State of the State

Background: I was invited by the editor of the Farmington Observer to comment on Gov. Jennifer Granholm's State of the State speech

What stands out most from Governor Granholm's final State of the State speech is its timelessness. The same speech could have been delivered at any point in her term and it would have been relevant. In fact, each year's speech has been pretty much the same - education reform and jobs. Each year we're told to expect reform in our education system and each year we get the same results - wasted money, low test scores, and some new program from Washington DC that will bring improvement - tomorrow. Always tomorrow.

When not plugging education reform, her speech focused on jobs and how the state plans to create them- more investment, more targeted tax credits, and more sweetheart deals for select industries. In the beginning, the focus was the internet and information systems, then biotech, now the green industry. Yet in spite of all this focus, unemployment continues to rise while she blames outside forces - foreign trade, recession, and some mythological transition from an "old" economy to a "new" economy. The basics for a thriving economy have not changed. Granholm fails to understand that government does not create jobs. The jobs that appear to be created come at a cost of jobs unseen. A dollar used by Lansing to lavish on the latest darling industry is a dollar taken out of the wallet of a private citizen or business owner who would have invested or freely spent that dollar on a desired product or service. Perhaps that product or service wouldn't be as glamorous as the movie industry but at least taxpayers wouldn't be subsidizing it.

Granholm claims she wants to diversify our state's economy by spending tax dollars on select industries. Like so many before her, she suffers from what economist F.A. Hayek called the "fatal conceit". This is the belief that a single mind or a single committee can somehow do things better than the spontaneous, unstructured, complex, and creative forces of the market. After 7 years of trying to manage Michigan's diversification, it's long past time to reduce the cost of doing business in this state for every industry. Make Michigan attractive for all and diversity will flourish on its own.

To her credit, Granholm has proposed a number of reforms to cut government spending. Some will produce permanent savings while others are simply band-aids to slow the bleeding. However, as a group, they are too little, too late. In addition, she called for a much needed constitutional amendment to fix the budget process. However if she had been an effective leader by proposing and implementing structural changes to the state government over the previous 7 years, the budget battles would never have been fought.

Resulting story: Farmington Observer

Comments were published as a letter on 02/11/2010.