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Published: Friday, 9/15/2006

An economist's 'buy-the-book' look at Michigan's future

DETROIT - Charlie Ballard knows his new book will never be a best-seller. But if a few of the right people read it - and lots of them should - Michigan might be much better off in the long run.

The book is called Michigan's Economic Future (Michigan State University Press, $17.95), and if that title makes you fear that you might fall asleep just thinking about it, think again.

Mr. Ballard may be an economics professor at Michigan State, but he is also an excellent writer who can easily be understood by any intelligent reader. And any intelligent reader who lives in or cares about Michigan ought to read this book.

The title actually should be, "How to Make Sure Michigan HAS an Economic Future." Right now, not only are things looking gloomy, but those in the know generally agree the picture is worse than most people realize. Most of the planned auto layoffs haven't hit yet. Their ripple effects haven't even started to take a toll. And those jobs are never coming back. Michigan needs something new, badly.

"If I could accomplish one goal with this book, it would be to convince my readers of the seriousness of Michigan's economic situation, and the need to adapt to new circumstances," he writes.

"Half a century ago, the world was knocking on Michigan's door. But yesterday is gone, and it is not coming back. If the people of Michigan are to achieve a brighter economic future, we will need to develop new ways of thinking, and new ways of engaging with the rapidly changing global economy."

What that means is an attitude adjustment for both conservatives and liberals.

Mr. Ballard, a Princeton alum who has been at MSU since 1983, is not all doom and gloom. He thinks his adopted state does have a lot going for it. There is still a lot of high-tech manufacturing going on, he notes, and a skilled work force.

But not skilled enough. Michigan needs to invest more in education - and he believes strongly that the state needs to raise, not further cut, taxes. His book shows that, despite the myth, Michiganders pay less in taxes than most other Americans.

The economist would like to see the revenue lost from the just-repealed Single Business Tax replaced in full - but not by a corporate income tax.

Rather, he thinks the state income tax should be increased, and made much more progressive.

The state sales tax also could provide much more revenue if it were to be extended to services, as well as goods. Why should there be tax on a car but not on a session at a tanning salon?

Most of all, he thinks the state needs to invest, and invest heavily, in every level of education. If the people of Michigan are going to make long-term economic improvements, their top priority should be to increase the skill level of the population.

Some conservatives may not like that; liberals won't like his insistence that something be done about bloated and unrealistic public employee - especially teacher - pensions.

The economist offers intelligent and useful suggestions on everything from prisons (the state could save a bundle by making better use of halfway houses) to roads (we'd all be better off if we built them better, and focused more on repairing urban streets.)

More than anything else, Charlie Ballard thinks the state needs to snap out of a counterproductive nostalgia for the past. Tailfins aren't coming back, and neither is the 1950s economy.

"It is time to replace (them) with a new set of attitudes - creative, highly skilled, flexible, and entrepreneurial."

"If we can make the transition to a new mindset," Mr. Ballard muses, "and learn how to aggressively market the state, we really can achieve a vibrant economic future."

One can only hope. And wish that somebody could lock both major party candidates for governor in a room for a few hours with a copy of Charlie Ballard's slim, 188-page book.

Then maybe they wouldn't think new tax cuts or China-bashing would solve all Michigan's ills. We can, even in the heat of a campaign, do better than that.

Mr. Ballard ends by quoting the guy who coined the term Michigander, one Abraham Lincoln.

Odds are that Lincoln never gave a thought to Michigan's economy, which was virtually all agricultural in his day. But he did tell Congress this, early on in the Civil War:

"The dogmas of the past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must think anew and act anew and then we shall save our country."

Maybe, even our state.



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