MichEconomy.com

Is Mitt Romney really George Romney's son?

2012-02-14T11:42:00.002-05:00

George Romney with a 1959 Rambler

Republican presidential candidate Mitt Romney just can't leave the federal auto bailout alone. But he should.

He was widely criticized for his 2008 New York Times op-ed piece, headlined, "Let Detroit Go Bankrupt."

Today, he authored a Detroit News op-ed on the bailout that raises questions about whether he was even a part of the Romney family while growing up.

Romney writes that he "got my love of cars and chrome and fins and roaring motors" from his father, who became president of American Motors when the younger Romney was 7 years old.

But American Motors under George Romney was the antithesis of chrome, fins and roaring motors. The automaker, which was acquired by Chrysler in 1987, prided itself on building small, affordable, fuel-efficient cars.

The elder Romney railed against the excesses of his Big Three competitors, traveling 700,000 miles around the country to denounce the "gas-guzzling dinosaurs" sold by Chrysler, Ford and General Motors.

In 1958, Romney even called on Congress to break up the Big Three automakers.

Mitt Romney recalled American Motors' legacy in 2008 when he told the CBS "Early Show":

"But, you see, when I was growing up, the fact that we won the mileage championship year after year with the Rambler was a source of great pride for my dad. He used to campaign against the gas-guzzling dinosaurs."

Politifact.com, a fact-checking service, was so suspicious of this claim (An American company built fuel-efficient cars in the 1950s?) that it checked it out and found it to be true.

But now Romney says he's developed a love of "chrome and fins and roaring motors" from his dad. Were he still alive, I think George Romney would be disappointed.

Michigan, meet Rick Santorum

2012-02-10T07:48:00.001-05:00

Michigan's Republican presidential primary on Feb. 28 has been seen as Mitt Romney's contest to lose. But Rick Santorum's impressive primary wins in Colorado, Minnesota and Missouri this week have some political analysts predicting that Santorum could topple Romney in the state where he was born and raised.

Who is Rick Santorum? He's best known as a social conservative. But just how conservative he is was on full display during his appearance Wednesday on MSNBC's "Morning Joe."

In a fascinating exchange with Detroit native Jeffrey Sachs, director of Columbia University's Earth Institute, Santorum calls for the abolishment of "government schools," trashes the Head Start program and says our economy should allow for one parent (presumably mom) to be able to stay home with the kids.

All that was in response to Sachs asking Santorum if he thought the United States needed to invest more in education to address what Sachs said is a skills gap in the U.S. workforce.

Nope, Santorum said. The government just to needs to spend tax dollars more efficiently. (That's pretty much the standard Republican answer to all spending questions.)

If you're looking for a good summation of what Santorum is all about, you should watch his answers to Sachs' questions in the video below. It starts at the 5:08 mark and runs about three minutes.

Update: Santorum, as it turns out, does have a point about the effectiveness of Head Start. A major study conducted during the Clinton administration found that participation in Head Start had no impact on the academic, socio-emotional, or health status of students by the end of first grade. You can read more about the study here.

Visit msnbc.com for breaking news, world news, and news about the economy

What do Pete Hoekstra's DebbieSpendItNow ads say about his economic plan?

2012-02-09T14:50:00.001-05:00

A friend of mine asked me to look beyond the disturbing ethnic stereotyping in Pete Hoekstra's campaign ad attacking U.S. Sen. Debbie Stabenow's record and think about what it says concerning Hoekstra's economic plan.

(In case you've been spending all of your time outside enjoying Michigan's unseasonably mild winter, Hoekstra is seeking the Republican nomination to oppose Stabenow in November.)

In the ad, a young Chinese woman, speaking in broken English, says:

Debbie spends so much American money. You borrow more and more from us. Your economy get very weak. Ours get very good. We take your jobs. Thank you, Debbie Spend-it-now.

Accompanying the ad was a website, DebbieSpendItNow.com, that has since been taken down. Typing in that URL will take you Hoekstra's campaign website.

What the woman says in the ad is a sweeping oversimplification of global economics.

Yes, China is the largest foreign holder of U.S. treasury debt. But China's economy isn't getting stronger because the country is purchasing our T-bills.

China is getting richer because consumers in the United States and other countries are buying huge amounts of Chinese-made products, allowing China to become wealthier and invest in U.S. debt, which it sees as a good, safe place to park its cash.

China ran a $202 billion trade surplus with the United States last year.

Yes, China is taking our jobs, as the young woman says. But that has a lot more to do with low wages in China, its improving education system, our strong appetite for cheap, foreign-made goods and China's often-controversial policies that support an export-based economy.

What does Hoekstra have to say about those issues? Nothing, in his ad. He sees just two blocs of voters; one that wants the federal government to cut spending and one that doesn't. Everything else must be noise.

But apparently stung by the overwhelmingly negative reaction to his first ad, Hoekstra released a second ad today that cites several areas in which Pete "SpendItNot" doesn't want the federal government investing our tax dollars: economic stimulus, universal health care and alternative energy. You can see it here.

Also, check out the Michigan Truth Squad's analysis of Hoekstra's first ad here. (Disclosure: I'm a member of the Truth Squad, but I was not involved in this analysis.)

Michigan state government employee wages are declining

2012-02-08T11:54:00.000-05:00

If you're among those who think that state employees are overpaid, then you'll be happy to hear that wages for state workers fell last year.

The Michigan Civil Service Commission's annual workforce report shows the average state worker in the fiscal year ending Sept. 30 earned $54,048, down from $54,121 in 2010. The state's payroll also declined by $110 million, falling from $4.79 billion in 2010 to $4.68 billion last year.

That was the first shrinkage in the state's payroll since the early 2000s, Craig Thiel, director of state affairs at the Citizens Research Council of Michigan, wrote in a blog post.

Pay and benefits for state workers amounted to 10.4 percent of total state expenditures last year, down from a recent high of 11.1 percent in 2008.

The number of workers on the state's payroll, which has been falling for 40 years, continued to drop last year.

State government employed 47,818 workers last year, the fewest since 1971 when 47,227 state workers were conducting the people's business. Michigan employed 29 percent fewer workers last year from the 1981 high of 67,246 employees.

While that may be good news to the small government crowd, there is some evidence that fewer employees and lower pay are hurting the quality of state services.

A recent Bridge magazine piece, for instance, told the story of Michele Glinn, the last Ph.D toxicologist left on the Michigan State Police staff. Glinn, fed up with unpaid furlough days, shrinking staff and the negative view of state employees, recently left her job for a better-paying one in the private sector in Missouri.

Her departure left the State Police without anyone available to provide expert witness testimony in the prosecution of drug and alcohol cases.

You're free to believe that state government is bloated with overpaid workers, of course. But you should at least know the statistics.

As Lent Upson, the Citizen Research Council's first executive director once said, "The right to criticize government is also an obligation to know what you are talking about."

Despite what Gov. Rick Snyder said, you can leave your outhouse seat up

2012-01-30T14:14:00.003-05:00

Gov. Rick Snyder got lots of yuks when he said during his State of the State speech that Michigan needs to do away with silly regulations, such as one requiring that outhouse users keep the seats down.

Snyder said people don't need to be told by the government how to regulate their outhouse seats.

"I don't know about you, but I have a higher authority at home," he said, referring to his wife, Sue, who could be seen laughing while seated on the House floor.

Citing outdated or silly regulations is an oft-used rhetorical tool employed by elected officials in speeches.

But, as the Detroit Free Press discovered, there is no such outhouse regulation.

Michigan does require that outhouse openings be closed when not in use. The Free Press quoted an outhouse expert about why this is important from a public health standpoint. (Warning: You might not want to read that part of the story while you're eating if you have an uncovered outhouse opening.)

Snyder spokeswoman Sara Wurfel told the Free Press that it was OK for the governor to cite a regulation that didn't exist. The larger issue, she said, is the threat to doing our business in private:

"Whether it's a seat or lid, mandating that it be kept down perfectly illustrates the types of regulations that are outdated and need review," she said. "Do the taxpayers of Michigan really want a regulation on the books that could mean inspections of seat/lid placement would take place?"

So state government might send out the potty police to make sure your outhouse is in compliance with state regulations? That's the day we should really worry about big government.

I think this episode shows that elected officials should stop talking about burdensome regulations in public. It's just too rhetorically risky.

A week after Snyder's outhouse flub, President Barack Obama also made a joke about a regulation he regarded as unnecessary. Obama's quip was true, but not very funny.

Obama said his administration eliminated a 40-year-old regulation relating to milk spills on farms.

“We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 per year proving that they could contain a spill — because milk was somehow classified as oil,” he said. “With a rule like that, I guess it was worth crying over spilled milk.”

About the only one who thought that joke was clever was Obama.

Republican lawmakers to General Motors: We still hate you

2012-01-26T10:54:00.000-05:00

Since its federally financed bankruptcy in 2009, General Motors Co. has made a remarkable turnaround. Sales, profits and employment are rising. GM even regained its crown as the world's largest automaker last year.

All of that is a terrible blow to Republican members of Congress who vehemently opposed the Obama administration's $50 billion bailout of GM two years ago. They may not have said so publicly, but many would no doubt liked to have seen GM struggling, at the least, to validate their view that the federal government had no business aiding a money-losing private business.

But, alas, there has been some good news for the GM haters in Washington--that greenie, government-subsidized Chevy Volt caught fire! The Volt, which is primarily powered by electricity and is eligible for a $7,500 federal tax credit, represents everything that is wrong with auto making to the free market, "drill, baby, drill" crowd.

House Republicans are in full investigation mode, attempting to put doubts about the Volt's safety in the minds of consumers. And they are trying to prove what they know must be true--that the federal agency charged with investigating such matters covered up the Volt battery fire to protect the government's 26 percent ownership share of GM.

In addition to holding a hearing on the matter Wednesday, the House Committee on Oversight and Government Reform also released a report alleging that an "unnatural relationship" between GM and the Obama administration may have resulted in a cover-up of the Volt battery fire by the National Highway Traffic Safety Administration.

The battery caught fire last June, three weeks after a NHTSA crash test of the Volt. GM has since announced it will beef up the structure around the battery, but insists that Volt owners are in no danger.

"As one customer put it, if they couldn't cut him out of the vehicle in three weeks, he'd have bigger problems to worry about," GM CEO Dan Akerson testified to the oversight committee on Wednesday.

Akerson also lamented that the Volt has become a "political football" in a presidential election year. The success of the government's bailout of GM and Chrysler has regularly been cited by Democratic President Barack Obama as he seeks re-election in November. So, of course, the Republicans must vilify the automakers for their "unnatural relationship" with Obama.

All of this led me to wonder where Akerson, a Republican who once was an executive at the heavy hitting private equity firm, The Carlyle Group, was placing his political wagers these days.

Like most careful corporate executives, Akerson has hedged his bets. Last September, Akerson gave $5,000 to Republican Rep. Dave Camp of Midland, according to OpenSecrets.org. He also gave U.S. Sen. Debbie Stabenow, a Michigan Democrat, $5,000 in May.

But if I were Akerson, I'd be tempted to not give another cent to Republicans, who seem determined to damage GM in their effort to regain the White House.

Did Michigan Attorney General Bill Scheutte just kick off his gubernatorial campaign?

2012-01-25T15:25:00.001-05:00

I don't claim any special political analyst powers. But when I read about today's news conference featuring the unlikely pairing of Attorney General Bill Scheutte and Detroit Police Chief Ralph Godbee, I wondered if something more than law enforcement was going on here.

To be fair, it wasn't just the Republican Scheutte and the presumably Democratic Godbee at the Lansing news conference. A number of police chiefs and county prosecutors came together to address the growing problem of violent crime in the state.

Flint and Detroit lead the nation in violent crime, according to recent FBI statistics.

Gov. Rick Snyder said in his State of the State speech last week that fighting crime will be a focus of his administration this year. He plans to issue a special message to the Legislature on the topic in March.

But Scheutte seemingly jumped ahead of the governor, a fellow Republican, during the news conference.

The attorney general said he wants $140 million of the state's $475 million budget surplus to be used to hire 1,000 police officers statewide. Snyder has not yet said how or if that surplus should be spent.

Several of my Lansing friends have told me Schuette does want to be governor someday. He's built a political resume full of elected and appointed positions, and his political ambitions still seem hot.

Schuette has been a U.S. congressman, a state senator, state Agriculture Department director and a state appeals court judge. He also served as one of many Republican sacrificial lambs who tried to unseat U.S. Sen. Carl Levin.

I have no personal knowledge that Scheutte intends to seek the governor's office in 2014. But if he does decide to run, we might look back on today's news conference as the unofficial start of his campaign.

Gov. Rick Snyder's State of the State speech 'most boring ever'

2012-01-19T08:54:00.001-05:00

With all the issues facing Michigan this year--potential right-to-work legislation, a financially teetering Detroit and what to do with a budget surplus among them--anticipation was high for Gov. Rick Snyder's second State of the State speech.

Thud. Snyder's speech mostly focused on the many accomplishments of his first year and didn't provide a clear road map--or many details--on where he's going this year.

Veteran political analyst Bill Ballenger called it "the most boring State of the State ever." And Bill has heard all of them. Just kidding, Bill!

But Ballenger said boring, in Snyder's case, is probably good.

Snyder's style is to give a broad outline of what he wants to accomplish but not reveal many details ahead of time. Witness his repeated refusal during his election campaign to explain how he intended to pay for a $1.7 billion business tax cut. We eventually found out.

As Ballenger noted during a "Off the Record" session following the SOS, a Republican-controlled Legislature means Snyder can accomplish pretty much whatever he wants without jawing much about it in advance.

Still, the speech was a disappointment to those looking for details on how Snyder intends to continue implementing what he calls "Michigan 3.0"--the era of innovation.

Strangely, he spent time praising the economic growth of sectors from Michigan 1.0 and 2.0--agriculture, manufacturing, mining and tourism. No mention at all of knowledge jobs in health care, financial services, and business, professional and technical services.

And no discussion of whether the governor will propose using some of the budget surplus on new investments in education and cities. (State Board of Education President John Austin has written an insightful piece on Michigan's need for new public investments in Dome magazine.)

Some say Snyder accomplished so much in changing the direction of state government in his first year that this year will spent implementing that new direction.

But as he did in his first year, I suspect Snyder will surprise us with some of the policy directions he takes in 2012. This is a governor who under-articulates and over-delivers. His SOS speech may have been boring, but I don't think his actions will be.

Cost of a college eduation coming under increasing scrutiny in Michigan

2012-01-13T10:52:00.001-05:00

Bridge magazine has an excellent package of stories this week on skyrocketing college costs in Michigan. (Disclosure: I'm a regular contributor to Bridge, but was not involved in this special report.)

Rising college costs are a problem in many states, but especially in Michigan. Bridge found that college costs here are among the highest in the country while state support for higher education is among the lowest in the country.

Those costs are putting an incredible financial burden on students and their families. Michigan students took out $1.8 billion in loans to finance college in 2010, up $600 million from 2007, according to Bridge. And that figure appears not to include loans taken out by parents to finance their children's eduction.

In today's Detroit News, columnist Marney Rich Keenan discusses her family's struggles with paying college costs for three daughters. Says Keenan:

As a state, and a country, for that matter, we can't keep on insisting our future depends on a highly educated work force and then not provide an affordable path for families to get their children college degrees.

So what can be done?

Senate Democrats announced a plan this week that would essentially provide a free college education to most students in Michigan. That would cost about $1.8 billion a year and be paid for by cutting a variety of tax loopholes, technically known as "tax expenditures."

Michigan Future Inc., an Ann Arbor-based think tank, has proposed shifting state funding from universities to students. Its plan would also would provide tuition assistance to any student from around the world who wants to study in Michigan:

Public funds would be used to help students from anywhere on the planet who can meet entrance requirements to better afford Michigan’s higher education system. This might be the most powerful statement we can make that we want the most talented people in the world to come here to learn and ultimately live and work.

Neither of these proposals are likely to gain much traction in Republican-controlled legislature. Many Republicans, and probably some Democrats, see the problem as too much spending by the universities. The universities counter that they have cut millions of dollars from their budgets in the face of declining state support.

A wise person once told me that we used to see a college education as a societal good. We now see it as an individual good, so if you want a college degree, you should pay the entire cost yourself.

Unless we return to believing that there's a great social and economic benefit to having a high percentage of citizens with college degrees, we'll face a future of ever-rising tuition costs.

If automakers build more hybrids and electric vehicles, will the customers come?

2012-01-10T13:02:00.000-05:00

Toyota Prius C Hybrid

Interesting piece in the New York Times today about automakers stepping up production of hybrid and electric vehicles even as sales of the alternative-fuel vehicles are dropping.

The story likely will serve as validation to electric-vehicle naysayers that automakers are wasting their money by developing electrified cars.

But automakers could be making a smart bet in getting ahead of the market.

They know they will need more electrics to meet stringent new federal fuel economy standards that take effect later in the decade. And they know that consumer vehicle purchases shift dramatically to more fuel-efficient vehicles when gas prices jump above $4 a gallon, as they did in 2008. That could very well happen again this year.

And if I were a competitor of Toyota, I'd be looking nervously at its new compact 2013 Prius C hybrid that was introduced this week at the Detroit auto show. Toyota's latest entry in its Prius "family" of vehicles promises 50 miles per gallon fuel economy at a starting price of under $19,000.

The relatively high prices of hybrids and electrics have served to brake their sales. I'm guessing the smartly priced Prius C will appeal broadly to a new generation of environmentally conscious young buyers who are looking for quality, value and fuel economy.

That's how Toyota broke into the U.S. market some 40 years ago. Its strategy turned out pretty well.

Click here for an illuminating chart on gasoline prices since 1996. It gives you an idea why automakers are placing long-term bets on the viability of hybrids and electric vehicles.

Detroit auto show optimism seems valid this time

2012-01-09T08:13:00.000-05:00

It's the opening of media preview week at the North American International Auto Show, an event that often is welcomed by freezing temperatures, blowing snow and unrealistic optimism about the year ahead.

Things are different this year. The sun is shining, the snow is a no show and automakers--particularly the Detroit Three--are rightly upbeat about sales and profits this year.

Some analysts think sales could recover this year to nearly 15 million cars and trucks. That's below the 17 million vehicles they were selling a decade ago. But those sales were juiced to unsustainable levels by heavy discounting, easy credit and giveaway lease rates.

Chrysler, Ford and General Motors have much stronger balance sheets (and management) than they possessed just a few years ago. Labor costs are competitive with foreign automakers, thanks in no small part to the off-loading of retire health care benefit costs to a UAW-run trust.

These are companies that can be profitable in a 10 million sales year. Tack on nearly 5 million more vehicles and the Detroit Three should be money machines.

And they're also creating jobs again. Automakers and suppliers added 40,600 jobs in the United States last year and are predicted to create more than 150,000 additional jobs through 2015, according to the Center for Automotive Research.

One thing to remember: Despite their impressive turnarounds, the Detroit Three automakers haven't eliminated the business cycle. There will be an inevitable downturn. And the fortunes of automakers can turn on dime.

Japanese automakers will be even stronger competitors this year as the recover from last year's disastrous earthquake.

Foreign makes--the Hyundai Elantra and the Land Rover Range Rover Evoque--were just named the car and truck of the year, respectively, at the Detroit auto show.

But 2012 promises to be the best year domestic automakers have seen in years. Let's enjoy it.

Healthy U.S. job growth in December. Has the economy turned the corner?

2012-01-06T09:46:00.000-05:00

The United States added 200,000 new jobs in December and the unemployment rate fell to 8.5 percent, the Labor Department reported this morning.

For the year, the national economy produced 1.6 million jobs, even as the country was consumed by a steady drumbeat of bad global news, including Japan's earthquake, the European debt crisis and a downgrade in the United States' credit rating.

It's an even better story for the private sector, which created 1.9 million jobs last year. Government jobs fell by 300,000, primarily because financially strapped local governments and school districts have been chopping jobs.

Manufacturing added 23,000 jobs in December, including 9,000 in transportation equipment. Many of those jobs likely were in Michigan, where automakers and suppliers have started to hire again. We'll know when state unemployment figures are released on Jan. 18.

There's still a long way to go before workers can feel good again about the job market. Jobs have not returned to pre-recession levels. And there are 5.6 million people who have been out of work for more than six months, 43 percent of all unemployed workers.

Still, December's job numbers were pretty good news, except for Republican presidential candidates who are trying to make the case that things are getting worse under President Barack Obama.

Will Michigan become a right-to-work state in 2012?

2012-01-05T11:32:00.000-05:00

Hoping to capitalize on fresh efforts by Republican lawmakers in Indiana to pass right-to-work legislation there, the Mackinac Center for Public Policy has cranked up its efforts to destroy unions here.

Its daily Michigan Capitol Confidential newsletter today says there is strong support in the Republican-controlled Michigan legislature and the governor's office for right-to-work legislation, although there are no bills pending on the subject.

There are right-to-work laws in 22 states that prohibit employees from having to pay dues in union-represented workplaces as a condition of employment.

Capitol Confidential says 17 of 26 Republican state senators voted yes on right-to-work bills when they served in the House. And 20 current GOP House members have voted to make Michigan a right-to-work state. Among them is House Speaker Jase Bolger.

Lt. Gov. Brian Calley, who breaks tie votes in the Senate, voted twice to approve right-to-work legislation when he served in the House, Capitol Confidential noted.

How about Gov. Rick Snyder? The Capitol Confidential piece contained a link to a video in which Snyder said during his campaign for governor that he would sign a right-to-work bill, should it reach his desk.

"I would sign it, but I don't put it on my agenda," Snyder said in the video.

But last month, Snyder sent a strong signal to the legislature that he doesn't want to see a right-to-work bill on his desk. In an interview with WJR's Frank Beckmann, Snyder said, "I don't think it's an appropriate subject for us to be dealing with today."

It will be interesting to see whether Snyder's fellow Republicans in the legislature decide that right-to-work is an "appropriate subject."

Tom Friedman says Republican debates are irrelevant; Ann Arbor is the future

2012-01-04T14:55:00.000-05:00

The Republican presidential primary campaign has been all about tax cuts, small government, marital fidelity and booting President Barack Obama from office.

But none of that has anything to do with what America must do to capitalize on the major trends shaping the global economy, argues New York Times columnist Thomas Friedman in today's paper.

To Friedman, it's all about bandwidth, baby!

Citing the work of Blair Levin, who runs the Aspen Institute's Gig.U project, Friedman says the "job factories of the future" will be "cities and towns that combine a university, an educated populace, a dynamic business community and the fastest broadband connections on earth." Friedman continues:

Historians have noted that economic clusters always required access to abundant strategic inputs for success, says Levin. In the 1800s, it was access to abundant flowing water and raw materials. In the 1900s, it was access to abundant electricity and transportation. In the 2000s, he said, “it will be access to abundant bandwidth and abundant human intellectual capital,” — places like Silicon Valley, Austin, Boulder, Cambridge and Ann Arbor.

By the way, Washtenaw County, where Ann Arbor is located, had the lowest jobless rate in the state at 5.2 percent in November.

If you're like me--finding much of your workday is spent using the Internet, smart phones and tablets--you might agree that what Friedman says has more relevance than much of what has come out of the Republican debates.

Gov. Rick Snyder hints at new state government investments

2012-01-03T14:43:00.000-05:00

On his Facebook page today, Gov. Rick Snyder said Michigan will save $5.6 billion by asking state employees to contribute to the cost of their retirement health benefits.

And in more good news on the fiscal front, there are estimates that Michigan might post a more than $700 million surplus when the books are closed on the 2012 fiscal year budget that ended Sept. 30.

But don't expect a fat tax refund. Said the governor on the Rick Snyder for Michigan Facebook page:

So, does this mean taxpayers can expect a hefty refund from the state? Unfortunately not yet; after decades of mismanagement and chronic overspending, we still have a lot of work to do to get our fiscal house in order. But it does mean that in the future instead of spending money to pay off long-term liabilities, we can direct that money to other priorities such as education.

Snyder also recently told the Associated Press that annual cuts to K-12 schools and universities may be over. That's promising news to many who think the state is hurting its future by disinvesting in education.

Senate committee nixes new bridge to Canada. Will Gov. Rick Snyder's road plan face same fate?

2011-10-27T11:02:00.000-04:00

Gov. Rick Snyder was dealt the first major defeat in his young administration last week when a Senate committee, controlled by his Republican Party, refused to let the full Senate vote on his plan to build a new bridge linking Detroit and Windsor.

Snyder has invoked a "cooling-off period" and promises to revisit the plan, possibly within weeks. In the meantime, the governor has unveiled a plan to fix Michigan's sorry roads and bridges by raising up to $1 billion in higher vehicle registration fees and changing the way gasoline is taxed.

Snyder said he's open to negotiation to the size of the fee hike, but some of his fellow Republicans already are trashing the plan.

State Sen. John Pappageorge likely reflected the opinions of many in the Republican caucus when he told the Detroit Free Press that "there are three things my constituents don't like: the gas tax, toll roads and potholes, and that's the nub of the problem."

The other problem is that Republicans, who control the Legislature, have become the party of "no." Their answer to virtually every issue that involves money is that no additional dollars are necessary. Existing funds just need to be used more efficiently.

Much has been made of millions of dollars Ambassador Bridge owner Matty Moroun spent on lobbying and television advertising to defeat the New International Trade Crossing plan.

But I wonder if the bridge plan would have won approval in the Legislature absent Moroun's spending. Despite backing from virtually every major corporation and business group in the state, there was a lot of opposition in Lansing to Snyder's plan.

Some lawmakers questioned the need for it. Others were skeptical of Snyder's claim that the federal government would allow Michigan to use Canada's $550 million bridge payment as a match for additional federal road funds. Still others didn't believe the governor's contention that Michigan taxpayers would never have to pay a penny for bridge construction.

And in an environment where austerity seems to be the supreme virtue, it's easy to say "no."

Which leads me to ask: Could we have built the majestic Mackinac Bridge in today's political mood?

Michigan Chamber of Commerce President Rich Studley issued a statement Wednesday supporting Snyder's road plan: "Now is the time to make bold and dramatic changes on how we deliver and pay for transportation in Michigan. Doing nothing is not an option,” he said.

We'll soon see if lawmakers agree.

What is the Occupy Wall Street movement really about?

2011-10-21T09:30:00.001-04:00

My column last Sunday for some of the Booth Newspapers and online affiliate Mlive.com on the OWS movement has received quite a bit of attention. At last count, it garnered 267 comments on mlive--a personal best, or worst, depending on how one views these often vitriolic commenters. At least they're reading.

If you missed the column and want to read it, you can find it here.

Despite business tax cuts, University of Michigan economist says state job growth will slow next year

2011-10-07T07:52:00.000-04:00

Gov. Rick Snyder has said repeatedly that he's confident the $1.7 billion in business tax cuts he engineered will lead to more Michigan jobs. But those additional jobs may not materialize as the tax cuts kick in next year.

In a forecast released Wednesday, University of Michigan economist George Fulton cut his 2012 jobs forecast nearly in half from his April prediction. Fulton now expects 33,000 jobs next year, down from an earlier estimate of 61,500 jobs.

He also lowered his current year forecast by 3,400 jobs to 61,200 jobs.

In his brief updated forecast, Fulton said job growth in the final three months of this year will be flat, with small gains in private sector jobs offset by losses in state and local government.

Job growth resumes in 2012 but at a far lower rate than this year, he wrote. Fulton made no mention of state tax changes taking effect next year, including $1.4 billion in tax hikes on pensioners and low-income families.

Fulton, Joan Crary and Don Grimes will present their full forecast for 2012 and 2013 Nov. 18 at U-M's annual Economic Outlook Conference.

Gov. Jennifer Granholm had an up and down relationship with General Motors

2011-10-05T15:43:00.001-04:00

General Motors Co. can be a Michigan governor's best friend or biggest headache.

When GM is announcing new plant investments and jobs, the governor can bask in the positive media spotlight. When the company is slashing jobs and closing plants, as it has done many times in its history, it can ruin a governor's day, if not his or her approval rating.

Gov. Jennifer Granholm experienced both situations in her eight years in office. And as her new book, "A Governor's Story" points out, she had an uneasy relationship with company executives, especially as GM neared bankruptcy.

Granholm was an enthusiastic cheerleader for GM as it sought assistance from the Bush and Obama administrations in 2008 and 2009. She made numerous TV appearances to defend the company and offered CEO Rick Wagoner unsolicited advice to take an aggressive stand in testifying before a congressional committee after his disastrous initial appearance in Washington.

But Granholm said she wasn't sure Wagoner appreciated the advice. After she finished her pitch, the governor said there was "an awkward silence" before Wagoner thanked her for the pep talk.

"He sounded sincere, I thought. Or maybe he was just being polite," she wrote.

In her public support for GM, Granholm parroted Wagoner's contention that GM couldn't reorganize under bankruptcy because consumers would not buy a car from a bankrupt company. (That turned out not to be true because of the unusual "quick rinse" bankruptcy engineered by the Obama administration.)

But in early 2009 she said she became worried that maybe GM had been planning for bankruptcy all along. In February, she called Wagoner's office seeking reassurance. She spoke with Fritz Henderson, who would soon replace Wagoner as CEO.

"We have no plans for bankruptcy," Granholm quotes Henderson as saying. "I assure you. Bankruptcy would be the worst thing possible."

But on March 31, two days after Henderson was named CEO, he said in a news conference that he would consider bankruptcy to meet the federal government's restructuring demands.

"If I was opposed to bankruptcy, I would have said no" to becoming GM's CEO, Henderson said, according to USA Today.

But Granholm resumed her PR campaign for GM when the automaker introduced the Chevy Volt, an electric car with a supplementary gasoline engine that has become a symbol of Granholm's campaign for a "clean energy" economy.

GM returned the favor by allowing Granholm to use its Warren technical center as the backdrop for her book's dust jacket cover photo.

Granholm book shows it's not easy being "green"

2011-10-03T09:47:00.001-04:00

Former Gov. Jennifer Granholm has staked her economic legacy on the development of "clean energy," including solar and wind power, and electric vehicles.

With the aid of the Legislature, Granholm pushed for the adoption of lucrative tax credits for companies developing batteries to power electric vehicles. More tax credits were offered for companies building solar panels and wind turbines.

In batteries alone, Granholm estimated the state will create 63,000 jobs. She repeatedly states that by 2030, 70 percent of cars and trucks sold will be powered by electricity -- a much higher figure than many experts are projecting.

That points to a problem with predicting the size of the green economy. No one really knows.

Lots of smart people say alternative energy sources must be developed to reduce man-made global warming and to cut our dependence on oil from the unstable Middle East.

Bruce Katz of the Brookings Institution puts it this way:

There is no doubt in our minds that moving to a clean economy is an environmental and energy imperative. But consumers, companies, and cities are also sending an unequivocal signal: this is a market proposition and an economic transformation as profound as the information revolution.

Many conservatives see it quite differently, though. None of the major Republican candidates for president believe global warming is a result of human activity. And their answer to reducing our reliance on Middle East oil is to drill for more of it at home.

It seems probable that if a Republican wins the White House next year, federal support for clean energy initiatives will largely dry up.

Even Granholm's husband, Dan Mulhern, worries in her book (co-written by him) that a green economy is a political hard sell. During a discussion on the potential for clean energy, Mulhern tells Granholm that he's with her on her belief that it can be a game changer. But he offers this observation:

"So you pancake local incentives on top of federal loans. Plus you streamline the regulatory process. Plus you reform education and training to give workers advanced skills. Plus you take an aggressive role in fighting unfair trade. Seems like a lot. Maybe too much government for Americans to tolerate."

Granholm offers an interesting response:

"I really don't get it. Why do Americans say they hate an active government, then get mad when government does nothing while their jobs disappear?"

Why indeed?

Pfizer feared panic in closing Michigan operations -- Granholm book

2011-09-30T08:41:00.001-04:00

I wasn't sure I wanted to read former Gov. Jennifer Granholm's memoir, "A Governor's Story." Michigan had been through a terrible eight years during her two terms as governor and reliving it through Granholm's words didn't seem like the most positive way to spend my time.

But I also was curious to learn her insider's view of economic events that I'd covered as a journalist on the outside, so I took the plunge. What I found were some fascinating and sometimes maddening situations recounted by the governor. Over the next few days, I'll write about a few of them.

The first involves a phone call Granholm took on January 22, 2007 from Pfizer Inc. CEO Jeffery Kindler.

Kindler, like Granholm, was a Harvard grad. He'd even held a re-election fundraiser for her. But this was no social call. Kindler was calling to tell Granholm that Pfizer was closing its huge research center in Ann Arbor--the city's largest taxpayer--and several facilities in West Michigan as part of a larger corporate downsizing.

After the bombshell public announcement, Pfizer spokesmen were telling reporters that they didn't know how many jobs would be lost, especially in West Michigan. They said, among other things, that some who would be losing their jobs might be staying with the company in other capacities and that the exact number of jobs being eliminated hadn't been determined.

A Pfizer spokesman I like and respect reiterated to me this week that the company's top brass had not given him a specific job loss number in 2007.

But Kindler was much more specific with Granholm, according to her recollection of their conversation.

"Actually, between Ann Arbor and Kalamazoo, it's about 5,000" jobs, Granholm quoted Kindler as saying. "But we're not going to give out the numbers publicly because we don't want people to panic."

No wonder cynicism is an occupational hazard for journalists.

Free Press, News editors want Gov. Rick Snyder to be more partisan

2011-09-29T09:21:00.000-04:00

Gov. Rick Snyder, who never ran for public office before being elected governor last year, has said repeatedly that he is not a politician. That sounds like a smart thing to say at a time when much of the electorate is angry at politicians and rabidly partisan politics.

But Snyder's view of himself isn't going over well with his fellow Republicans. GOP activists were disappointed that Snyder didn't attack Democrats during his speech last weekend at the annual Republican Leadership Conference on Mackinac Island.

Snyder's support for building a second bridge over the Detroit River, his ambivalence about right-to-work legislation and his call for Michiganders to lose weight brought him an invitation on the island by state Democratic Party Chair Mark Brewer to join the opposition. (The governor declined.)

Snyder even told the MIRS news service that he might not run for a second term if he accomplishes his goals in his first term.

You might think Snyder's rejection of partisanship would be praised by a media that has called for more cooperation among the elected officials of opposing parties. But curiously, editorial page editors at the News and Free Press are calling for Snyder to act more like a Republican.

News editorial page editor Nolan Finley said Republican hopes of capturing the White House next year depend, in part, on the battleground state of Michigan. Finley said Snyder needs to become more engaged in actively supporting the Republican cause:

He doesn't like to play in the political arena. But the state GOP will need Snyder to get over his aversion to partisan politics and stump passionately for the Republican ticket.

Friday night, he took his first step and stumbled. Standing on a purely partisan stage for the first time, Snyder gave his Lions Club speech to a crowd craving red meet. He said "Republican" only once, and touted his policy agenda rather than the party.

Free Press editorial page editor Stephen Henderson called Snyder's nonpartisan message on Mackinac Island "wonderful" but "odd."

When Henderson asked Snyder if he planned to endorse one of the Republican candidates for president, the governor responded that he was too busy rebuilding Michigan to give it much thought. Henderson:

Yes, but can you imagine a governor sitting out the contest, or making an endorsement so late that it doesn't have much effect? It could matter for the state during next year's campaigns. And it could matter if the winner of the Michigan primary winds up as the Republican nominee and ultimately in the White House.

Nonpartisan behavior, it seems, only goes so far.

"Bridge," new online magazine debuts

2011-09-06T09:52:00.000-04:00

There's a snazzy new player in Michigan's online journalism scene: Bridge, which will cover public policy, the economy, education, the environment and many other issues critical to the lives of Michigan residents.

I was honored to have written much of the content in the inaugural edition and am excited to be a regular contributor to future editions. Bridge has assembled a stable of fine journalists who will report on and analyze the most important issues our state faces.

The Center for Michigan's founder, Phil Power, further explains the role of Bridge:

It’s aimed at providing accurate, trustworthy news and analysis of the public’s business and, thus, at bridging the differences in our state: East and West, North and South, Republican and Democrat, urban core and suburbs, labor and management, poor and wealthy, minority and majority. We intend to fill the information vacuum left by deteriorating Michigan newspapers and the increasingly powerful and ideological single interests.

Check it out!

One idea for igniting the economy

2011-09-05T15:25:00.001-04:00

Finally, after years of sluggish employment and income growth, President Barack Obama will deliver a major jobs address Thursday to Congress (if House Speaker John Boehner doesn't change his mind and refuse to let the president speak). Obama's speech comes just days after the Labor Department announced that employers created no jobs in August.

Here is an idea Obama will not propose: employers should give everyone a raise. A regular reader of my columns on mlive.com recently emailed me with the suggestion that employers give all their workers a 5 percent raise to stimulate the economy.

Sure it sounds crazy and naive, but let's think about this for a second.

Businesses aren't hiring mostly because of slack demand in the economy. Putting more money in consumers' pockets would boost their spending power.

But wouldn't handing workers a raise without a jump in productivity just fuel inflation? Not necessarily. Some economists say most workers have not shared in productivity gains in recent years. So giving them a raise now would essentially amount to a delayed productivity payment.

And many employers could afford to boost workers' wages. Corporate profits are at record levels and account for their biggest share of gross domestic product in 60 years.

My economist friends no doubt could drill numerous holes in the argument for boosting workers' wages. But I think they also would agree we need an extraordinary plan to turbocharge the economy.

Did all U.S. job growth in June occur in Michigan?

2011-07-21T09:41:00.000-04:00

Something clicked with me yesterday when I read that Michigan added 18,000 payroll jobs in June. Wasn't that the same number of payroll jobs created that month in the entire country?

Yep. So can we say all the job growth in the United States last month, as paltry as it was, occurred in Michigan? I fired off an email last night to University of Michigan economist Don Grimes, asking that question. Not exactly, Grimes responded.

Grimes noted that of the 18,000 jobs added in Michigan, 10,200 were in government. The uptick in government jobs probably was mainly due to the fact that Michigan schools were still in session when the jobs survey was taken and school employees were still counted on payrolls, Grimes said.

School in many other states had already ended and the country as a whole shed 39,000 government jobs.

"The seasonally adjustment process tries to pick that up, but June is a tricky month," Grimes said in an email.

That left 7,800 new jobs added by employers on private sector payrolls in Michigan in a month in which businesses nationwide added 53,000 jobs.

Still, Michigan's performance wasn't too shabby in comparison, Grimes noted.

"The data shows that Michigan is holding up much better than other states," he wrote."Private-sector employment was up about 8,000, which is very good (a much higher percentage gain than the private sector nationally)."