Daniel Howes Blog Forum

JDL:

I stand corrected, because I double-checked. Michigander is the noun; Michiganian the adjective. That said, have never claimed to be "one of us." Was born in Ohio, but was not -- repeat, not -- raised a Buckeye fan. Some things are just too horrible to contemplate.

-- DCH

W:

Go?Go where? Not before the second term ends sometime on January 1, 2011. This, too, shall pass.

-- DCH

NR:

Who are you and what have you done with Mark Brewer? The chairman of the MI Dems is a proven master at selectively depicting parts of policy proposals to score political points and calling it a day. The sad fact about MI politics is that this tactic (hardly his alone) works. DeVos did call for abolishing the Michigan Business Tax because it was a disaster. But he also recommended replacing it with a corporate income tax -- not doing away with business taxes entirely. As for abolishing the personal property tax, it is a demonstrated job killer, which is why Ohio abolished its PPT and adjusted tax rates in other areas. The net effect: Ohio has a more competitive tax load overall, more business investment and a lower jobless rate (even now).

Second, the income tax reduction you cite was a step-down begun under Engler, in dramatically different economic circumstances. Taxes matter (see the success of movie-making tax incentives), but so does a comprehensive blend of taxes (business, personal incomes, graduated or flat, etc.). Spending matters, too; comparative wages and benefits for public employees matter; how and whether a state supports its higher ed institutions matters(MI's spending, adjusted for inflation, is down more than 22 percent over the last five years as Alabama's -- Alabama -- surged 37 percent); how and whether a state chases new business from outside its borders to the exclusion of longtime companies who can't get calls returned by Lansing. This list could go on.

You're right: "simplistic solutions" like tax cuts are not the only answer to what ails Michigan. In fact, cuts may not be the answer at all when it comes to, say, personal income taxes. The nub of the problem is that too many baskets, to borrow an overworn metaphor, are off-limits. Structural reform? Too hard and too threatening to Big Labor. Reworking the MBT -- heck, eliminating the 22-percent surcharge? Too expensive. Aligning the pay and benefits of public and local school employees more closely to national averages? Too anti-union. Comprehensively restructuring Michigan's tax regime? Too likely to result in a net reduction of revenue lest the benchmarking phase show Michigan needs to entertain real change to improve its competitive position.

Instead, we stall, hope and make excuses -- none of which is much of a strategy.

-- DCH

NR:

Coupla thoughts: First, if you read my columns with any regularity, you'll know that I've been an equal-opportunity critic of the Legislature and the governor, the Republicans and the Democrats. Leadership in this state is, in general, appalling. It's dominated by petty, economically retrograde, small-beer politics that rely on last-generation solutions (the GOP and its Pavlovian tax mantra) and interest-group protection rackets (the Dems and their loyalty to a labor bench steadily killing its funding source).

Second, I wouldn't quibble, in general, with your characterization of the DeVos tax proposals. But I would quibble with their completeness. In calling for an end to the Michigan Business Tax, perhaps one of the most horrid "reforms" in MI history, he did advocate that a corporate income tax be instituted in its place. Grover Norquist notwithstanding (and, for the record, who cares what he thinks?), the issue in Michigan is comprehensive tax reform -- which this governor has steadfastly refused to entertain.

Third, Michigan isn't alone in bearing the brunt of the Detroit Auto's implosion. Ohio, for one, could make a case; Indiana, less so. But look how they responded ... both before and during the slide. Ohio eliminated its personal property tax because it was a killer for business investment and expansion. Indiana is running a surplus. Both, until the Lehman bankrutpcy 13 months ago, continued to attract auto investment and both have lower jobless rates. Why? Because labor doesn't run their state capitals and, second, because they are retooling the structure of state government, especially in Indiana.

Finally, I have said repeatedly in columns that the governor is not responsible for the implosion of Detroit Auto. But she is responsible for the response of her office and the state bureaucracy, be it the Michigan Economic Development Corp. or the Department of Environmental Quality and its omnipotent ability to stop business expansion dead. When Delphi Corp. went bankrupt four years ago, heralding the beginning of this slide, she issued a screed that read as if he had been written by the United Auto Workers. (If you want a copy, which I still have, I can e-mail it to you.) Indiana Gov. Mitch Daniels, meanwhile, was in Troy less than 48 hours later trying to a) see what Delphi needed to keep jobs in Indiana and b) lobbying to get Delphi's headquarters to move to his state. Michigan's governor also impacts how state economic development efforts affect existing business and, repeatedly, I hear stories of efforts directed outside the state to the exclusion of those already here. What's that say, anyway?

Marshaling a vigorous defense of the current administration strikes me as akin to defending the hapless Detroit Lions by criticizing its opponents. Web sites are groaning under the weight of proposed solutions -- the Center for Michigan, Citizens Research Council, Business Leaders for Michigan, Mackinac Center for Public Policy, the edit pages of daily newspapers -- and most of them countenance some form of tax increase(s). Which suggests that the problem isn't ideas, it's action.

-- DCH

Love:

Appreciate the passion, but not sure I get the point(s) or the argument(s).

-- DCH

NR:

Ya' know what? You're right: Michigan voters probably would reject such a draconian choice -- had one been offered by Dick DeVos (which it wasn't), much less the policies of the current Senate Republicans. You pose a false choice. The truth is that the past is not a good predictor of the present and future. Options open to Blanchard, Engler or Granholm (early in her term) simply aren't options anymore, short of pushing tax rates to California levels and killing whatever business activity remains.

Would suggest a little more critical thinking and a little less taking things at face value.

-- DCH

C:

Think you overstate the guv's posture, insofar as it suggests she "enrichs" her friends. Would prefer the verb "protect." And, I suspect, you're not the only Dem expressing regrets these days. In fact, I know you're not.

-- DCH

NR:

Am sure the governor appreciates you flying wing-man, complete with pot shots about my being "obsessed" with "bashing the governor." If I'm obsessed with anything, it's the desperate search for executive leadership in the ninth year of Michigan's "Lost Decade."

Never said the governor "took all summer off" and have never questioned once her work ethic. But, people involved in the process tell me, the guv has done the slow walk on bridging the gap(s) in the budget, mostly because working the process in advance with the speaker and the Senate majority leader would weaken her leverage to get what she wants on deadline.

Finally, it's mildly stunning that there are people out there still ready and willing to defend the guv's fiscal management, despite the worst economic record of any sitting governor this decade. Talk about an alternative universe. But it's not particularly surprising; it's emblematic of the political-business culture that helped bring Michigan to where it is -- and likely will keep it here.

-- DCH