It's time to invest in Michigan Inc.

The dwindling Lansing press corps experienced a brief tremble of excitement last week when Gov. Rick Snyder indicated he might not run for re-election if he completes his agenda in four years.

“Report: Snyder may not seek re-election if agenda complete,” headlined the Detroit News, quoting the Michigan Information and Research Service, (MIRS) a capital-based political newsletter.

The governor was quoted as saying he’d be “happy to go fishing, or teach or do something else,” if he could get everything on his to-do list done. But given that the self-described “tough nerd”  regularly gives his staff (and the Legislature) fits with a constant stream of ideas, the notion seemed unlikely from the start.

And, sure enough, it quickly blew away when Snyder spoke to the Michigan Municipal League meeting in Grand Rapids, saying that his plan all along was to spend two years campaigning and eight years governing the state.

Certainly, Snyder has accomplished an amazing amount in less than a year in office: repeal and replacement of the Michigan Business Tax; a structurally balanced budget, signed. amazingly, early for a change; a powerful Emergency Manager law that authorizes takeovers of municipalities and school districts in dire financial trouble; a new teacher tenure system; and lots of reforms in local government, school operations and other areas.

The governor has also made some enemies, by drastically cutting spending on schools, universities and local government -- and ramming through a new taxes on pensions. He has undoubtedly been successful in part because it was widely recognized that our state is in trouble. Snyder’s basic agenda -- “Reinventing Michigan” -- has been largely focused on cleaning up the messes our state got itself into over the past decade:

Those include a chronically unstructured budget, something for which both parties were to blame; a “job killing” business tax system; and excessive union power in schools and local governments.

He’s made real -- and unexpected progress -- in all these areas.

Taken together, these changes are necessary for Michigan’s reinvention. But they’re not sufficient.

For Snyder to give his reforms some permanence, he needs to at least try to stick around long enough to get to the second part of his agenda. And that means working out a competitive strategy for our state to prosper. This is not something that can be done just by cutting state spending. Anybody who has run a business -- as I have -- knows that while you may save it from going under by cutting costs, a company needs more than that to survive and thrive.

It is essential to develop a strategy that includes identifying its key, distinctive, durable competitive assets and then carrying out a sustained program to invest and market them. For a company, those assets might be design (see Ford Motor Co.‘s preoccupation with upgrading its Lincoln brand) marketing (seen the Amazon emails customized to your preferences?) or research and development (as in the University of Michigan deciding recently to invest its own money in high-tech start ups).

Ideally, a competitive strategy includes all three. Any company that focuses only on cutting costs is fated to dwindle and die.

Cutting costs without investing in what you’ve got to sell is nothing more than the sound of one hand clapping. You have to pick and choose, however, and for Michigan to succeed, Snyder needs to pick a few very tightly focused assets and mount a long-term investment program in them.

Here’s my personal list:

* Colleges and universities: Michigan has been going on the wrong direction by leading the nation in cutting state support for colleges and universities. Not all our schools are world-competitive, but some -- the U of M, Michigan State, Wayne State and  Michigan Tech -- are essential to our state’s future. To continue to starve them is silly, and self-defeating.

* K-12 education: I’m not sure if anybody really understands how to dramatically improve student learning, but it’s beyond dispute that we’re spending a whole lot on our schools without getting enough back. We need to get beyond ideology and political slogans -- “Right To Teach,” for example -- and really focus on finding out what makes kids learn better.

* Quality of life: We need to remember and let everyone know that Michigan is one of the most wonderful places to live and raise a family on God’s green earth. Rivers and wildlife and forests. Water clean enough to drink and the stars that shine at night. Communities with museums, libraries and music and places to eat, drink and commune with neighbors.

Each of these might be called a “public good.” Each is essential to any successful competitive strategy for our state. And I hope Rick Snyder stays in office long enough to bear down on them.

That’s an agenda well worth a campaign for a second term.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and president of The Center for Michigan, a nonprofit, bipartisan centrist think-and-do tank, designed to cure Michigan’s dysfunctional political culture. He is also on the board of the Center’s Business Leaders for Early Education. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

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Comments

Matt Howell
Wed, 10/12/2011 - 11:13am
Just crying for more money to be shoveled at our universities is nonsense and just feeds the degree and cost inflation we've already seen for the last decade, not to mention, a lousy deal for Michigan's tax payers. Coming up with a new model for adolescent and young adult education is a much better use of your platform.
Joe
Sat, 10/15/2011 - 2:28pm
Michigan must change its culture. Why would a young professional want to stay or move to Michigan when we have an aging, conservative population that is penny wise and pound foolish? When that professional knows that they won't be able to sell their house to move somewhere else and if they should be laid-off, they will have less weeks of unemployment than other states to keep their household afloat. They should also be concerned that Michigan locks more people up for more reasons than other Midwest states which can eventually create shortfalls in other budget areas while "creating" more crime and criminals, possibly including their own sons and daughters, for recreational drug use. Michigan has become a rural state in thought and practice. Smart, young, creative people like Steve Jobs was a capitalist but not a Republican. Even Warren Buffet is incredulous at how Republicans like Rick Synder are behaving; lowering business taxes for those with means while cutting the low-come tax credit for the working poor. Bad economics as well as uncaring. I hope he proves me wrong. I hope cutting taxes on wealthier Americans will bear the economic fruit Synder is promising. The rich are richer than ever before but they would rather invest in China and pay their 15% capital gains tax. One out of three Canadians and Germans are union members and their economies are doing well. Union wages are helping to drive those economies and those with more are willing to pay more for the privilege to live, produce and profit in those countries for the benefit of all. We can learn from these democratic socialist countries before we decline to the status of a two class country.
Neil
Mon, 10/17/2011 - 10:07pm
I understand that in 2011 the state revenue collection has been rising. The extra funds have been directed to the rainy day fund, the state savings account. The effect of the new 6 % corporate tax does not start until January, if I understand the legislation. Business will pay the MBT until next March tax returns. Next year we will begin to see if the state will earn a profit by increasing tax revenues by lowering business taxes. So, we are a little premature in talking about new investments before we have the money without raising tax rates. We are taking an unfamiliar conservative approach of increasing tax revenues by lowering taxes. History since 1961 demonstrated that the conservative approach has worked at least 3 times at the Federal level.