updated 7/16/2008 5:13:49 PM ET 2008-07-16T21:13:49

On Memorial Day every year the nation’s eyes turn to Indianapolis, the center of a state with the nation’s most distinctive nickname—Hoosier—and some of its least distinctive borders, for a sports spectacle celebrating the knack for tinkering and 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. The image of its manufacturing base and sports heritage seems as antique as the bricks with which the Indianapolis Speedway was originally paved, though 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 precisely half the country’s manufacturing jobs are east of Indiana and the other half west, almost half are north and half south. Indiana itself 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 number two steel producer with its 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. Nor are Indiana’s days of innovation over. Just as it has attracted new teams and events to Indianapolis’s sports facilities, the small factories set amidst farm landscape or at the edge of small cities have become centers of advanced manufacturing innovation. And in 2006 a team of Purdue University undergraduates won the Rube Goldberg Machine Contest for the fourth year in a row, for a 215-step paper shredder.

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But there is one downside to a manufacturing economy: It is subject to sharp contraction in times of recession. The economic slowdown of 2000–02 was not by historic standards a major one, but jobs peaked in Indiana in May 2000 and, after bottoming out in July 2003, were still below the peak in 2006. More seem on the way: Toyota is going to build Camrys in a Suburu plant in Lafayette in addition to its plant in Gibson County, and Honda picked Greensburg, Indiana, over an Ohio site, for a new plant; Governor Mitch Daniels hopes to attract Honda suppliers and the planned HondaJet plant too. Cummins and American Commercial Lines opened new factories in 2007. 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. And so Indiana is turning to other things—especially life sciences, with biopharmaceuticals by Indianapolis-based Eli Lilly, university research at Purdue and IU, prosthetics and orthopedics, biofuels—to the point that Indiana was rated one of the nation’s top three life sciences centers by the Battelle Institute. Growth has been strong in metro Indianapolis, which with about one-quarter of the state’s population accounted for 60% of its population growth in 2000–06; it grew 9%, versus 2% in the rest of the state and population loss in the belt of counties east and north of Indianapolis which have long depended heavily on the Big Three auto companies.

Culturally, Indiana is like an earlier America; it retains some of the old norms that in the 1920s and 1930s brought 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 still doesn’t have the big 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 new construction projects: the pro basketball Pacers’ Conseco Fieldhouse, the new NCAA headquarters (the lease has been extended to 2039), a conservatory and the Indiana State Museum. In the 1990s Indianapolis Mayor Stephen Goldsmith, a Republican, pioneered the privatization of city services and cut taxes, while in the state Capitol four blocks away, Governors Evan Bayh and Frank O’Bannon, both Democrats, also cut taxes. But after 2000 job losses led to a revenue crunch, and there has been movement in the other direction.

The partisan patterns in Indiana state politics sometimes seem typical of an older America, with preferences anchored in the Civil War era and a small overlay of change from the union-organizing days of the 1930s. Indiana’s cultural conservatism has kept it Republican in presidential elections for the last generation, but it was a crucial 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 Lynds noted that Presbyterians had little to do with Methodists, but that was nothing next to divisions between Republicans and Democrats—in a state still peopled largely by 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 Democrats, and that split has persisted over generations and can still be seen in election returns today. Of the 26 Indiana counties carried by Bill Clinton in 1996, 18 were south of Indianapolis, most near the Ohio River. The others are clustered around industrial towns that were organized by the CIO unions, the United Steelworkers and the United Auto Workers, in the 1930s. 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; in the 1930s and since in some parts of industrial Indiana they have. But not so in other cities, including metro Indianapolis. Why not? One answer is that cultural identity and personal values tend to be permanent and so have usually been the critical determinants of political allegiance in an America where economic status can often be changeable. Another is that the economic interests of Indiana’s high-skill workers and its small and large factory owners are not necessarily as adversarial as academics suppose.

Indiana’s partisan allegiances have remained remarkably steady. There is an historic base here large enough to allow Democrats to win: Evan Bayh broke a 20-year Republican hold on the governorship in 1988, with his strongest support from southern Indiana and the far northwest industrial zone. His successor, Democrat O’Bannon—from a Butternut town near the Ohio River—with similar moderate policies beat Indianapolis’s Goldsmith 52%-47% in 1996 and Congressman David McIntosh by 57%-42% in 2000, with voting patterns much the same as in 1988. In 2004 Republican Mitch Daniels beat Democrat Joe Kernan, who had succeeded O’Bannon after his death in September 2003, by 53%-45%. Daniels carried 75 of 92 counties, losing in the three Lake Michigan counties and Kernan’s home town of South Bend, in a few industrial counties (Muncie, Terre Haute, Evansville) and one university county (Bloomington), in Indianapolis’s Marion County (but he carried the suburban counties by much wider margins) and nine smaller counties, all but two of them south of Interstate 70 which bisects the state. But two policies that Daniels pushed through the Republican legislature provoked an uproar—the leasing for 75 years of the North Indiana Toll Road to Spanish and Australian companies and the adoption of Daylight Saving Time. Indiana has always straddled the Eastern and Central time zones, with most counties in Eastern time not observing Daylight Savings. Few issues impinge so closely on personal lives, and several counties ended up outside the time zone they wanted. Democrats put up an outcry and gained three seats in the state House, enough for a 51–49 majority, the sixth time control of the state House has changed in 20 years; the state Senate remains solidly Republican. Republicans won the offices of secretary of state, auditor and treasurer. But the biggest impact may have been in U.S. House races. Democrats picked up three seats here, one anchored in industrial South Bend and two in Butternut territory, adjoining the Ohio River. The Democrats’ county percentages there look very much like those of Bayh and O’Bannon—or of Butternut Democrats in the late nineteenth century.

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