CB: This guy, Howe, means some kind of radical reactionary change in Michigan. How about a change allowing government run enterprises ?
"former House Speaker Newt Gingrich, an opening speaker at the Mackinac Policy Conference, told The Detroit News in an interview. " "burdened with obligations it cannot afford, too many local school districts, too many overlapping municipalities and a pro-labor, anti-business image " "and the outsized influence of labor in the state capital keep swelling taxpayer obligations to public employees even as they block business-friendly reform. " http://detnews.com/article/20100602/OPINION03/6020367/Mich.-revival-requires-major-cultural-shift Last Updated: June 02. 2010 8:47AM Daniel Howes: Mackinac Policy Conference Mich. revival requires major cultural shift Mackinac Island -- There should be no doubt among the powerbrokers heading today to the Detroit Regional Chamber's Mackinac Island confab: Michigan's "lost decade" of recession and political drift risks becoming a lost generation if a more radical course to revival remains untaken. That'd mean 20 years or more of sliding per-capita income, disappearing jobs, fleeing college graduates, stressed school budgets, meager private sector investment and metastasizing public pension and health care obligations. And, yes, more national ridicule. The budding national recovery, traditionally a harbinger of a Michigan rebound, threatens to leave the state behind to wallow in zero-sum battles between special interests vying for pieces of a diminishing fiscal pie. It's a recipe for continued decline. "People have to take this very seriously," former House Speaker Newt Gingrich, an opening speaker at the Mackinac Policy Conference, told The Detroit News in an interview. Advertisement "Two plus two equals four. If the math doesn't add up, I don't care what the demagoguery is. The system will fail. Do you really want to change the trajectory that Michigan has been on? I have a hunch most people want change." They say they do, anyway, but the problem is in the doing. From business groups and think tanks to research centers and legislative fiscal analysts, a solution-rich consensus is building that the Michigan model premised on strong automakers in Detroit, robust manufacturing statewide and middling educational attainment to fund premium wage and benefit packages is unsustainable. The evidence to support their arguments will be reprised here over the next three days. Today's Michigan doesn't attract enough business investment. It doesn't retain talent well to replace those voting with their feet. It doesn't answer the structural fiscal imbalances weighing on the state, localities and local school districts riding for a new crash when federal stimulus dollars run out next year. Confronting 'brutal reality' The challenge, as the state slouches toward its most consequential election day in a generation or more, is persuading a new governor and reshaped Legislature to act more decisively. Their actions, or not, can influence whether fiscal stability, renewed growth and next generation business investment comes to Michigan -- or whether it keeps walking on by. "Whatever we've been trying for the past 10, 15 or 20 years hasn't worked," said Sandy Baruah, the chamber's new CEO. "We've got to try things radically different. What do successful leaders do? They confront the brutal reality. Alabama is about to overtake us in terms of per-capita income." Shocking, but true. So are the facts that Michigan leads the nation in unemployment; that its job creation is virtually nil; that it spends more on prisons than higher education; that business investment is scarce unless it is larded with public tax incentives directed at politically correct "green" industries. Put simply, Michigan is reaching the kind of inflection point its own automakers hit 18 or so months ago: Does the state -- burdened with obligations it cannot afford, too many local school districts, too many overlapping municipalities and a pro-labor, anti-business image -- change direction? Or does it keep doing what it's been doing and expect a different result? Needed: Decisive action Michigan isn't the only major state hurtling toward insolvency. There are New York, California, Illinois and New Jersey, where a newly elected governor, Chris Christie, has declared a state fiscal emergency, frozen spending and begun a politically fraught campaign to slow the growth of public wages and, especially, benefits. Will Christie's fiscal rampage change New Jersey overnight? No, but decisive action can change market sentiment and perception because markets -- be they would-be bond holders who finance governments or potential business investors -- are leading indicators. Improve the government competitiveness, and the business environment and change can follow. "I call it a tipping point, and we're there," said John Rakolta, chairman of Walbridge Aldinger Co., a Detroit-based construction firm. "This is 10 years of steady decline, and we still don't get it. We've lost jobs every year for 10 years. We're in denial. "It's not just taxes. It's not just the auto companies. Come on. It's the culture. What's it going to take to change the culture? Certainly, losing a million jobs didn't do it. It takes a catastrophe, and we're in the middle of one." He reels off his own litany: 10 years ago, Georgia had 1.5 million fewer residents than Michigan, but today they're even. In 1953, Michigan's per capita income was 22 percent above the national average; today it's 13 percent below the national average and falling. Michigan has one school district for every 18,000 residents, according to Rakolta's estimates. Florida has one district for every 250,000 residents. Worse, he says, growing numbers of Michigan business leaders are positioning their companies to grow outside the state even as they slowly de-emphasize operations in the state. Why? Because weak leadership, recurring political logjams, public apathy and the outsized influence of labor in the state capital keep swelling taxpayer obligations to public employees even as they block business-friendly reform. It's a toxic combination, and the numbers are expected to get much worse before they get better. Even if the state economy expands by 3 percent annually, the Senate Fiscal Agency estimates the state budget will face a 13 percent, or $1.2 billion, shortfall in 2012, swelling to a 19 percent, or $1.8 billion, deficit in the 2014 budget year. "I see this thing as coming to a head in the spring of 2011," said Bob Daddow, deputy Oakland County executive for special projects, who has assembled detailed (and dark) assessments of the state's financial prospects and what they augur for localities. "I'm talking about a billion, $2 billion in cash needs all coming at the same time." Ugly doesn't begin to describe what that could mean for public services and education, for voter sentiment and business investment. Like it or not, a radical change is coming -- because it has to, as soon as possible. [email protected] Daniel Howes' column typically runs Tuesdays, Thursdays and Fridays. >From The Detroit News: http://detnews.com/article/20100602/OPINION03/6020367/Mich.-revival-requires-major-cultural-shift#ixzz0piawjuHk _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
