaurants, clubs, hotels. The result would be devastating to our Downtown area and to those who earn their livings or at least supplement their livings via Downtown jobs.

  13. BSH; what you say is true but…players and coaches earn salaries in the hundreds of thousands and/or millions. Why should my tax dollars, out of my barely above federal poverty level income, pay for their support and maintenance of their arena?

    My family are big Colts fans but cannot afford to go to a game; or eat in any of the establishments you named, but their tax dollars also support them.

  14. If sports stadiums are such a great economic investment, then let the proceeds reimburse the taxpayers for those stadiums.

    Funds were diverted from education and other badly needed infrastructure investments to pay for stadiums, arenas and teams. My priorities would use tax funds for WELL-funded schools, safe bridges and overpasses, repaired roads, well maintained parks, modern airports and hospitals, and a variety of public services like enough case workers in child protective services and enough firefighters and police officers. Since professional sports are so lucrative, why aren’t the teams for the recreation of those who can afford tickets helping to finance rather than divert funds from public necessities?

  15. @Nancy, try dealing with Indianapolis if suddenly the Colts and the Pacers were removed from the equation. Try dealing with a throwback scenario of Indianapolis before the Colts and the Pacers arrived. You do remember Downtown Indy and its bleak outlook before that time, don’t you?

    Surely you remember the late Mayor Hudnut’s being instrumental in bringing the Colts from Baltimore to Indianapolis. You do remember his being key to building the RCA Dome as a ‘build it and they will come’ venture/challenge. And, yes, they came, they came in the form of the Colts. And, during the following 32 years, Hudnut’s unique vision for Indianapolis as a major urban sports center came to fruition in 2012 with Super Bowl XLVI.

  16. Nancy – Your commentary is right on. We need to first fund public needs and even if we do manage to have some leftover money such funds could be disbursed to the taxpayers who provided the money in the first place via lowered taxes. I know the arguments about employment opportunities lost if we don’t ante up to sports corporations, but why don’t they borrow the money from banks and pay them back from their “profitable franchises” like other corporations do? Why local taxpayers, many of whom cannot afford to go to a game? If they borrowed the money from banks, we would still have great employment numbers but without public outlay and subsidy.

  17. Greetings BSH. What is done is done. Just suppose the great Hudnut had concentrated on bringing job creating indusries to the city instead of low paying service jobs that are only seasonal. No answer is required because history cannot be undone.

  18. @Irvin, apparently ‘The Great Hudnut’ had a vision for Downtown Indianapolis, the high-profile area that naturally grabs the attention of media outlets such as the New York Times and the Washington Post where the Editors salivate over such stories. Aside from being Mayor, Hudnut was a natural PR man, a natural Development Officer, both important leadership skills learned in Seminary for those wishing to grow churches or to grow cities – interchangeable skill sets, for sure.

  19. How about a fourth “I”. Innovation A function of education and R&D spending both private and public.

    The biggest challenge we face, which is completely beyond the capability of our present government, is preparing for a future completely different than what we have known. A sustainable future. A future the earth can afford.

    It will arrive either as a result of great governance or collapse.

    Every day this government stands in the way of great governance is another chip bet on collapse.

  20. BSH; none of us are talking…or thinking…about getting rid of the Colts or the Pacers. It is the questionable use of and the amounts of our tax dollars supporting millionaires and their arena. That 30% of the CIB Budget that goes to the Colts could have been used, at least most of it, to repair and replace our crumbling infrastructure or to prevent the loss of public education funds It might have prevented the increase in gas tax which we all now must pay.

  21. If the fans can’t support the stadium and arena, the Colts/Pacers ticket prices are artificially low and need to be increased to a level that can provide the Irsays and Simons and all players and coaches with their required level of income and quality of life rather than leaning on corporate welfare.

  22. The CIB has built upon the environs created by the great Hudnut! All praise Hudnut,halleluia! Our politicians have shown the public a superlative instinct for discerning of priorities! !! The Colts provide entertainment for 9 games a year here at home. Hell,we are still paying on the former RCA Dome that no longer exists,that is money well spent!! I can’t speak for anyone else,but I’m proud of the deplorable condition of our roads and bridges. Education? Pffft! Infrastructure? Who cares? Afterall,It is much better for the IPS system to be in bad shape than to have folks such as Irsay to have a sad! Without those public subsidies,how would Irsay have the ability to afford guitars and drums once owned by world renowned rock musicians? He wouldn’t and we are needed to fund his habits and wishes.

    Louie,you’re wrong and BSH is right. We don’t need good paying jobs. We need more of those MCjobs that are created by the restaurants downtown. What does a waitress make these days? I’m sure it’s enough to own a good home,car and put a couple of children through an expensive college education! Yes,downtown was once a wasteland, but is now an oasis of food,alcohol and entertainment. People come from all over the world to view our oasis. Moreover,the remainder of the city isn’t looking too good,but that doesn’t matter. We are a WORLD-CLASS City. Think Paris,London and Indianapolis! What is important is that DT be funded immensely to the detriment of the remainder of the city. IPS should be plundered–as it has been for decades. Go Colts and Go Pacers!!!

    *Sarcasm mode on high*

  23. Irvin: ” What is done is done. Just suppose the great Hudnut had concentrated on bringing job creating indusries to the city instead of low paying service jobs that are only seasonal. No answer is required because history cannot be undone.”

    But…but…Low paying service jobs provide dividends to the people who REALLY MATTER!

    Come to think of it,our former airport facility-( now a desolate concrete jungle) should stand as a testament–nay, monument– to the brilliance of our politicians.

  24. One more thing.

    If only Eagle Creek Park were as kept up as the Colts facility across the street from the park. The facility the Colts rent for a dollar a year. It’s no wonder our parks look like crap as well in recent years!!! Monies diverted. Abatements.Et al.


    But…..Go Colts!

  25. William; Hudnut was responsible for the Hoosier Dome and the Colts, Circle Centre Mall, he brought Thomson Electronics to the city, the United Airlines Maintenance Hub and Post Office Maintenance Hub to Indianapolis International Airport. When I returned to this city after living in Florida for 7 years, 5 1/2 of those years under Herr Goldsmith, the city had the RCA Dome, Colts still active, Circle Centre Mall was flourishing but Thomson Electronics and both maintenance hubs at the airport were all gone.

    Mayor Hudnut did leave that additional 1% food tax on downtown restaurants which still galls some older residents.

  26. William; oops, I forgot to mention the beautiful Canal Walk downtown, the Monon Corridor, the 500 Mile Race Mini-Marathon and I’m sure others can add to this list. They can also add to the list of deletions under Goldsmith.

  27. I would invite anyone who thinks Professional Sports is some kind of Goldmine for any city to follow the Web Site Field of Schemes:

    There is a section on the Web Site on the Pacers and Colts. Fair warning have a barf bag ready as the Web Site details all the subsidies the Colts and Pacers receive from the tax payers.

  28. Louie; I remember reading that, unlike other NFL teams, the Colts do not pay to use Lucas Oil Stadium for home games and that they receive a percentage of all concession stand profits during home games.

  29. @ irvin: “Just suppose the great Hudnut had concentrated on bringing job creating indus(t)ries to the city instead of low paying service jobs…”

    Hudnut DID CONCENTRATE on bringing job-robust businesses to central Indiana. That is what professional sports arenas do; they immediately put your city among the preferred cities on the international corporate expansion list. You can bet that every major corporation that has moved into central Indiana, and every corporation that has decided to stay, had Lucas Oil Stadium on their list of factors to consider. People who work for progressive corporations love cities with stadiums. Hudnut was wise enough to know that.

    City planners who know a thing or two consider sports arenas to be part of a city’s infrastructure. I am told that Lucas Oil Stadium rents for half-a-million bucks per weekend for other events and conventions, and that it is rented most weekends a year. Irsay gets none of that, but Indiana Stadium and Convention Building Authority
    (State of Indiana) does.

    The Colts are not listed as owner or operator of the stadium; they are listed as tenants.

    For those who whine about how that money would better be spent on music should read through the lists each year of the organizations who rent the stadium. Musical entities and events comprise nearly one-third of that list, and that does not even count all the concerts by entertainment stars.

    Here is a list of only those functions that are contracted to use it on a yearly basis:
    Bands of America Grand National Championships and Indianapolis Super Regionals
    Big Ten Football Championship Game (2011–21)
    Circle City Classic
    Drum Corps International World Championships
    FDIC International (Firefighting Convention)
    IHSAA Indiana State football championships
    ISSMA band state finals
    Monster Energy Supercross (since 2009)
    Monster Jam
    NFL Draft Combine
    National FFA Organization Convention (2016-2024)

    And upcoming events:
    Shamrock Series / Shillelagh Trophy
    Purdue Boilermakers vs Notre Dame Fighting Irish college football (September 2014)
    International Convention of Jehovah’s Witnesses (July 2014)
    NCAA Men’s Basketball Regional Finals (2009, 2013, 2014)
    NCAA Men’s Basketball Final Four (2010, 2015)
    Super Bowl XLVI and Madonna’s presentation in the halftime show (February 2012)
    National Catholic Youth Conference (2011, 2013, 2015)
    One Direction – On The Road Again Tour (July 2015)
    North American Youth Congress of United Pentecostal Church International (July 2017)

    And upcoming events
    NCAA Men’s Basketball Final Four (April 2021)
    General Conference Session of Seventh-day Adventists (June 25-July 4, 2020)
    National Catholic Youth Conference (November 2017)
    Gen Con 2017 (August 2017)

    And more will be squeezed in.
    And it all adds up to more than a dollar or two for much of central Indiana.

  30. The point is that if the sports franchises cannot support themselves with the income from ticket/suite/concessions/TV contracts, why should the taxpayers of the city with infrastructure needs that have been deferred for years have to pay even more to subsidize their businesses. The low wage jobs they create are held by residents who live in the neighborhoods with crumbling roads, regular flooding, failing bridges, neglected parks and high crime because the taxes they pay every day are spent to bolster the wealthy owners’ coffers. Chances are very good that the owners pay little if any taxes due to abatements, subsidies and deferments. They use all the infrastructure the taxpayer provides for their facilities while setting ticket/suite prices so high most of those same taxpayers cannot afford to attend any events held in those venues. It is corporate welfare. Any benefits from those gifts to them are sucking the life out of people and killing any dreams of upward mobility.

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