2012 Predictions

Surprisingly I have received lots of requests for my annual predictions. So here goes a little late.

Our work is focused on the long-term. How Michigan and its citizens can better position themselves to do well economically in a flattening world. I certainly don’t claim any special ability to predict year to year results. If there is anything we have learned in our work it is that unpredictable, disruptive events that cause big changes are occurring more and more frequently. Being able to adjust quickly to new realities is now a major competitive advantage for communities, enterprises and individuals.

That said it is highly likely that 2012 will be the second consecutive year of job growth in Michigan. Good news after an unprecedented decade of annual job loss. As I wrote in last year’s predictions: “The chief reason for those employment gains is once again the domestic auto industry. The same engine that has driven Michigan for the past century.” An engine that was restarted largely by the $83 billion federal government bailout. No bailout, no turnaround. End of story.

Other sectors – some auto related, some not – will also see job growth. All in all, on the jobs front, modest progress is the likely outcome. Good news!

Another area of good news will be the continued rebirth of Detroit in its downtown and midtown neighborhoods. For the rest of the City it will almost certainly be another year of decline. Huge problems still plague the City. But with foundations and corporations leading, the core of the city is beginning to attract new residents and businesses.  And greater downtown Grand Rapids should also enjoy a year of growth as well. Both cities – in their greater downtown area’s – are likely to see more young professionals and business moving in. This is important not just to our two biggest cities, but their regions and the state as well.

But in the arena that matters most to our long term success, the news is almost certainly going to be not so good. That arena is public policy.  The one prediction that I made last year that came true is in that arena. I wrote: “What appears to be the preeminent vision (in Lansing) of a successful future Michigan is an economy still anchored by factories, farms and tourism. And a policy agenda to get us back to our past success largely through smaller government and weaker unions. If I had to predict where we will go in 2011 it is towards that vision and agenda.”

Of course, unfortunately that is what occurred and is likely to occur again in 2012. I hope I’m wrong. An agenda – as I wrote in my last post – trying to restart a 1.0 and 2.0 economy will leave Michigan one of the poorest states in the country. Not good news to me. What about you?

My hope for 2012 is that we will get more of the kind leadership that the Senate Democratic caucus showed in their Michigan 2020 plan of putting out an alternative agenda(s) to the low tax/small government/weak union/lowest costs places win agenda that is the dominant thrust of public policy today in Lansing. It is almost certain that that agenda will rule the day in Lansing in 2012. Having an alternative agenda is an important step to reversing a policy course that is likely to leave Michigan with a shrinking, rather than growing, middle class.

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