Indiana

Every year on Memorial Day, the nation’s eyes turn to Indianapolis, the center of a state with the nation’s most distinctive nickname—the Hoosier State—for a sports spectacle celebrating the taste for powerful machines that make the Midwest the nation’s manufacturing center—the Indianapolis 500. This combination of sports and manufacturing is symbolic of Indiana’s historic strengths and successes. Its industrial base and sports heritage sometimes seem as antique as the bricks that originally paved the Indianapolis Speedway, where all but one yard at the start-finish line has long since been asphalted. The Speedway is literally at the center of American manufacturing: Almost half of the country’s manufacturing jobs are east of Indiana and the other half are west, almost half are north and half are south. Indiana has the nation’s highest percentage of workers in manufacturing—20% in 2005—and the highest percentage of gross product attributable to manufacturing. It is the No. 2 steel producer in the country, with giant, heavily automated steel mills on the south shore of Lake Michigan and mini-mills scattered across the state. Indiana leads the nation in making elevators, refrigerators, engines, engine-electrical equipment, recreational vehicles, mobile homes, and truck and bus bodies. It gave the world canned pork and beans, tomato juice, the Coca-Cola bottle, and Alka-Seltzer. It has big General Motors and Chrysler plants and newer Toyota, Subaru, and Honda plants.

The downside of a manufacturing economy, apparent in the second half of 2008, is that it is prone to sharp contraction in a recession. Indiana managed to recover from the 2000-01 recession and was generating new jobs while neighboring states were losing them in 2006 and 2007. Growth was strong in metro Indianapolis, which with about one-quarter of the state’s population accounted for 64% of its population growth from 2000 to 2007. Cummins and American Commercial Lines opened new factories in 2007, and Honda’s plant in Greensburg opened in 2008. But manufacturing is increasingly capital-intensive. Indiana continues to churn out huge tonnages of steel to meet Chinese demands, but with only 19,000 workers. The recession of 2008 hit particularly hard in a state that ranks third nationally in auto-related manufacturing. Unemployment skyrocketed in November and December 2008, when the Detroit Three auto companies were threatened with bankruptcy. Indiana was projected to lose 147,000 jobs if the carmakers slid into Chapter 11. The jobless rate was especially high at year’s end in Elkhart, which bills itself as the RV capital of the world. The bright spot for Indiana was that it has slowly been turning to other industries, especially life sciences. Biopharmaceutical development was under way at Indianapolis-based Eli Lilly; prosthetics, orthopedics, and biofuels were also growing—to the point that Indiana has been rated the nation’s No. 3 or No. 4 life-sciences state in recent surveys.

Culturally, Indiana is like an earlier America. It retains some of the old norms that in the 1920s and 1930s attracted sociologists Robert and Helen Lynd, in their search for the typical American place, to “Middletown” (actually Muncie). Ethnically, Indiana seems like an earlier America too. Except for the steel area around Gary—really an extension of the Chicago metropolitan area—Indiana has relatively few descendants from the 1840-1924 wave of immigration and only a small flow of recent Hispanic or Asian immigrants. But it does have religious diversity, with 109 denominations, according to the Glenmary Center. Only six states have more. The major metropolitan area, Indianapolis, now has 1.6 million people but doesn’t have the distinct singles and gay neighborhoods of larger cities. What it does have is one of the nation’s largest foundations, the Lilly Endowment, which gives much of its money locally, and a willingness to create and innovate. In the 1980s, the Lilly Endowment urged Indianapolis to make itself a sports center. The city attracted the Colts professional football team to the Hoosier Dome, now the RCA Dome. In the late 1990s, Indianapolis’s downtown filled with construction projects: the professional basketball Pacers’ Conseco Fieldhouse, the new National Collegiate Athletic Association headquarters, a conservatory, and the Indiana State Museum. To cap it off, Indianapolis will host the 2012 Super Bowl.

The partisan patterns in Indiana state politics sometimes seem typical of an older America, too, with preferences anchored in the Civil War era and the union-organizing days of the 1930s. It was a crucial target state from the Civil War to the New Deal in the struggles between Republicans and Democrats. Party identification was handed down like religious affiliation—the Lynd research team noted that Presbyterians had little to do with Methodists, but that was nothing next to divisions between Republicans and Democrats. The people of Indiana, by and large, are descendants of its original settlers, Yankees from Ohio and New England, and ‘‘Butternuts,’’ as they were called in the Civil War years, from Kentucky and the South. Most Yankees became Republicans and most Butternuts became Democrats, and that split has persisted over generations and been a factor in elections for state office from New Deal times until today. Those enduring traditions enabled Democrats to hold the governorship from 1988 to 2004 and to be competitive in state legislative elections. Democratic Sen. Evan Bayh has tended to run ahead in Butternut Indiana, whereas Republican Gov. Mitch Daniels fares well in Yankee Indiana. Two of the three U.S. House seats that Democrats captured in 2006 were in the Butternut south end of the state; the other was centered on industrial South Bend in the north.

At the presidential level, Indiana’s cultural conservatism and lack of a dovish tradition kept it in the Republican column for two generations. In 1964, it voted 56%-43% for Democrat Lyndon Johnson. But in the next 10 elections it was so resolutely Republican that it was never a target state for the Democrats, although the results were fairly close in 1976 and 1996. A main reason was that Indianapolis and the smaller factory towns were not as heavily Democratic as Detroit or Cleveland; indeed, they were usually Republican. In the 1920s the Lynds, liberal academics influenced by Marx’s idea that political beliefs were determined by economic interests, were puzzled why the factory workers in “Middletown” didn’t vote against the bosses. One reason may be that cultural identity and personal values tend to be permanent and so have usually been the critical determinants of political allegiance, especially in the United States, where economic status can often be changeable. Another factor may be that the economic interests of Indiana’s highly skilled workers and its small and large factory owners may not be as adversarial as academics suppose.

In 2008, for the first time in nearly 45 years, Indiana voted Democratic for president. A state that went 60%-39% for George W. Bush in 2004 voted 50%-49% for Barack Obama four years later. This was the biggest swing in any of the 50 states, and is the product of many factors. The Obama campaign targeted Indiana from the beginning, vastly outspent the opposition, registered new young voters, and made inroads in the ailing industrial towns that had resisted Democratic nominees for many years. Metro Indianapolis, like metro Columbus, Ohio—which has a similar economic base and Republican past—moved sharply to the Democrats, particularly among affluent and better-educated voters. Obama did not run particularly well in the Butternut counties, but made up for it farther north in auto-dependent towns such as Fort Wayne, Anderson, and Muncie. Indiana began voting much more like Ohio and southern Michigan and less like the Great Plains states.

However, this did not hold true all the way down the ballot. Republican Gov. Mitch Daniels, who was George W. Bush’s first-term budget director, was re-elected by a solid 58%-40% even as Obama was carrying the state, a considerably bigger victory than Daniels’s initial 53%-45% win in 2004. The victory was all the more remarkable because two of the governor’s policies were hugely controversial: the leasing for 75 years of the North Indiana Toll Road to an Australian-Spanish consortium and the adoption of daylight saving time. Indiana straddles the Eastern and Central time zones, with most counties in the Eastern time zone choosing not to observe daylight saving. Few issues impinge so drastically on personal lives, and several counties ended up outside their preferred time zone under Daniels’s policy. Democrats put up an outcry, and in 2006 the party gained three seats in the state House, enough for a 51-49 majority, while the state Senate remained solidly Republican. For a time, Daniels posted low job-approval ratings and seemed vulnerable. But he emphasized his Indiana Economic Development Corp. which committed $700 million in incentives to bring a promised 75,000 jobs to the state, and a property-tax law that increased the sales tax by 1% but decreased the burden on local government.