Michigan, let's target and sideline special interests

Travel often gives you new ways of looking at things … and that is certainly true of travel to China. My wife Kathy and I just got back from visiting our son, who lives and works in Shanghai.

We were there for 10 days, and it’s good to be home. But even through the fog of jet lag, the trip gave us plenty to think about.

And the main thing that hit me is what the Chinese are doing with their infrastructure.

The trains are amazing. Our run from Beijing to Shanghai ran silently at a posted 303 kilometers an hour (that’s 187 miles per hour!) on an absolutely smooth rail bed. Seats felt like the first-class section of an airplane, with attendants bringing lunch and good views from wide windows.

The roads were wonders to behold, especially in Beijing, where virtually every one had trees, flowering roses and shrubs planted alongside, all well-maintained and weeded. The expressways were well designed and in good shape. (Traffic congestion in the cities was worse than anything we see here -- which isn‘t surprising, since automobile ownership in China is growing at an enormous rate.)

The contrast with what we have here at home could not have been more striking. We’ve basically strangled our railroad system.

Sadly, we get delighted at news that the rail line between Detroit and Chicago will be improved enough to run at 60 mph. And, as anybody who drives in Michigan knows, our roads are still a mess.

So what’s going on here?

Naturally, we need to consider that it’s easy for the Chinese to build roads and railroads. The government doesn’t have to worry about private ownership or public opinion. It controls all the land, and ordinary people don’t have much say in an authoritarian regime.

China also has lots of cash to invest in their infrastructure -- which, sadly, isn‘t the case with us anymore.

And when you have a dictatorship as they do, it isn’t hard to make serious political decisions and get them done quickly. Meanwhile, America’s politics are so gummed up these days that it’s hard to get anything done.

 Part of the problem here, clearly is that our system is set up so that many varied interest groups are so deeply embedded in the political system they can veto just about anything they don’t like.

Think Ambassador Bridge owner “Matty” Moroun and his, so far, successful efforts to prevent building the New International Trade Crossing over the Detroit River, a bridge virtually everyone else in Michigan's business world wants.

Think Detroit, where politics and unions are hobbling efforts to implement the consent agreement that might save the city’s finances.

By contrast, one of the remarkable successes o fAmerica’s private sector is how in recent years the processes of “creative destruction” have weeded out the inefficient and ineffective. Whether working through hedge funds and private equity groups (think Domino’s Pizza) or the workings of the bankruptcy laws, American companies, as a whole today, are far more productive, efficient and profitable than they were just a decade ago.

Why hasn’t something like this happened in the public sector, where things like transportation infrastructure, health care and education are far too ineffective, bloated and unproductive?

One answer: Such activities have been sheltered for years from the bracing winds of competition by government preference and support. So, argue many, take away their sheltered monopoly status. For example, to force public schools to improve, create competing charters.

Those on the political right usually want to do away with as much government as possible. That may be a valuable instinct, but, taken too far, it runs the risk of throwing out the public interest baby with the monopolistic bath water.

Short-changing our schools and universities, for example, hasn’t seemed to make our people better educated.

Meanwhile, those on the political left resist meddling with government-protected sectors, because they fear damaging society’s safety nets. But without the kinds of far-reaching changes that have so improved America’s corporate sector over the past decade, we could easily continue to spend more and more -- while achieving less and less.

To me, it seems clear a more fruitful approach would be to identify and attack those interests embedded in the system that hold veto power over efforts to change things.

In the case of schools, look to the unions.

In the case of public transport, look to the veto power of public sector unions like Amalgamated Transit Union Local 312 and AFSCME Local 36. They represent the Detroit bus system’s drivers and mechanics and have held up efforts to create an efficient region-wide bus system.

In the case of health care, look to the enormous market power of the big drug and insurance companies. (Don‘t expect hospitals to be change agents either; they pretty much like things the way they are.)

How do we get past all this? What we need to do is identify and sideline those special interests that have veto power against changes to the workings of our public sector institutions. That approach, neither Chinese authoritarianism nor left-wing protectionism, seems most likely to offer an effective policy route to change.

The kind of badly needed change, that is, that Michiganneeds to compete for jobs and prosperity in the future.

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 chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email.

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Tue, 05/29/2012 - 10:19am
You left out one other very important reason China's infrastructure is amazing. They have over a billion people and they all want jobs. As soon as China has built all the roads, dams, airports, empty cities and train tracks they can build the people will not have jobs and they will rise up. This is part of the reason the Chinese pull up entirely good sections of road just to repave it. If the people aren't kept active and busy they will rise up against the regime. As soon as that new Chinese middle class all have two cars, but no jobs it over for China.
Tue, 05/29/2012 - 10:58am
Tue, 05/29/2012 - 1:59pm
I guess what you are saying is if our democracy didn't bestow so many rights such as, life, liberty and the pursuit of happiness on ordinary people, we would have far less problems. Well, since we are on the way to becoming a fascist autocracy under the Repuglican Party and corporate AmeriKa, we will have far more ordinary citizens living substandard lives, but, we should look forward to having an improved society. How about the elites, the 1%, what will they give up, or should we not expect that? Will they just go on their merry way siphoning off the wealth of our nation and bundling it into their investments in other nations, like China for instance? Seems like if one segment of society, labor for instance, makes extreme sacrifices, then all segments, CEOs for instance, should extend themselves as well. So far sacrifices seem to be falling solely upon the shoulders of the working man. As far as education is concerned, yes, some reform is needed, but, so far charter schools are not showing much better results than the average public school.
Wed, 05/30/2012 - 1:58pm
Well said. Unions are a much smaller problem than for-profit greed as in health care. Travel to Germany sometime and research their free educational system and health care where a third of the population are union members with an economy stronger than our own. America's "public" VA health care system that veterans would die to defend is more similar to most other developed countries including France and Canada and costs 30% less to run than our for-profit system. These countries do a better job providing quality care to everyone without forcing families into bankruptcy. Citizens might have to wait longer for non-emergency care, but they've decided the rich and poor should be treated equally in this area. Anyone who has traveled to these more progressive countries will be usually pleasantly surprised at the affordability and quality of care as I was in Malaysia. America does not have the best health care for all. Let our roads crumble and let all the gas-guzzling SUV's actually use their 4-wheel drive while we build safer high-speed rail that is much cheaper and faster to build than roads made out of oil. I'm sick of reading about traffic fatalities. Take the trillion we just spent on unnecessary wars and rekindle Michigan factories. As American wages drop and cars rise in price, it's time to change direction. Let's look to the future.
Tue, 05/29/2012 - 5:05pm
Detroit's population is less than half it was in 1950. Detroit's jobs have been largely outsourced to other countries. Detroit's income from property taxes is down because of companies that have left and the burst housing bubble. Detroit's income from state revenue sharing is down nearly 30% in a decade. Detroit's income for schools is down because of reduced property tax revenue and state revenue. Detroit's schools have been under the control of the state for a decade. Detroit's declining schools has led to greater population decrease. Detroit's charter schools are causing an even greater shift from the public district. Detroit has a long history of corrupt public officials. There's lots wrong in Detroit, public unions have had little to do with the problems and busting public unions won't cure any of the problems.
Mike Ritenour
Wed, 05/30/2012 - 6:14pm
I appreciate Phil's effort at even-handedness in attempting to identify embedded obstacles to reform. I have a difficult time, however, equating teachers unions with pharmaceutical companies in terms of relative clout and ability to obstruct progress. I think the way the legislature and governor crushed, and continue to crush, all opposition in their race to the education bottom is ample proof that the teachers unions may be a convenient target and rallying point for the radical right, but in reality they cannot even protect the most basic of previously sacrosant rights (e.g. tenure and health care) and are standing in the way of nothing. The real obstructions to progress, in my opinion, remain the political idealogues (the Tea Party being the current best/worst example) whose mindless devotion to single issues brook no compromise or discussion. They are taking us on a long, rambling detour away from reform, wasting precious time until, as will inevitably happen, they are exposed as self-centered frauds no different than the Morouns. We will then be able to reason together toward the common good, but by then it may be too late for public schools, public transportation, infrastructure, and Detroit. And the idealogues will have won.
Thu, 05/31/2012 - 7:37am
I think special interests are involved in many areas. For those of you traveling and seeing China's and Germany's efforts in Renewable Energy...We continue to debate and argue over an energy strategy for our future, and our children. We continue with our dumbed down group to think we can drill and mine our way out of our energy situation. There many more consumers of the worlds precious oil and coal and lets include water than anyone saw 20 years ago... Wake up folks. Yes Renewables are somewhat expensive da, DO YOU THINK buying energy decades into the future is going to be CHEEP !! We if we invest in that ...in 20 years it could be " Pricless" Think about who forms our ideas about energy? Maybe power companies and oil companies? They have deep pockets to spread there message. Please give this some thought...