Daniel Howes' Blog

WaPo shows MI's guv keeps answering question no one asked

Last week, Time magazine's cover -- "The Tragedy of Detroit" -- presaged a simple question: Will a once-great American city recover? The front page of today's Washington Post doesn't ask such an explicit question about the Motor City or its home state. But if the piece headlined "In Michigan, a yellow light for green jobs" posed one, it'd be this: Does its governor, Jennifer Granholm, understand the economics of job creation ... or any economics at all?

"Since taking office in 2003," The Post says, "Granholm has created 163,300 positions, her office says. She expects that a recent infusion of more than $1 billion from the Obama administration aimed at nurturing car battery and electric-vehicle projects will generate 40,000 more positions by 2020.

"In the past decade, however, as the auto industry has grown smaller, Michigan has lost 870,000 jobs -- about 632,000 of them during Granholm's tenure. The number is expected to reach 1 million by late next year, the end of her term.

"In her effort to attract employers, the governor has taken up the latest arms in the economic arsenal -- tax credits, loans, Super Bowl tickets and a willingness to travel as far as Japan for a weekend to try to persuade an auto parts company to bring more jobs to Michigan."

None of it -- or almost none of it, the paper neglected to report -- has been designed to help existing Michigan businesses or reduce the swelling costs of business taxes (such as the 22-percent surcharge on the Michigan Business Tax) and regulation that rivals the anti-industrialism of California.

That's because the sum total of the guv's economic policy, despite the worst economic record of any sitting governor and a legacy destined to be called "the lost decade," is to avoid hard, old problems and focus on new ones. New industries. Politically correct "green" jobs. Twenty-first century companies whose hiring needs typically are modest and whose hiring standards are generally higher than those offered by the would-be Michigan workforce (as the guv recounts in her retelling of the Electrolux saga for the benefit of The Post).

Here's the inconvenient truth, which repeatedly goes unacknowledged by the guv and, now, the Obama administration: Economic policy must do both. If politicians are keen to support emerging industries with incentives and sympathetic government policies (as teams Granholm and Obama clearly are), they're kidding themselves (and their supporters) if they think that's sufficient, especially for an economy so clearly in transition. It isn't.

And if Team Obama doesn't believe it, come to Michigan. Come talk to the CEOs of Business Leaders for Michigan, several of whom have a figurative foot out the door. Or the CEO of Pfizer, who made the call to bolt Michigan. Or the CEO of Comerica Inc., now based in Dallas. Or the CEO of Volkswagen of America Inc., now based in suburban Washington. Or thousands of small business owners. Accidents unrelated to business tax and regulatory policy? Hardly. Instead, it's evidence of a lesson still unlearned by some who should know better -- but don't.