Friday, December 26, 2008

Leave a legacy, Gov. Granholm

The worst kept secret in Lansing this year has been how much Jennifer Granholm wanted to skip town -- and how badly folks from both parties were dying for her to do just that.

After the governor was named to Barack Obama's economic transition team, most of Lansing's chattering class considered her a lock for a cabinet post. Evidently, the New York Times was convinced enough to run a cover story and all the networks came calling.

Around the corridors of the Capitol, Democrats could be seen crossing their fingers that the governor's name would be announced. And Republicans grumbled that although she certainly wasn't qualified for Labor or Energy Secretary, Granholm could sell anything.

The general sentiment among legislators was that they'd love to spend the next two years working with Lt. Gov. John Cherry, especially with the sorry shape the budget's in. And Democrats relished the idea of him waltzing into the 2010 election as an incumbent.

But after weeks of Obama's methodically laudatory press conferences, which had to be a form of Chinese water torture for the guv, she surfaced with bupkis.

Last week, she quickly put out the word that she wanted to stick it out here, "given all the crises Michigan is facing." But it was painfully clear that Granholm had been passed over for Labor and was allowed this face-saving gesture by Team Obama. Sure enough, a California congresswoman nabbed the post two days later.

That's not to say Granholm will walk away empty-handed in the long-run. Not all cabinet nominees make it through the confirmation process or serve a full term. And after her rave reviews for conducting the Kwame Kilpatrick hearing this summer, she'll certainly be on the federal bench list.

But it's a significant blow. Republicans will undoubtedly try to pounce on her weakness in negotiations, although after the beating they took on Nov. 4, they're pretty anemic themselves.

The more salient issue is why so many lawmakers of both parties were terribly eager to throw the governor a goodbye party.

In reality, this sentiment really isn't anything new; it's just reached a fever pitch after last year's government shutdown and it looked like Obama was generously posing a way out.

Granholm arrived at the governor's mansion via the attorney general's office, not the Capitol, and her lack of legislative experience has always caused tension. Like Bill Clinton in 1993, the governor frankly didn't get how the process worked and it's cost her dearly.

She's made deals that she's quickly reneged on, as even Democrats gripe, which has long eroded trust with lawmakers. Now that Senate Minority Leader Mark Schauer, D-Battle Creek, is hightailing it to D.C., she's lost her biggest legislative ally. House Democrats are far more loyal to Speaker Andy Dillon than to her, something of which she's well aware.

Meanwhile, Senate Majority Leader Mike Bishop, R-Rochester, has a visceral disdain for Granholm. He recently sniffed to the Wall Street Journal that she "likes to be governor more than she likes to governs," which is kind of like Ken calling out Barbie for vanity.

All this means that we can look forward to a couple of years of fabulous friction, as 2009's budget hole is at least $265 million and 2010's is a jaw-dropping $1.5 billion, unless Obama's federal stimulus saves the day. Granholm, Dillon and Bishop are all term-limited, as well as a good chunk of the House and all but eight senators, which means a lot of folks will be lookin' for work instead of workin' full-time for Michigan.

Out of crisis can emerge great leaders. There seems little hope for that in the Mitten State, if the '07 government shutdown is any guide. But it's legacy-building time and this is the governor's shot.

Few honest Republicans would dispute that she is immensely intelligent, persuasive and personable. No one is more aware of the problems Michigan faces than she is.

So in her final two years, Granholm should draw on her talents and be the leader she has always had the potential to be. Start with slashing the bloated Corrections budget and dumping the Michigan Business Tax surcharge. Revisit the idea of doubling the number of college graduates by 2015 and make sure we're on track. Have the courage to fix the structural budget deficit by pushing for a ballot question on a graduated income tax.

For years, Michigan has passed a slew of economic development measures to lure new businesses. The time now is to look long-term for the state's fiscal health.

None of this will guarantee her a job with Obama. In reality, it probably won't help much. Her polls numbers aren't going anywhere but down as the economy plunges south.

What will help is that Granholm has the highest national profile of any governor in modern Michigan history. She'll continue to get invites for "Larry King" and "Good Morning America" about the Big Three. It would be very tempting to rely on that exposure to net her next job.

But that won't do a damn thing for Michigan.

Granholm promised to "never stop fighting" for us. It's been six long years and talk is cheap. Governor, the time to act is now.

Friday, December 19, 2008

The GOP kisses the Rust Belt goodbye

Do the Republicans ever plan to win Michigan again? How about Ohio, Illinois or even Indiana?

Before the gang of GOP senators killed the $14 billion bridge loan for Chrysler and General Motors last week, they unleashed an ugly Southern snobbery about us Rust Belt rubes. And they just might have strangled their chances in here for years to come.

Let's not forget the GOP just lost the entire region to the man who will become the first African-American president, save for West Virginia. The Republicans only have one governorship here, in Indiana. Evidently, U.S. Senate Minority Leader Mitch McConnell & Co. want to finish the job.

So they decided to bludgeon the Big Three while they were down and suffocate the United Auto Workers while they were at it.

Maybe they sincerely believe the domestic autos will be better off in bankruptcy. Maybe they expected President Bush to come to the rescue all along. Maybe they really think Honda and Toyota plants in their states would blossom if the domestics died, even though company executives warned they'd suffer because many of their suppliers would go under.

Maybe they were genuinely offended by the idea of the government messing with capitalism, although that didn't stop many of them from dumping $700 billion in the laps of Wall Street investment bankers.

But a leaked memo from the Senate GOP reveals it was all about politics and payback to the unions: "Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it."

So much for principle. It's nice to know that our friends from Dixie were willing to play Russian roulette with 3 million jobs, spark a depression in the Midwest and cost taxpayers four times as much money as we'd be out with the bridge loan. Why not? Serves the evil UAW right.

Look, the loan is unpopular nationally, so this may be a good tactic. But it is insanely poor strategy if Republicans want to stay competitive in the Rust Belt and its pool of 151 electoral votes.

You can't just write off a region and expect to be a national party. That's why Barack Obama competed hard in the South and West. It paid off when he piled up an electoral landslide and padded Democrats' margins in Congress.

Michigan Republican Party Chair Saul Anuzis gets this. His main appeal in his quest to head the Republican National Committee is that he's only guy who knows how to get Reagan Democrats back.

Presumably, it's not by stripping them of jobs and sneering that it's their fault.

Midwest Democrats will retaliate in kind for the Big Three and are chomping at the bit to finish off Republicans in 2010 and beyond.

Gov. Jennifer Granholm is already on the attack, blasting senators willing to risk a depression as "un-American" and questioning their loyalty to foreign companies at the expense of U.S. workers. It's a crude rhetorical flourish on steroids, but it's enough to earn a megaphone on "Meet the Press." That kind of red-blooded American chest-beating puts her on the offensive and makes Republicans spluttering to defend their taupe Toyota Camrys look like girly-men.

Translation: Democrats strong and patriotic. Republicans weak and love foreigners. Shamelessly jingoistic, sure, but it effectively flips the post-9/11 conventional wisdom on its head.

Meanwhile, just where are the Republicans? Yes, the entire Michigan delegation voted for the $14 billion, save for U.S. Rep. Tim Walberg, R-Tipton, who claims he was recovering from surgery. But why have GOP leaders been avoiding TV cameras like the plague? You can't keep Granholm; Sen. Carl Levin, D-Detroit; or Rep. Sandy Levin, D-Royal Oak, off the news.

The notable exception is U.S. Rep. Fred Upton, R-St. Joseph, co-chair of the Congressional Auto Caucus, but he's largely preferred to operate behind the scenes.

Most have opted for silent support as the Big Three teeter at the abyss. You can point to a blog post by U.S. Rep. Candice Miller, R-Harrison Township, here, or an op-ed by Attorney General Mike Cox there, but there's no real face of the GOP during this crisis.

This would seem to be the perfect time for one state Senate Majority Leader Mike Bishop, R-Rochester, to grab the spotlight, as he'd like Cox's job and could use some positive press. Indeed, the White House has pushed him to do it. But despite backing the Big Three, he seems paralyzed about taking the lead, almost as much as he is about setting an agenda in the Legislature.

The result is a power vacuum, with Granholm often battling Mitt Romney in the national media. Republicans, do you really want the guy who doesn't care if Detroit dies, who last lived in Michigan when polyester pants were groovy, as your mouthpiece? Come on. He's not even going to merit an invite to your county Lincoln Day dinner.

This is a chance for Republicans to remake their image after two straight electoral thumpings. What's good for Michigan could be very good for the GOP -- but no one seems to have gotten that memo.

Friday, December 12, 2008

A death sentence for Detroit

Polls show most Americans don't want Uncle Sam to help the Big Three and I couldn't care less.

They're wrong, plain and simple, but it's not entirely their fault. The amount of misinformation floating out there on ye olde information superhighway and from TV anchors who should know better is staggering.

Certainly there's a bit of bailout fatigue. The $15 billion bridge loan that cleared the U.S. House on Wednesday is a lot of money. Senate Republicans slayed it Thursday and the deal looks dead.

This would be utterly devastating for the U.S. economy - not just Michigan's.

Now would be the perfect time for U.S. Sen. John McCain, R-Ariz., to be the statesman he is and end this political brinksmanship rooted in deep-seated denial of financial reality. He got hammered this fall for suspending his campaign to push for the $700 billion Wall Street bailout. No one could accuse him of playing politics now; this would simply be bold action for the good of the country.

The fact is, letting just two of the three domestic automakers go bankrupt means the death of 1.8 million jobs in just the first year alone.

Still don't care? Won't affect me or my state?

Try this. Taxpayers will see $66 million swirl down the drain in two years if just two of the companies go bankrupt. Bye-bye tax revenue; hello unemployment insurance.

The cost of bankruptcy is more than four times what the autos could get from the feds, according to a report by the Anderson Economic Group. CEO Patrick Anderson is a staunch fiscal conservative, so it's striking that he's not arguing that the free market should be allowed to work here.

The reality is, the more economically prudent solution is the bridge loan. Every taxpayer in America should be treated to a copy of this report.

Unfortunately, this won't stop the Big Three bashing because it's too much fun. What we have is an axis of ignorance of far-out environmentalists and free-market Republicans.

The left whines that Detroit's gas-guzzling dinosaurs rape the planet and there's karma in letting them wheeze out their last breath. Their greedy CEOs sucking up $20 million bonuses are the living symbols of what's wrong with capitalism.

Yeah, not very powerful stuff. That's why this hasn't really gained traction and even big-time liberals like U.S. House Speaker Nancy Pelosi are willing to lend Motown a hand.

The right, however, is scoring big with its version of economic nihilism run amok. It's the unions' fault, of course, and even reputable media are selling the falsehood that workers make $70 per hour. The New Republic has nicely debunked this myth and you'll notice that conservatives in Michigan, no matter how anti-union, haven't jumped on this bandwagon.

U.S. Sen. David Vitter, the Louisianan best known for using the services of the D.C. Madam, this week derided the bridge loan as being "ass-backwards" in a rambling speech that proved he knows a lot more about hookers than economics.

Southern Republicans smugly brag that their foreign plants will flourish if the domestic autos combust. Yeah, here's the problem. When auto suppliers start croaking - and they will - Honda, Volkswagen and Toyota will bleed, even more than they are now.

By the way, Japan, China and Germany haven't had any problem bailing out their automakers. Kind of an unfair disadvantage, don't you think?

Both sides agree that the Big Three got too fat and happy (true) and churned out cars people didn't want to buy (also true, but now even Toyota's sales plummeted 32 percent last month). Why? The credit crunch, which has pushed the Big Three to the brink, just as they were making the labor and technology overhauls they need to thrive.

Peel away the political spin, and that's the real cause of the current crisis.

But when economics get too complex, there's always the shorthand of blasting the Big Three titans for their nasty corporate jet habit.

There's a disingenuous double standard at work. The bridge loan pales in comparison to the tens of billions of dollars the feds have thrown at financial institutions like AIG and Citigroup. Their executives somehow escaped begging on Capitol Hill but the Big Three's humiliation (twice) provided hours of entertainment on C-SPAN.

At this point, the Big Three need a Christmas miracle. This is not a regional issue, but it's looking like Michiganders need to lead the way - and not just at the federal level.

Gov. Jennifer Granholm; Senate Majority Mike Bishop, R-Rochester; and House Speaker Andy Dillon, D-Redford Township, should be holding daily joint press conferences on the car crisis.

There are still some Mitten Staters who believe that Ford, GM and Chrysler are getting what they deserve and the rest of us will somehow be hunky-dory. They need to hear a strong bipartisan counterpoint to the dead-enders.

Letting the Big Three die isn't just cutting off our nose to spite our face. It would be a decapitation.

Saturday, December 6, 2008

What’s good for Michigan is good for the Dems

No matter how you voted Nov. 4, it would be hard to argue that the Democrats are bad for Michigan.

For starters, the Mitten State may be in line for $600 million or more from Washington, thanks to President-elect Barack Obama's federal stimulus proposal. We could get a shot in the arm for big infrastructure projects (I-94 could be widened at last!) and a bigger federal match in Medicaid funding (could we get the same sweet deal as Alabama? Dare to dream).

Those following our ongoing state budget nightmare know that federal funds could go a long way to plug the current hole, which is anywhere from $400 to $900 million. And a few large-scale construction projects will help tamp down what will soon be double-digit unemployment.

But wait, there's more. Democrats, even uber-liberal U.S. Speaker Nancy Pelosi, D-Calif., are the loudest voices pushing for help for the Big Three. Chrysler, GM and Ford now say they need a $34 billion bridge loan to stave off bankruptcy.

If the domestic auto industry fails, this will in all likelihood spark a depression, just as Chrysler Vice Chairman Jim Press warns. Three million jobs will be lost in the first year alone, according to the nonprofit Center for Automotive Research.

Yes, this would be a debacle for Michigan, but anyone who says this ain't a national problem (U.S. Sen. Richard Shelby, R-Ala.) should be forced to take a Breathalyzer.

Right now, Democrats are the only thing standing between Michigan and disaster. And that should absolutely terrify the divided and nearly decimated GOP, which is praying for a comeback in 2010.

To be sure, there are some Republicans making noises against these moves, although none that I know of in Michigan. If U.S. Rep. Tim Walberg, R-Tipton, hadn't just been axed by the voters, I'm sure he'd add his voice to the free-market choir, but he's busy lookin' for work. Walberg, it should be noted, is the only member of our congressional delegation who's still on the fence about rescuing the Big Three.

This week, more than 40 governors, including Jennifer Granholm, lobbied Obama for at least $136 billion in infrastructure projects. No less than 43 states are facing budget shortfalls and some, like California, have flirted with the idea of asking the feds for an outright bailout.

Govs. Rick Perry of Texas and Mark Sanford of South Carolina didn't join in the reindeer games. Instead, they penned a sanctimonious op-ed in the Wall Street Journal sniffing that the joy of capitalism is that "winners create wealth, jobs and new investment, while others go back to the drawing board better prepared to try again."

Successful states will pull through this crisis. As for you 43 losers, good luck and try again. What this means in the real world is unclear. When a business fails, it closes (except giant, multinational banks). If states go under, what exactly happens?

Unlike the federal government, states have to balance their budgets. Thanks to the credit crunch, it's harder for states (and everyone else) to borrow funds to get through.

This isn't to say that Michigan should halt plans to aggressively reform and consolidate government and hack the budget. Indeed, we have no choice. Our fiscal problems won't go away even with a generous check from Mr. Obama.

But there is justice in getting some juice from the feds. Let's not forget that Michigan only gets 90 cents back on each dollar we send to Washington, whereas Alaska gets $1.87.

States already have slashed $7.6 billion this fiscal year and more cuts will have to come. But it's conceivable that some will have to cut so massively that their governments will have to partially shut down.

This is when the Ayn Rand crowd gets really excited. Let government fail. Individual liberty for all. Throw the bums off welfare. Nobody needs to be able to have trash collected or flush the toilet. Private enterprise will take over (eventually). Until then, ignore the stench.

The let 'em fail ethos might fly in Texas, one of the seven lucky states sans deficit. But I doubt Michiganders will be as charitable. Look at the Herculean struggle Democrats and Republicans alike have had in slashing the budget in years past. Remember, cutting taxes is fun. Education and health care, not so much.

This is a losing argument for Republicans. Why? You're asking people to go against their self-interest in the name of ideology, to turn down federal money that could make their state and their lives better. Not gonna happen.

The scarier concept for conservatives is that Ronald Reagan's maxim (government is the problem, not the solution) showed its age in the last election. Polls show Americans are willing to go the big government route if that will pull us from the jaws of economic crisis.

Now folks still don't want their taxes raised, to be sure, but the ideological debate is shifting away from the right. Obama has shrewdly outflanked theme GOP by promising bigger middle-class tax cuts.

Our new president may have just tapped into the winning formula for the Democrats to run the show for awhile. Hard to remember that a year ago, Barack Obama was universally savaged for being hopelessly naïve.

Oh, how Republicans must wish he was.