February 5, 2010 4:00 A.M.
Michigan’s Blueprint for America
Behold the cratering of an economy, courtesy of one governor’s Obamaesque policies,
Detroit — Most Americans are just getting warmed up to the idea of a self-centered chief executive who has divined America’s future as a green economy and is brashly installing the industrial-policy tools to get us there. But we here in Michigan have been living it since Gov. Jennifer Granholm took office in 2003.
On Wednesday night, the flashy second-term governor celebrated the “change” she’s brought to Michigan in her final State of the State address. Read it and weep.
Granholm entered office on the tired heels of a three-term Republican with a wave of good tidings as the state’s first female governor. Beautiful, silver-tongued, and Harvard Law–educated, Granholm was a young pol with little executive seasoning. Supremely self-confident despite her inexperience, Granholm raised income taxes (as the state’s economy literally and figuratively headed south), “invested” billions of stimulus dollars in infrastructure that she predicted would create tens of thousands of jobs, mandated renewable-power standards, and backed them up with millions in government subsidies to transform Michigan from “the Rust Belt to the Green Belt.” In her 2006 State of the State address, she promised that “in five years, you’ll be blown away.”
Four years in and it’s blowing hard, all right. Michigan’s unemployment rate has more than doubled, to over 14 percent. Yes, the state’s per capita income drop from 20th in the nation to 40th has tracked a historic restructuring of the state’s auto industry, but Granholm’s Obamaesque policy prescriptions have been anti-growth while fueling budget deficits to record highs.
In her speech Wednesday, the governor declared herself a visionary. “The contours of the new Michigan economy are . . . taking shape in communities across our state,” she said before a legislature that her partisan tactics have hopelessly divided. The government shut down in 2007 and came to the brink again in 2009.
Granholm dismisses the thought that Michigan might be responsible for its own plight through onerous taxation or stubborn unions. She sees Michigan as a victim — of trade policies and greedy corporations taking jobs to Mexico — and her government as its savior. Government, she emphasized, is the mother of job creation. Not once (as has been her seven-year pattern) did she propose a fundamental fix to Michigan’s antiquated tax laws, union culture, or government programs. Instead, she focused on all the jobs she — me, me, me — had brought to the state:
A new electronics plant (that “my nine overseas jobs missions have brought” because “I was able to close the deal”) in Battle Creek, bought with government incentives.
A solar manufacturing facility in Saginaw, the result of a federal Department of Energy loan.
Homeland Security jobs and defense-contractor pork, funded by Uncle Sugar.
Wind-turbine production by Dowding Machining in Easton Rapids, bought with $7 million in federal stimulus funding.
And so on.
Granholm has presided over the cratering of a state economy. Michigan has led the nation in unemployment for 46 straight months.
She claims that she has “laid the foundation for Michigan’s new economy, steadily building each of six new sectors.” But God help you if you are not on the governor’s select list of favorites; the rest of the job-creating community has had to shoulder a new surcharge on top of the already onerous Michigan Business Tax. Her 2007 tax surcharge, according to the West Michigan Chamber Coalition, hiked taxes for 60 percent of Michigan businesses (most of them small companies), with tax bills doubling for 10 percent of them.
“Our legislators are busy voting on tax credits to a myriad of targeted industries, hoping that one of these ‘new-economy’ firms will save our state from collapse,” protests Bill Jackson of the Grand Rapids Chamber of Commerce. “Isn’t it time government puts an end to picking winners and losers and gives every Michigan job provider a ‘tax credit’?”
Her 2007 budget also increased the income-tax burden by 17 percent. Yet she has resisted reforming the public-employee pensions and health benefits that are bankrupting that state government and that are among the most generous in the country.
To massage her party pals, Granholm will punish even her favored sectors. Biotech is on her list, yet her budget seeks to repeal the state’s immunity from civil lawsuits for drug companies whose products are approved by the FDA. The law, passed in 1996, was specifically intended to give Michigan a comparative advantage and attract high-tech pharmaceutical jobs. This is precisely the kind of economic diversification Granholm claims she supports — yet she throws it overboard as a direct sop to Democrat-friendly trial lawyers.
In the new Michigan, perpetual public stimulus in the form of government-directed industrial policy means non-stop headlines for the chief executive as she picks winners and losers for “new jobs.” Redirecting commerce through the capital, the governor’s power profile grows even as the broader business climate chokes.
Welcome to Obama’s vision, America. Welcome to Governor Granholm’s Michigan.
— Henry Payne is an editorial writer and cartoonist with the Detroit News.