Public Investments, Part III

So if the prestigious Milliken/Blanchard panel laid out a framework for state policy makers on tax and spending policies that will help grow the Michigan economy, why have their recommendations been ignored?

I think there are three main reasons:

1. As we have learned the last several years both raising taxes and cutting spending are hard. They have to be done, but no policy maker gets rewarded for doing either. So when folks like us come along and say you need to do more of both so as to create the resources needed for priority public investments, we are asking policy makers to take actions that most of their constituents don’t want.

2. Few policy makers believe public investments are important to growing the Michigan economy. Our framework that talent is what is driving the economy so that preparing, retaining and attracting talent is the economic growth priority is not widely accepted. Spending on higher education and quality of place – our priorities – are viewed by most policy makers as not strategically important. They are just another category of spending competing with all the other categories of spending.

3. Which leads to the final barrier: no business leadership. We have long asserted that business leadership is needed even more than political leadership. Elected officials need a constituency for their actions – particularly when they are asking people to make sacrifices. Getting the resources for the needed public investments will involve a lot of sacrifices. Someone with clout and credibility needs to be publicly urging policy makers to follow this path.The folks with the greatest clout and credibility on the economy are business leaders. Unfortunately, by and large, public investments have not been on their priority list. Instead its the usual lower taxes, less government mantra.

Those of us who believe public investments are the most important action policy makers can take to recreate a high prosperity Michigan need to recognize these three barriers to action and develop new ideas/strategies for how we overcome them.

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.

This Post Has 2 Comments

  1. Dear Sir,

    Anyone wanting to imagine a better economic future for Michigan has only to revisit a map of North America and see what’s sitting on top of the State:ie. Canada. While viewing the map, try imagining pipelines (shipping routes, bridges, rails, flight paths, etc.) funneling into and out of the State.

    We are missing the opportunity of becoming the hub of US/Canadian commerce because we are not pursuing an aggressive enough plan to increase pipeline infra-structure that would make this vision possable. Goods and services tend to flow in the direction of least resistance, wouldn’t you agree? But, Michigan till now refuses to see this solution to it’s economic prosperity.

    Thank you.
    James D Gohl

    1. Good suggestion. I’m skeptical of any one idea being a “solution” to our renewed prosperity. But taking advantage of our proximity to Canada – as part of a larger trade/logistics sector – makes a lot of sense to me. Its all part of the larger theme that public investments in areas like transportation infrastructure are an important component on the path back to prosperity.

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