Posted on 10/21/2006 6:54:23 PM PDT by WarrenC
The U.S. economy remains in better shape than bearish partisans contend. Broad economic indicators like real GDP, payroll employment, and industrial production are expanding, while the U.S. economy itself is nearing its sixth year of expansion. Yet the same bullish claim cannot be made about Michigan, which continues to lose jobs.
It’s rare for a state with an economy as large as Michigan’s to record job losses in the midst of a national expansion. A lot of ink is spilled in Detroit each month reporting short-term job losses. But some key long-term trends have been overlooked.
How bad is Michigan’s labor market? Michigan is the only state to record a contraction in nonfarm payroll employment for five consecutive years. The state’s labor market is headed for its sixth straight annual decline in 2006. This unprecedented contraction is centered in the private manufacturing sector, which peaked in July 1999. Total Michigan nonfarm employment peaked in June 2000. Employment in some of Michigan’s metropolitan statistical areas peaked earlier — including Flint, which peaked in 1997.
Say again? You mean Michigan’s job losses didn’t start under President Bush?
Trained economists are debating the various factors that have contributed to Michigan’s single-state recession. These include fiscal, regulatory, trade, and monetary policy. By contrast, too many Michigan politicians have resorted to the logical fallacy of poisoning the well in an election year.
Fortunately, a few officials are focusing on sound economics. Thanks to the efforts of Oakland County executive L. Brooks Patterson and state Rep. Leon Drolet (R), and despite Democratic Gov. Jennifer Granholm’s opposition, Michigan’s anti-competitive single-business tax has been repealed. That’s good news since employment isn’t the only troubling economic indicator in Michigan. Income growth also has been weak when compared to historical norms.
The BEA’s per capita income series dates to 1929. Between 1929 and 1980, Michigan PCPI was 100 percent or more of the U.S. total for all but two years (1932, 1933). It peaked at 122 percent of the U.S. total during WWII. Since 1980, Michigan PCPI has been several percentage points above or below the U.S. rate — until 2005, when it fell to 94.8 percent of the U.S. total. The only time Michigan recorded a weaker number was in 1933, when income was 93 percent of the U.S. total.
Michigan’s rank in the national income sweepstakes also has fallen. From a peak of eighth in the U.S. in 1944, Michigan has dropped to twenty-fourth in the nation as of 2005, its second-worst performance. (In 1982, a recession year, Michigan was twenty-fifth in PCPI.)
Before his untimely passing in August, Stephen Dresch advanced a neo-Hayekian critique of the Michigan government’s many failed attempts to pick economic winners with tax dollars. According to Dawson Bell of the Detroit Free Press, Dresch helped set in motion investigations of university economic-development activity “which led to public outcry, criminal convictions and the departure of high-level officials” at Michigan Technological University. Dresch was later elected to the state legislature as a Republican in a heavily-Democratic Upper Peninsula district.
It was Hayek who argued that governments lack the knowledge to successfully engage in central planning. And Dresch, a Yale Ph.D, was treated in a boorish manner in Lansing for defending this moral high ground. But there is cause for longer-term optimism. Dresch’s critics lost this year’s policy battle over the single-business tax, while more positive change seems inevitable in the wake of Michigan’s severe employment and income declines.
Those serious about solving Michigan’s economic problems should reflect on Dresch’s critiques and let private venture capitalists and entrepreneurs, not politically connected funds and authorities, allocate capital.
One lesson to be learned from Michigan’s single-state recession is that economics trumps politics. Another is that markets don’t wait for politicians.
— Greg Kaza is executive director of the Arkansas Policy Foundation, an economic research group founded in 1995 in Little Rock.
I meant Michigan as a State not the University... However they have a large base of College Republicans and Ann Coulter went to law school there...
I will never understand ANY LIBERL ARTS school. That is why I chose not to attend one.
Do you know where?
I just spoke w/ a Advanced Degree student from U of M tired of the emails from the facility that are from la-la land. There concerns were something to the effect as Gay Rights in Venezuela, and womens labor issues or some other tomfoolery. Not a word about the War on Terror etc.
I hear those same ads touting Michigan on the radio here in Maine. Actor Jeff Daniels is the guy pitching his
home state.
Yeh...here in Texas we also hear the ads to move our businesses to Michigan. Makes me want to rush out and rent the U-Haul ....NOT.... more like U-Heave. No thanks Michigan... I like living in a state where the Dems don't control and mess up the economy.
At least there's one positive - Minor League Baseball is coming to Midland. Dumb nickname (the Loons), but you and your family will enjoy it.
I think the race politics are poison, and I have read that as soon as they can retire many blacks move back to the south. Don't be surprised is you lose population and maybe a congressman come census time.
Also, it is legislatures and insurance comissioners that screw up the insurance businesses.
Any productive person should get the hell out of Michigan. I recently moved from Mi to Atlanta and can not believe how much better the economy is. Everyone I know was worried about their jobs in Michigan, I have yet to hear that in Atlanta.
I don't think Michigan's problems are Granholm's fault, there are larger forces at work. But she's done nothing to help. With the help of Republican State Senator Bruce Patterson (who needs to be kicked out of office) she did allow the Michigan Public Service Commission to destroy electricity deregulation so that union jobs at Detroit Edison Could be saved.
read later.
If my memory is correct MI has one of the unhealthy populations of any state, i.e. overweight etc.
possibly, but lets not forget that we also are covered in snow for 9 months out of every year. Its pretty hard to be active and exercise when you can't walk outside.
and of course, what do you want to do when its sub zero weather outside and a blizzard??? curl up inside by a fire and eat warm meals.
whats going on today is reminisent of what happened here in michigan back in the late 70's and early 80's. recession.
The problem then and the problem now is that we are a one industry state...automotive.
The northern part of the state relies on one thing...tourists and fudgies. Neither of which come north and spend money when the down state auto industry is suffering, so there it is....total state recession.
my family tried and is trying to get out and move to another state....problem is our house won't sell and that is critical to get started somewhere else.
Our house that 6 years ago was worth 250,000 we'd be lucky to get 100,000 for now.
I grew up near DC, worked at a union plant in MD before my job moved me to central Michigan. After 10 years of trying to deal with the union, entitlement, pro-democrat crowd, the wife and I have had it.
The union attitude is pervasive. It exists in the large corporations and the small mom and pop stores. I've never seen an area so proud to slouch to mediocrity. To be uninformed here is a badge of honor.
As soon as the kids finish high school, we're outta here.
You are right Granholm has done little to help Michigan grow. She needs to go to Houghton and Calumet and see what has become of the copper mining industry. Then go and visit Dow Chemical in Midland. She will learn about how companies in Michigan's past have dealt with labor unions, both unsuccessfully and successfully. She might then find a way to work with the automobile industry and their labor unions to arrive at a solution where everybody wins, instead of everybody losing everything.
The State Legislature raising the minimum wage this year didn't do much to help Michigan's economy either.
Where are you?
boyne city, u?
Education is wonderful, but don't confuse it with intelligence. It's very possible that Mick is a very smart man who would make an excellent Congressman... or not.
Oh oh, too many immigrants on the "We take Cash Only" system - no revenues for the state.
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