The Detroit News
Irv Reid, the former Wayne State University president turned big-idea impresario, puts it simply: Could the nation's nascent economic recovery pass Michigan by?
Auto sales are surging, a harbinger that Detroit's automakers at long last may be poised to make solid money again. Stock markets are moving higher. Consumer confidence is improving. There are even encouraging, if somewhat contradictory, signs coming from unemployment reports -- all of it signs an economic recovery is starting to take hold.
Could the Big Mitten miss out this time?
"Michigan does not have the robustness in its future right now that has been in other states," Reid said in advance of a daylong symposium being held today at Wayne State -- "The Michigan Economy: Will it get better, can it get worse?"
He continued: "We do not have a steady structure here that will bring us back. We have a shifting economy," whose emphasis on the service sector over traditional manufacturing disciplines is a "changed paradigm" that too many still have not come to accept.
The impact of the shift cannot be overstated. The state's per-capita income, now ranked 37th out of 50, is declining. Payrolls are slimmer. Tens of thousands of manufacturing jobs are gone, never to return. Tax revenue is evaporating, pressuring education budgets, public pay and benefits and the services offered by state and local government.
Even more troubling is a lack of consensus about how to attack the decade-long malaise. In politics, Democrats -- starting with Gov. Jennifer Granholm -- want more federal aid, an expanded sales tax and to target politically acceptable business sectors with tax incentives. Republicans and pro-business Democrats focus on the business environment of taxes, regulation and whatever measure of certainty can be had in Lansing.
There's not much consensus in business circles, either. Some blame the lack of access to capital and bureaucracy; others blame the heavy hand of organized labor and the costs associated with it. The net effect, as the national economy shows signs of revving, is a Michigan economy stuck in lower gears for what seems like forever.
"You have to start with where you are," said Alice Rivlin, a visiting professor at Georgetown University's Public Policy Institute and a former vice chair of the Federal Reserve, in town to address Reid's symposium. "Focus on skills, infrastructure and making Michigan an attractive place to do business."
Easier said than done, professor. We can't even agree on what "an attractive place" looks like much less how to get there with enough conviction to capture the sustained attention of would-be investors who have choices, lots of them.
"When you're coming out of a deep recession, there's bound to be uncertainty," said Rivlin, also a senior fellow at the Brookings Institution and director of the Clinton White House's Office of Management and Budget in the mid-1990s. "The private sector is always hardest hit in a recession. What makes the public sector a stabilizer is it doesn't go down in a recession."
But a heavily indebted public sector, reaching historic levels in the Age of Obama, is a threat to the overall economy. Ask Rivlin to identify the biggest threat to the U.S. economy -- and, by extension, a recovery for Michigan -- and she doesn't predict a "double-dip" recession or point to the likelihood of rising income tax rates or the prospects of slow growth and a slow recovery in employment.
"We've got to start quickly to address the deficit and the debt problems of the federal budget," she said, an unsustainable trend that has implications for everything from tax rates and entitlement programs to foreign policy and the value of the U.S. dollar on world markets.
We know a thing or two about entitlements, unsustainable trends, crushing debt and unrealistic assumptions about the present and future. We know it doesn't end well because we lived it -- and in many respects still are.
Auto sales are surging, a harbinger that Detroit's automakers at long last may be poised to make solid money again. Stock markets are moving higher. Consumer confidence is improving. There are even encouraging, if somewhat contradictory, signs coming from unemployment reports -- all of it signs an economic recovery is starting to take hold.
Could the Big Mitten miss out this time?
"Michigan does not have the robustness in its future right now that has been in other states," Reid said in advance of a daylong symposium being held today at Wayne State -- "The Michigan Economy: Will it get better, can it get worse?"
He continued: "We do not have a steady structure here that will bring us back. We have a shifting economy," whose emphasis on the service sector over traditional manufacturing disciplines is a "changed paradigm" that too many still have not come to accept.
The impact of the shift cannot be overstated. The state's per-capita income, now ranked 37th out of 50, is declining. Payrolls are slimmer. Tens of thousands of manufacturing jobs are gone, never to return. Tax revenue is evaporating, pressuring education budgets, public pay and benefits and the services offered by state and local government.
Even more troubling is a lack of consensus about how to attack the decade-long malaise. In politics, Democrats -- starting with Gov. Jennifer Granholm -- want more federal aid, an expanded sales tax and to target politically acceptable business sectors with tax incentives. Republicans and pro-business Democrats focus on the business environment of taxes, regulation and whatever measure of certainty can be had in Lansing.
There's not much consensus in business circles, either. Some blame the lack of access to capital and bureaucracy; others blame the heavy hand of organized labor and the costs associated with it. The net effect, as the national economy shows signs of revving, is a Michigan economy stuck in lower gears for what seems like forever.
"You have to start with where you are," said Alice Rivlin, a visiting professor at Georgetown University's Public Policy Institute and a former vice chair of the Federal Reserve, in town to address Reid's symposium. "Focus on skills, infrastructure and making Michigan an attractive place to do business."
Easier said than done, professor. We can't even agree on what "an attractive place" looks like much less how to get there with enough conviction to capture the sustained attention of would-be investors who have choices, lots of them.
"When you're coming out of a deep recession, there's bound to be uncertainty," said Rivlin, also a senior fellow at the Brookings Institution and director of the Clinton White House's Office of Management and Budget in the mid-1990s. "The private sector is always hardest hit in a recession. What makes the public sector a stabilizer is it doesn't go down in a recession."
But a heavily indebted public sector, reaching historic levels in the Age of Obama, is a threat to the overall economy. Ask Rivlin to identify the biggest threat to the U.S. economy -- and, by extension, a recovery for Michigan -- and she doesn't predict a "double-dip" recession or point to the likelihood of rising income tax rates or the prospects of slow growth and a slow recovery in employment.
"We've got to start quickly to address the deficit and the debt problems of the federal budget," she said, an unsustainable trend that has implications for everything from tax rates and entitlement programs to foreign policy and the value of the U.S. dollar on world markets.
We know a thing or two about entitlements, unsustainable trends, crushing debt and unrealistic assumptions about the present and future. We know it doesn't end well because we lived it -- and in many respects still are.
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