Truth Squad foul for saying Schauer “nearly destroyed” Michigan

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Truth Squad assigns five ratings to the political statements we review, in descending levels of accuracy:

No factual inaccuracies in the statement and no important information is missing
Mostly accurate
While the statement is largely accurate, it omits or exaggerates facts, or needs some clarification
Half accurate
Truths are interspersed with mistruths, or the speaker left out significant facts that render his/her remarks misleading in important respects
Mostly inaccurate
The major point or points made are untrue or misleading, even while some aspects of the claim may be accurate
The statement is false, or based on false underlying facts

Who: Republican Governors Association
What: 30-second TV ad “Past”
The call: Regular Foul

Relevant text:

“Their time together has been called Michigan’s lost decade, that left Michigan smaller, poorer. When Jennifer Granholm was governor, her right hand in the Michigan legislature was Senate Leader Mark Schauer. Jennifer Granholm and Mark Schauer nearly destroyed Michigan. 300,000 jobs lost. Double digit unemployment. One of the largest tax increases in Michigan history. Crippling debt. Mr. Schauer, Michigan families can’t afford to go back.”

The 30-second TV ad by the Republican Governors Association is its latest attack on Democratic gubernatorial candidate Mark Schauer. The former congressman and state senator is running against incumbent GOP governor Rick Snyder in a race polls say is tight. The ad opens with scenes of a crumbling factory and torn-down house, then shows side-by-shots of Schauer and Granholm. This is followed by a shot of a business owner hanging an “Out of Business” sign on the door and an image of what appears to be an anguished worker.

“Their time together has been called Michigan’s lost decade, that left Michigan smaller, poorer. When Jennifer Granholm was governor, her right hand in the Michigan legislature was Senate Leader Mark Schauer... 300,000 jobs lost. Double digit unemployment.”

Schauer, who served three terms in the state House, won election to the state Senate in 2002, the same year Granholm was elected to the first of two four-year terms. Schauer was named Senate Minority Leader in 2007. The two served together through 2008, when Schauer was elected to Congress.

No one would dispute Michigan suffered a devastating decade from 2000 to 2010, a period that saw huge job losses, plummeting property values and population loss. That includes the six years that Schauer and Granholm served together. In January 2003, non-farm private sector employment in Michigan stood at 4,445,700. In December 2008, it stood at 4,054,600 – a drop of more than 390,000. Michigan's unemployment rate was 6.2 percent in January 2003. It was 10.6 percent in December 2008. In 2003, Michigan's population  was 10,065,881. It fell to 10,003,422 in 2008. In 2003, Michigan's poverty rate was 11.4 percent. It was 14.4 percent in 2008.

“One of the largest tax increases in Michigan history. Crippling debt. Mr. Schauer, Michigan families can’t afford to go back.”

In 2007, Schauer voted to raise the income tax  from 3.9 to 4.35 percent and to expand the 6 percent sales tax  to include a variety of services, measures that imposed a total of $1.35 billion in tax increases. It was part of a budget deal finalized at 4 a.m., ending a potential government shutdown and closing most of a $1.75 billion deficit. It is among the largest tax hikes in state history.

According to analysis entitled “Michigan's Deteriorating Cash Position” by the Lansing-based Citizens Research Council, a nonpartisan research organization, the state's combined debt for the school aid and general fund stood at $490 million in 2003. By 2006, it was $1.3 billion.

So far, so good.

“Jennifer Granholm and Mark Schauer nearly destroyed Michigan.”

The ad takes multiple benchmarks of economic decline and blames the entire mess on Granholm and Schauer. On the one hand, this can be viewed as fair opinion, based on all the carefully assembled facts that surround it, and thus outside the purview of Truth Squad. On the other, this ad is a beautiful example of how a stream of undeniable facts can still lead to a conclusion with critical omissions. As has been widely noted, any reasonable analysis of Michigan's economic meltdown in the past decade cannot ignore the near collapse of the state's automobile industry, a fall underway well before 2003 that continued into 2010. There is arguably no other state as dependent on one industry.

A report, “Where Have All the Michigan Auto Jobs Gone,” by the W.E. Upjohn Institute for Employment Research, a Kalamazoo-based nonprofit research organization, concluded that Michigan was “on its way to relinquishing its dominance in the auto industry” by 2000. It noted the industry was already losing its competitive position to foreign rivals. Michigan lost 211,000 auto jobs from 2000 to 2007, the report stated.

The Upjohn analysis does not mention tax policy or any government action as a cause for the fall of the industry. Rather, it states that “factors such as inflexibility in responding to changing consumer preferences, rising oil prices, the accumulation of large legacy costs from generous health care and pension benefits to retired auto workers, and the higher production costs associated with an increasingly older, higher-paid incumbent workforce eroded their competitive position.”

It is also evident that Michigan's economic slide began in 2000, under the administration of GOP Gov. John Engler. In June of 2000, motor vehicle employment – including parts and vehicle manufacturing – in Michigan stood at 332,700. By the end of Engler's term in December 2002, auto employment had fallen by 54,000 to 278,600. Overall employment dropped by 243,000 during the same period as manufacturing employment fell from 971,000 to 900,000.

Michigan's decline continued through the decade, accelerated by the national financial crisis of 2008 and collapse of the nation's housing market that began in 2007. General Motors filed for bankruptcy in 2009, with $82 billion in assets and $173 billion in debt. Michigan hit bottom in March 2010, with an overall drop in jobs of 800,000 and loss of motor vehicle jobs of 216,000 since 2000. The ripple effect of the automotive plunge was considerable. A 2010 study by the Ann Arbor-based Center for Automotive Research, a nonprofit industry research organization, concluded that jobs in the automotive industry contribute to at least four other jobs.

Leaving aside what role, if any, Granholm played in deepening Michigan’s financial spiral, it’s worth noting that Schauer served as minority leader in the state Senate and that Republicans controlled that body during both of Granholm's terms, making it unlikely he could meaningfully impact any aspect of the state’s economy. (Schauer spokesman Zack Pohl has also noted $1.4 billion in income tax hikes on individuals that Snyder pushed through in 2011, including those on pensions, homeowners and low-income residents. It compares in scale to the 2007 tax hikes Schauer voted for.)

The call: Regular Foul

The ad is accurate in its citations of decline that occurred while Granholm and Schauer were in office at the same time. It is accurate on the loss of jobs and population, the rise in debt, and on Schauer's votes for tax hikes. And, as Truth Squad has chastised many campaigns this election season, this ad would have been fine had it stopped there. Instead, it overplays its hand by omitting the prime driver of Michigan’s recession (the auto industry) and by laying much of the blame on a senator whose party was not in power in that body.

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Wed, 09/03/2014 - 10:30am
You are right, the unions aren't perfect,but at least it allowed many people to be in the middle class. Now in Mich.. there are claims that as many as 40 % of families are struggling to provide the basic necessities. At Will employment benefits the employer at the expense of the workers. You can sure tell that Wi. Gov. and the Mi. Gov. dance to the same music. The song goes those were the days my friend we thought they would never end. Well guess what they did end. Peace R.L.
Sun, 09/07/2014 - 12:40am
Amen to that.
Wed, 09/03/2014 - 12:55pm
Those days ARE gone, because we can no longer afford them. The days of defined-benefit pensions and overly-generous health insurance were extended far beyond what they should have been, in both the public and private sectors, and unions continue to ask for benefits and raises that employers cannot afford. Another song says the times, they are a-changin', and indeed they are. People are going to have to learn to take more responsibility for their retirement through managing their own plans and disciplining themselves to save, and they are going to have to take more responsibility for their own health. Eating well, staying in reasonable shape and at a reasonable weight, and avoiding behaviors such as smoking and excessive drinking would go a long way towards controlling health care costs in this country.
Jan Costea
Wed, 09/03/2014 - 3:29pm
It's easy to say that all we need to do is show more discipline and we can save for our own retirement and take care of our health on our own. Sorry, but when you are living with almost no cushion in your savings and have no way to earn more money you can't very well put aside money for the future. Eat better? How can a person do that with a limited food budget? Avoiding fast food is not hard when you don't have money for it, can barely get decent food at a grocery store, and having a garden helps only a little. Your answer is an elitist answer that doesn't mean anything to people like me.
Dedra Downs
Mon, 09/08/2014 - 2:16pm
As incomes decrease 40% of people can't eat right and they can't save.
Wed, 09/03/2014 - 2:55pm
Negative ads, which point fingers at the supposed negatives in the opposition are a tool employed most by office seekers and their accomplices when they have no positive record to highlight, or no vision to lead us toward.
Wed, 09/03/2014 - 5:07pm
L.H. IF you are correct, and the future offers no hope for workers, no health care or pension, then there will be a rapid decline in support for the concept of capitalism. Today we read about major American corporations that keep their profits in foreign banks to avoid paying taxes to support our government. A current Presidential nominee never denied that he keeps his family's profits in a foreign bank to avoid taxes. Current CEOs pay themselves as much as 800 times the amount paid to workers, and have simultaneously frozen wages and reduced benefits. If the average American wage is $50,000/year, the worker has no extra spending cash to create a meaningful pension plan. That person/family is living paycheck to paycheck. If the private health care system continues to focus on profit margins and not purpose, it will become a system that also looses public support. A major point of capitalism is to create profits. If profits only benefit CEOs and shareholders, then capitalism no longer serves a common good. Workers should also benefit from their labor, and profits should increase wages and benefits so everyone wins. Oh, this ad about Democrats raising taxes is an ad that reminds me that MI Republicans have raised workers' state income taxes and added a tax to pensions to the tune of $1.2 BILLION a year and we have not seen that money used to improve roads or increase funding to public schools. Where did our tax dollars go?
Dedra Downs
Mon, 09/08/2014 - 2:21pm
Our tax dollars are going to wealthy corporations who have privatized our public services and run off with our tax dollars. These companies use all new, inexperienced, cheap employees who don't know what they are doing and make a mess of things.
Sun, 09/07/2014 - 4:02am
Good old Bridge magazine. Never saw a democrat position they didn't like.
Sun, 09/07/2014 - 8:21am
Oh, yeah - that's why AmWay and the DeVos sponsor it. Did you even read the article and think about it?
Connie Glave
Sun, 09/07/2014 - 8:02am
We are still the richest country in the world, so we can afford worker wages and benefits. People forget that Pres Reagan cut taxes on extreme wealth from 70% to 28%, changing the incentive from keeping the money in the family for long term sustainability to vulture capitalists devouring the family businesses, installing predatory CEO' who are now on each other's boards and vote each other massive compensation. Unless we deal with the shift of wealth from the middle class to the very wealthy, most people elected to government will have little effect on the system.