Michigan's wave of success not yet enough to buoy all hopes

MACKINAC ISLAND, Mich. -- Gov. Rick Snyder was positively upbeat and beaming this week when he opened Michigan's annual big meeting of political and business elite.

"We are the comeback state in the United States right now," he told an enthusiastic audience at the Detroit Regional Chamber of Commerce's Mackinac Policy Conference.

The governor recounted the state's successes and urged the attendees to continue working on creating a more entrepreneurial culture. "Now isn't the time to be satisfied," he told the assembled executives, politicians, and media types, who would soon be grazing on fancy appetizers and drinking free expensive wine.

"Make this an event that makes a difference," he added.

The next morning, the governor had to admit he'd been defeated in a battle over one of his main legislative priorities. He had proposed a series of transportation funding reforms that would raise a badly needed $1.4 billion a year to repair and maintain Michigan's crumbling roads and bridges.

Highway experts virtually were unanimous in agreeing that the road money is essential just to prevent Michigan's highways from deteriorating further. But the Tea Party faction of the governor's own Republican Party insisted on no new taxes, no matter what.

Other GOP members of the Michigan House, all of whom have to run for election this year, feared primary challenges or voters staying home if they supported the road bills, which went nowhere, the same as last year. Finally, the governor took them off the table.

"This is something we have to get done," Governor Snyder said with some frustration, but admitted "it would be hard to do before the election."

That is a perfect example of a main contradiction that surrounds Michigan's attempts to reinvent its economy. Everybody understands that the brawn-based days that provided lots of good-paying jobs for low-skilled workers are gone forever.

Everybody agrees that the state badly needs a better-educated work force, though there is less agreement about what that means.

The theme for this year's Mackinac conference was "innovation, collaboration, and the 21st century global market." The governor and others urged attendees to forget the wars of the past.

Yet too few seemed willing to make the sacrifices needed for a successful future. The conference's keynote speaker, CNN journalist Fareed Zakaria, got nods and smiles when he said America had to get its entitlement spending under control. There were fewer smiles when he called on the attendees to support new taxes and spending to invest in the future -- especially education.

"At some point, we have to pay our bills," he said, heaping scorn on congressional Republicans for their unwillingness to consider any revenue increases, even if Democrats are willing to cut more than three times that amount of spending.

If there was a uniformly inspirational note, it came from a group of young business leaders who stressed the need to continue fostering an entrepreneurial culture in Michigan. Dave Zilko, who turned a $5,000 loan from a girlfriend into a salsa manufacturing company worth $110 million, urged people at the conference to take risks.

"We are seeing a new mind-set that says, 'We can do this,'" he said.

Yet nobody said that complete comeback will be easy in a state that lost more than 800,000 jobs in the past decade. In a breathtaking off-the-cuff tour of the world economy, Mr. Zakaria argued that the long-term outlook is actually far better than commonly believed.

No country is experiencing hyperinflation today, he said. Since the fall of the Soviet Union, there is for the first time a single world financial system. He added that when recessions come, job creation tends to lag longer and longer behind official recovery.

Before the 1990s, it normally took an average of six months after the economy returned to post-recession levels for the number of jobs to get back to where they had been, he said. Since then, that has steadily lengthened.

Today, Mr. Zakaria said, it takes 5 1/2 years for employment to bounce back, even when the economy regains pre-recession levels. Significantly, he offered no solutions.

Nor is the need for culture change limited to those who are trying to start businesses. During a discussion of how Michigan and Washington might work together better, Democratic U.S. Rep. Hansen Clarke of Detroit talked about the difficulty of reaching some people.

"We need to restore a culture that values education," he said. Many of his inner-city constituents are desperately poor, and many can barely read and write.

"When you have that background, there often isn't a lot of support for education in the home," said Mr. Clarke, who escaped poverty by winning a scholarship to Cornell University.

While minorities may need to adjust their attitudes, the congressman said he wasn't comfortable with the sentiment that the government can't create meaningful jobs.

"Once, when I was at a low point in my life, I got a job through a government program that restored my dignity and self-respect," he told a mostly silent, mainly white and affluent audience.

What seemed clear at this year's Mackinac conference is that Michigan has evolved since the auto industry's worst days. There is little sign of a rising tide vigorous enough to lift everybody's boats, much less any agreement about how to catch the proper wave.

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade's ombudsman, writes on issues and people in Michigan.

Contact him at: omblade@aol.com.