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Indiana State Quarter

The total gross state product in 2005 was US$214 billion in 2000 chained dollars.[1] Indiana's per capita income, as of 2005, was US$31,150.[2] A high percentage of Indiana's income is from manufacturing.[3] The Calumet region of northwest Indiana is the largest steel producing area in the U.S. Steelmaking itself requires generating very large amounts of electric power. Indiana's other manufactures include pharmaceuticals and medical devices, automobiles, electrical equipment, transportation equipment, chemical products, rubber, petroleum and coal products, and factory machinery.

Contents

History

Indiana's earliest economy revolved around trade with the Native American tribes in the northern and central parts of the state. The state government established a trading monopoly with the tribes who became the primary purchasers of Indiana's goods. Economic growth was slow to begin in the state, primarily due to the inability to ship goods to market in a cost effect way. After the Mississippi River was opened to American traffic following the Louisiana Purchase, agricultural grew rapidly in the state, but was still hampered by the lack of internal transportation in the state.[4]

The Indiana General Assembly attempted to remedy the transportation system in the late 1810s, but was thwarted by the Panic of 1819 which caused the state's only two banks to collapse. A second attempt was launched in the early 1830s leading to the passage of the Mammoth Internal Improvement Act. The state funded the creations of canals, railroads, and roads across the state resulting in large rise in land and produce values. Although the spending bankrupted the state, the foundation it provided allowed Indiana to grow into one of the leading farming states by the 1850s.

The 1860s and the American Civil War led to the rapid completion of the state's railroad system and the growth of small industry. Building railroad cars and glass manufacturing became the state early leading industries, primarily in the central parts of the state. Southern Indiana, however was adversely affected by the war and never fully recovered. Prior to the war, the largest cites were along the Ohio River and had a thriving trade with the south and large ship building centers that languished in the war. In most of the state, the war led to a rise in the value of farm produce and significantly raised the state's standards of living.[5]

The post-Civil War period was a difficult time for industrial workers in Indiana. Like workers elsewhere in the country, Indiana miners and factory workers were often underpaid. They worked under dangerous conditions, and they went jobless during economic recessions, such as those of 1873 and 1893. Many workers joined the farmers in supporting the Greenback Party and similar parties. Some workers joined such labor organizations as the Knights of Labor, the American Federation of Labor, the United Mine Workers of America, and the American Railway Union, which was led by Eugene V. Debs of Terre Haute.

Beginning about 1890, Indiana was swept by a second wave of industrial growth that ransformed it into a predominantly urban, industrial state by 1920. Growth began with the Indiana Gas Boom in mid 1880s leading to rapid development in the east-central parts of the state.[6] The trend continued during the period of expansion and as the focus moved primarily to heavy industry, especially in the Calumet region of northwestern Indiana. Before 1889, when a large oil refinery was built at Whiting, the Calumet was a sparsely populated strip of swamps and sand dunes. In 1905 the Calumet received its major push to development when the United States Steel Corporation decided to locate its Midwestern mills there. The next year U.S. Steel laid out the city of Gary, naming it after its chairman of the board, Elbert H. Gary. By 1920 the Calumet was one of the leading industrial centers in North America.

Indiana farmers prospered in the early years of the 20th century and during World War I (1914-1918). After the war, however, inflated costs and declining prices contributed to a farm recession that continued through the 1920s. Industrial workers fared better, although there were bitter strikes in Indiana’s coal and steel industries and on the railroads in the years just after the war. The 1930s, a time of worldwide economic depression, were difficult for most Hoosiers. There was widespread unemployment, particularly in the southern part of the state more than half the residents were without jobs during the worst years.[7] Federal and state aid programs were undertaken. In January 1937, natural disaster added to Indiana’s difficulties when the Ohio River flooded much of southern Indiana. Hundreds of Indianans died in the flood, and property damage was estimated at hundreds of millions of dollars. Indiana’s economy, like that of the nation, underwent a resurgence during World War II (1939-1945). A great range of goods was produced in the state’s factories, including tanks, airplanes, guns, and communications equipment.

Continued prosperity marked the postwar era. Manufacturing remained the leading economic activity, and farming continued to become increasingly mechanized. Although farm production increased, the number of farm workers declined. The total number of farms also decreased, often because small farms were merged to form larger, more efficient units. Indiana’s economic growth slowed during the national economic recessions of the 1980s, mostly because of a deep slump in production by heavy industry. By 1983, the state’s unemployment rate was about 12 percent, one of the highest in the nation. In the early 1980s, many farmers went deeply into debt and hundreds of farms went out of business. The state’s economy recovered in the late 1980s as some manufacturing industries made comebacks and as community, social, and personal service industries grew rapidly.[8]

During the early years of the 1990s, Indiana’s economy continued to improve as service activities grew in the larger metropolitan areas and the state’s pharmaceutical and agricultural chemical industries underwent major expansions. Already Indiana had replaced Pennsylvania as the nation’s leading steel producer, and the port commission’s deepwater port on Lake Michigan, as well as its two river ports in southern Indiana, developed substantial international and national traffic. Indiana’s generally strong economy generated record low unemployment figures and a large budget surplus, considerably in excess of $1 billion. The state’s income was augmented by revenue from newly instituted venues for gambling (at racetracks and riverboat casinos) and a state lottery begun in the late 1980s.[9]

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Economic Stimulus plan

Indiana got its share in the economic stimulus plan suggested by president Barack Obama, receiving about 4.3$ billion dollars:[10] divided:

  • $1.3 billion for education
  • $1.4 billion for Medicaid
  • $658 million for state and local transportation and/or infrastructure projects
  • $100 million for housing
  • $100 million for water quality
  • $400 million for nutrition
  • $70 million for energy
  • $70 million for employment services
  • $40 million for child care
  • $40 million for justice-related projects

Governor Daniels was adamant about not using federal stimulus money to prop up the budget, warning that spending the money on regular expenses instead of one-time projects will leave the budget in worse shape when the stimulus ends in two years. Daniels had signaled support for budgeters' proposal to pump some stimulus money into schools to give them a needed boost, while holding some federal cash in reserve to create a fiscal glide path once the stimulus goes away.[11]

Sectors

Energy

All the electricity generated in Indiana in the early 21st century came from steam-driven power plants fueled by coal. Although western Indiana has an abundance of coal, its high sulfur content has encouraged some utilities to bring in coal from Wyoming. Most of the plants are operated by privately owned utilities. In 1984 the construction of two nuclear power plants was abandoned because of escalating costs. Most steam driven power plants are located along the Wabash and Ohio Rivers.

Indiana has six hydroelectric dams. The Norway and Oakdale Dams near Monticello provide electrical power, recreation, and other benefits to local citizens. The Norway Dam created Lake Shafer and the Oakdale Dam created Lake Freeman. The Markland Dam, on the Ohio River, near Vevay, Indiana also produces electricity. The city of Wabash was the first electrically lighted city in the country.

Indiana is becoming a leading state in the production of biofuels, such as ethanol and biodiesel. Indiana now has 12 ethanol and 4 biodiesel plants located in the state.[12] Reynolds, located north of Lafayette is now known as BioTown, USA. The town is experimenting with using biofuels and organic fuels, such as those made with manure, to power the town.[13]

Solar power and wind power are being investigated, and geothermal power is being used commercially. New estimates in 2006 raised the wind capacity for Indiana from 30 MW at 50 m turbine height to 40,000 MW at 70 m, which could double at 100 m, the height of newer turbines.[14] As of the end of June, 2008, Indiana has installed 130 MW of wind turbines and has under construction another 400 MW.[15]

Sources of energy (2009)
Fuel Capacity Percent of Total Consumed Percent of Total Production Number of Plants/Units
Coal 19,500 MW 63.0000 % 88.5000 % 24 Plants
Natural Gas 2,100 MW 29.0000 % 10.5000 % 15 Facilities
*Often used in Peaking Stations
Petroleum 575 MW 7.5000 % 1.5000 % 10 Units
Wind 130.5 MW  ?  ? 1 Farms/87 Towers
(1 additional farm under construction)
Hydroelectric 64 MW 0.0450 % 0.0100 % 1 Plant
Biomass 28 MW 0.0150 % 0.0020 % 1 Facility
Wood & Waste 18 MW 0.0013 % 0.0015 % 3 Units
Geothermal and/or Solar 0 MW 0.0 % 0.0 No Facilities at this time
Nuclear 0 MW 0.0 % 0.0 1 facility never completed

Agriculture

Agriculture is an important industry in Indiana which is part of the Corn Belt. Some farm products produced are: corn, wheat, oats, hay, and soybeans. Livestock production includes: cattle, hogs, poultry, and sheep. Corn is the leading crop grown in Indiana. In 1997, two-fifths of all cropland was planted in corn. One-half of all crop income usually comes from the sale of corn, but even this underestimates the true importance of corn, since much of it is not sold, but is instead fed to livestock. Much of Indiana’s corn crop is fed to hogs on the farms where both are raised. The significance of soybeans has increased in recent years, approaching corn in terms of value and amount produced. Wheat and vegetables, especially tomatoes for processing, are also important crops. In addition, Indiana is noted as one of the few producers in the United States of spearmint and peppermint, grown mostly in the northwest. In 1997 Indiana ranked ninth in sales of all crops, but fourth in sales of soybeans and fifth in sales of corn.

Pharmaceuticals & Medical Devices

Indiana is home to the international headquarters of pharmaceutical manufacturer Eli Lilly in Indianapolis, the state's largest corporation. Mead Johnson Nutritionals, a subsidiary of Bristol-Myers Squibb, in Evansville is another large producer. Elkhart has also had a strong economic base of pharmaceuticals, though it has decreased over with the closure of Whitehall Laboratories in the 1990s and of the large Bayer complex, announced in late 2005.[16] Overall, Indiana ranks fifth among all U.S. states in total sales and shipments of pharmaceutical products and second highest in the number of biopharmaceutical related jobs.[17] Medical device manufacturers include Zimmer in Warsaw, Roche Diagnostics in Indianapolis, and Cook in Bloomington.

Mining

In mining, Indiana is probably best known for its decorative limestone from the southern, hilly portion of the state, especially from Lawrence County. One of the many public buildings faced with this stone is The Pentagon, and after the September 11, 2001 attacks, a special effort was made by the mining industry of Indiana to replace those damaged walls with as nearly identical type and cut of material as the original facing.[18] There are also large coal mines in the southern portion of the state. Like most Great Lakes states, Indiana has small to medium operating petroleum fields; the principal location of these today is in the extreme southwest, though operational oil derricks can be seen on the outskirts of Terre Haute.

See also

Notes

  1. ^ Bureau of Economic Analysis: Gross State Product
  2. ^ Bureau of Economic Analysis: Annual State Personal Income
  3. ^ "Indiana Economy at a Glance". U.S. Bureau of Labor Statistics. http://stats.bls.gov/eag/eag.in.htm. Retrieved 2007-01-11.  
  4. ^ Gray, p. 3–4
  5. ^ Gray, p. 202
  6. ^ Gray, p. 187–188
  7. ^ "Indiana History Chapter Nine". Indiana Center for History. http://www.centerforhistory.org/indiana_history_main9.html. Retrieved 2008-05-17.  
  8. ^ Agriculture in Crisis: The U.S. failed farms
  9. ^ Indiana in the 90's: From recession to ultra-success
  10. ^ Council of State Governments
  11. ^ Indy's News Center
  12. ^ Biofuels Indiana
  13. ^ About BioTown
  14. ^ Indiana's Renewable Energy Resources Retrieved 20 August 2008
  15. ^ U.S. Wind Energy Projects - Indiana Retrieved 20 August 2008
  16. ^ WNDU-TV: News Story: Bayer is leaving Elkhart - November 16, 2005
  17. ^ "Economy & Demographics". Terre Haute Economic Development Co.. http://www.terrehauteareaedc.com/econ_industry.htm. Retrieved 2007-01-30.  
  18. ^ Pentagon Renovation Program

References

External links



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