By MIKE MAGEE
“Hoosiers receive heroes’ welcome in return to Bloomington” screamed last week’s ESPN headline, as IU claimed top spot in college football nationwide. It’s been awhile since sports elevated that state’s mood.
In his classic review of the famous movie, “The Hoosiers,” Roger Ebert writes, “This is a movie about a tiny Indiana high school that sends a team all the way to the state basketball finals in the days when schools of all sizes played in the same tournaments and a David could slay a Goliath. That’s still the case in Indiana.”
That final sentence came to mind last month, as the Midwestern state with a population of around 17 million (17th in the nation) punched above its political weight and landed headlines like this one on December 11, 2025 in The Hill – “Indiana Senate rejects new House map, defying Trump.”
Some facts were clear: Twenty-one Indiana state senators had joined all 10 Democratic state senators to defeat a proposed redistricting map that would have assured a gain of 2 additional House of Representative seats for Republicans in the 2026 mid-term elections. But most political pundits misread why they did it, and ignored a crucial economic report from 10 months earlier that informed their actions. More on that in a moment.
First a bit of history. A century ago, Eli Lilly Jr. (grandson of the founder of the famous pharmaceutical giant Lilly & Co.) cut a deal with the University of Toronto to be the sole supplier of their life-saving drug – insulin. Headquartered in Indianapolis, Indiana, they were ideally positioned because the state’s three economic pillars were manufacturing, agriculture, and health sciences.
To secure adequate supply of insulin was both a scientific and logistic challenge of historic proportions. Eli Jr.’s focus on line manufacturing helped. Raw material demands required the design of a refrigerated railway support system dead ending at Lilly manufacturing sites. This was made necessary since purifying 8 ounces of insulin required two and a half tons of beef or pork pancreas readily available from state farms. Sourcing the raw materials locally was not a problem. At the time, 86% of the state’s lands were controlled by 195,786 farming families committed to farming (including livestock management and slaughter houses).
Fast forward a century and the state remains heavily dependent on its tripartite pillars – manufacturing, agriculture and health sciences. That was the message broadcast with great political effect on April 15, 2025 in a first ever economic forecast update from Muncie, Indiana, the home of Ball State University and its’ well-respected Center for Business and Economic Research led by Michael J. Hicks, PhD. For over 50 years CBER has published “data-rich, nonpartisan research relevant to communities and businesses throughout Indiana.” Their reputation is built on one word – trust.
On January 16, 2025, CBER released its heavily anticipated 2025 forecast for the state economy. Local politicians and the business community were encouraged by the projection of 2.5% GDP growth and the addition of 37,000 jobs with Dr. Hicks notation, “This the strongest forecast I have provided since arriving at Ball State.” But the small print included a warning: “The direction of domestic fiscal policy, especially tariffs, adds an unusually high level of uncertainty to this forecast.”
On April 15, 2025, bells began to ring off the hook south of Muncie in the capital, Indianapolis, minutes after CBER posted CBER Forecast Update: Indiana in 2025. In its opening, Hicks stated that Trump’s economic policy actions “merit a substantial revision of the 2025 forecast” for the state. They were now able to calculate an “eightfold increase in taxes on imports and production for Indiana’s manufacturing firms amounting to a trade weighted average tariff tax of 22.3%.”
To drive home how devastating this was for their state, three points were highlighted:
The total Trump tariff tax equaled the state’s projected general fund revenue for the entire year.
The project tax rate matched those tied to the Smoot-Hawley Act tariffs that triggered the Great Depression of 1930.
The uncertainty and risk to their state’s economy had already resulted in a 3-month decline in help-wanted ads of 26%.
Compared to the former analysis, the GDP growth showed a 4.5% downward swing, from +2.3% to -2.0%, and a 92,000 job shift from +37,000 to -55,000, including the loss of 19,000 manufacturing jobs. Unemployment, the report said, would rise to just under 6% by the end of the year.
According to state economists, Indiana was a sitting duck for outsize negative economic impacts of a Trump second term. The combination of Trump tariffs and the One Big Beautiful Bill that Republicans were forced to accept and push thru, would destabilize its tripartite economy in the following ways:
Manufacturing: Beyond tariff related increased costs in parts for automobiles, machinery and construction, disruption of supply chains and interruptions in inventory management would be difficult to reverse. Delays and rising prices would likely lead to retaliatory tariffs and declining demand for Indiana products shifting to overseas customers.
Agriculture: Export markets for Indiana’s three major agricultural commodities – corn, soybeans and pork – had already been severely impacted the state’s farm community. ICE immigration policy negatively impacted workforce availability, compromising productivity and competitiveness.
Health Care: Indiana residents were outsized consumers of ACA benefits in the form of Medicaid expansion and federal ACA Marketplace policies with subsidies up to 400% of the Federal Poverty rate. Loss of those subsidies in January, 2026, was now projected to raise ACA insurance premium rates for 300,000 Hoosiers an average of 31.14%
It’s summary warned wasn’t subtle: “Indiana is now entering economic conditions that are recessionary, and will be so until sometime after tariffs are substantially reduced, and freer conditions for trade are reestablished. . . This is a policy induced downturn.”
This toxic brew of bad financial news bubbled along over the next seven months as Republican leaders in the state house grew increasingly resentful that their Republican Congressional leaders were marching in lock-step with the President they had helped elect by a whopping 20% margin just 13 months earlier.
Adding insult to injury, President Trump was personally demanding that they pass an unpopular redistricting plan to gain an additional two House seats in the 2026 elections. The day before the December 10th vote, at 8:27 PM he threatened the state’s Republican lawmakers on Truth Social with these words: “Anybody that votes against Redistricting, and the SUCCESS of the Republican Party in D.C., will be, I am sure, met with a MAGA Primary in the Spring.”
Not lost on anyone was the fact that this was the state of Vice-President Mike Pence who had come to the rescue on January 6, 2020, as presiding officer of the Joint Session of Congress confirm the legitimate results of the 2020 election.. His actual words had included this scold directed at their current tormenter: “I am proud of my role. . . almost no idea is more un-American than the notion that any one person could choose the American president…The presidency belongs to the American people and the American people alone.”
The state house vote on December 11, 2025, rejected redistricting and was defined by news outlets nationwide as a “major blow to President Trump.”
Reporters across the nation rushed in to try to explain “Why take a stand now?” The following day, the Huffington Post did its best to explain why with an article titled, “These are the Indiana Republicans who voted to crush Trump’s redistricting plan.” In true Hoosier fashion, Sen. Sue Glick from LaGrange, Indiana spoke for her colleagues when she offered her slant, “Hoosiers are a hardy lot, and they don’t like to be threatened. They don’t like to be intimidated. They don’t like to be bullied in any fashion.”
But the real answer lies closer to the capital of Indianapolis – Muncie, the home of Ball State University’s CBER. As Director Michael Hick’s had projected so clearly months earlier, “This is a policy-induced downturn.”
Mike Magee MD is a Medical Historian, the author of CODE BLUE: Inside America’s Medical-Industrial Complex. (Grove/2020) and a regular contributor to THCB
Leave a comment