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Jewish World Review Feb. 9, 2006 / 11 Shevat 5766

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Who can restart Michigan's engine?


http://www.NewsAndOpinion.com | DETROIT — Michigan has a problem: Its prosperity is withering as America's automobile industry withers. So Gov. Jennifer Granholm (D) has a problem: She is seeking reelection in this cold economic climate. Her likely Republican opponent, Dick DeVos, has a problem: People are appalled by the state's condition, but they like Granholm. As does DeVos: "She's a really nice person."


The result may be a rarity — an outbreak of gentility in politics. Debates about economic policies involve splittable differences, so civility might actually be served by the seriousness of Michigan's crisis. The focus on traditional economic issues may preclude any preoccupation with the cultural questions — abortion, guns, same-sex marriage, etc. — that tend to embitter politics.


DeVos, son of the co-founder of Amway, is a gentlemanly businessman from Grand Rapids. Recently he passed through this city's airport, dressed for wintry campaigning in the Upper Peninsula, where only 3 percent of the state's population lives. His full-court-press campaigning is fueled by the daily drizzle of terrible economic news.


Ford's announcement that it is cutting at least 25,000 jobs and closing 14 manufacturing plants in North America was preceded by General Motors' announcement that it is cutting 30,000 jobs and closing 12 plants. Soon the largest North American maker of auto parts — Delphi, based in Troy, Mich. — may ask a bankruptcy judge to shred labor contracts covering 33,000 workers. This would trigger a showdown with the United Auto Workers union. The UAW cannot strike Delphi without causing ripple effects that could inundate GM, which used to own Delphi and might, under the terms of the spinoff agreement, be responsible for anywhere from $3.5 billion to $12 billion of Delphi's "legacy" costs — pensions, medical care — for retirees.


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Last year Michigan was the only state other than Mississippi and Louisiana — that is, the only state not hit by Hurricane Katrina — that had a net job loss. It has lost one in four auto manufacturing jobs since 2001. Republicans have paid for billboards proclaiming that Michigan has lost one job for every 10 minutes Granholm has been governor. Understandably, the percentage of voters disposed to reelect Granholm is 35 percent.


Michigan's corporate income tax burden will be ranked the second-heaviest in the Tax Foundation's forthcoming State Business Tax Climate Index. DeVos especially objects, as almost any conservative would, to heavy reliance on the Single Business Tax — basically a payroll tax — particularly as applied to service industries that can, and do, leave the state.


Granholm has a recognizably liberal recovery plan: The state has borrowed $2 billion to be invested by people her administration calls "independent job-creation experts." Translation: The $2 billion is a politically useful fund to be distributed to favored business executives.


DeVos is being attacked because, the chairman of the Michigan Democratic Party says, "He supports free trade, which has devastated the Michigan economy." So this race will preview what might be the highest stake in the 2008 presidential race — repudiation of the basis of America's post-1945 prosperity. That basis was a bipartisan consensus in favor of free trade. That consensus has frayed, and by 2008 the Democratic Party probably will fully and formally embrace protectionism.


With 17 electoral votes, Michigan has recently been, and in 2008 will again be, a presidential election battleground state. In 2000, when Republican John Engler was governor, Al Gore defeated George W. Bush, 51 to 46. In 2004, when Granholm was governor, John Kerry defeated Bush, 51 to 48.


Another close presidential contest could turn on this state, in which the biggest city may be the nation's saddest, other than New Orleans — and Detroit's condition is not the result of a natural disaster. Detroit's crime rate makes it second only to Camden, N.J., as America's most dangerous city. (Flint, Mich., is fourth.) Detroit has an adult functional illiteracy rate of 47 percent. A passionate advocate of school choice where schools are failing, DeVos knows he will be the object of passionate opposition from the teachers unions. But he says he operates on the assumption that this will be a close race, so if he wins, "48 percent will have voted against me."


United Van Lines, a winner from Michigan's losses, reports that last year the ratio of outbound to inbound moves was the state's highest since 1982, when Michigan's unemployment rate was 16.4 percent. DeVos tells audiences, "I don't want to have to get on a plane to visit my grandchildren." He wants them to have to go to Lansing to visit grandpa.

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George Will's latest book is "With a Happy Eye but: America and the World, 1997-2002" to purchase a copy, click here. Comment on this column by clicking here.


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