Trader Steven Rickard reacts in the S&P 500 futures pit at the CME Group in Chicago near the close of trading, Thursday, May 6, 2010. The stock market has had one its most turbulent days ever with the Dow Jones industrials plunging nearly 1,000 points in half an hour before recovering two-thirds of its losses. (AP Photo/Kiichiro Sato)
Indianapolis is getting played by the Chicago Mercantile Exchange.
On Friday, Indianapolis Mayor Greg Ballard left a U.S. Conference of Mayors water council meeting to talk to Merc officials about moving the exchange to Indiana’s capital. Last week, the Illinois House rejected a corporate tax break for the Merc, 99-8. So the exchange is looking for a new suitor to give it leverage with Illinois politicians. The trading pits would stay in Chicago, but the electronic exchange and headquarters would move to Indiana.
“I think it would be a tremendous win for the city, but it’s preliminary right now,” Ballard told the Indianapolis Star. “They’re looking at other places, too. They know how we’re going to be flexible to try to accommodate all their needs, but the decision’s up to them, and I don’t want anybody to get the impression that anything’s immediate.”
The Star speculated that the Merc “is just using Indianapolis in a high-stakes bluff with Illinois over that state’s raising of corporate taxes.”
Exactly. The Merc moving its offices to Indianapolis is as likely as the New York Stock Exchange relocating to Pittsburgh. It’s not just that the Merc has a long history in Chicago, dating back to its founding in 1898 as the Butter and Egg Board. It’s that the talent needed to run the exchange isn’t going to want to live in Indianapolis. I’m sure quite a few transfers would tell the boss to stuff it before relocating from Chicago to Indy. And I’m just as sure that recruitment would be much, much more difficult. Today, many bright young college graduates choose their city before choosing their job. They’ll move to Chicago, an Alpha World City with all four major sports, five-star restaurants, and an internationally-renowned theater scene. In India-no-place, the Merc will get the cream of the Purdue University’s Krannert School of Management.
Indiana is a lower-tax state than Illinois, but that’s one reason its only claim to notoriety is taking up space between Chicago and Cincinnati. As one online wag suggested, Indiana’s motto should be “Drive Through Here To Get Someplace Interesting.” Hoosiers don’t invest in education or culture to the extent that Illinois does. Illinois has a higher percentage of college graduates than the national average.
Indiana is below the mean. See if you can find the workers you need in that talent pool.
The Merc can moan all it wants about the burdens of doing business in a high-tax state, but it couldn’t do business anywhere else.
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