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Posted on Thu, Dec 16, 2010 : 5:55 a.m.

Fairly or unfairly, Gov.-elect Snyder will be judged on business growth, unemployment

By Rick Haglund

Nearly eight years ago David Hollister, the state’s new labor and economic development director, said his first assignment from incoming Gov. Jennifer Granholm was to lower the unemployment rate.

Oh, if it were only so simple that a state official, even one as talented as Hollister, could ease joblessness.

(In his previous job as Lansing mayor, Hollister organized a community-wide strategy that kept General Motors Co. from leaving town.)

But we all know what happened. The auto industry skidded into a ditch about the time Granholm was sworn in as governor, and unemployment soared.

In a statement eerily reminiscent of Granholm’s instruction to Hollister, Governor-elect Rick Snyder said he doesn’t accept forecasts by experts who say Michigan’s economy will struggle with chronic joblessness for years.

Speaking recently at Wayne State University, Snyder said he was given a folder at a seminar for new governors that projected Michigan will be one of the worst states for job growth over the next five years.

“This is a piece of fiction — this is not what's going to happen," he said, according to the Associated Press. "We are going to beat the living daylights of out it."

We should all hope he pummels those projections. Michigan’s jobless rate is expected to remain in double digits for at least the next two years, according to economists at the University of Michigan, Snyder’s alma mater.

But all new governors come into office promising a break with the past and a better future. In Michigan, that tends to be a requirement for the job.

Every governor since William Milliken in the early 1980s has left his or her successor with serious budget and economic problems.

Snyder has even more reason to express optimism as he tries to lift a citizenry that has suffered though the worst decade since the Great Depression.

We want — make that need — to know better days are ahead. Michigan can’t afford another lost decade of joblessness and despair.

Snyder’s election is seen as a hopeful sign by business owners and executives who create jobs. That’s an important first step.

In a new survey, 75 percent of 300 metro Detroit business owners, operators and managers said they think Snyder’s election is an economic positive for the state. The survey was conducted for Crain’s Detroit Business by EPIC-MRA in Lansing.

Fifty-nine percent of those surveyed said they expect their own business prospects to improve next year, while just 6 percent said they expect worse results.

The findings may not be especially surprising considering those responding to the survey likely think of Snyder, a technology entrepreneur and venture capitalist, as one of their own.

But his role in boosting the state’s economy is limited. He can create a better business climate, but Snyder can’t fix many other macroeconomic problems holding back job growth, including high consumer debt levels and a troubled housing market.

And he might be setting himself up for unrealistic expectations in his oft-repeated pledge to “reinvent” Michigan.

Unless he produces fast results, Snyder could be judged harshly by an electorate desperate for more jobs.

Just ask David Hollister.

E-mail Rick Haglund at haglund.rick@gmail.com.

Comments

bugjuice

Thu, Dec 16, 2010 : 10:27 a.m.

Fairly or unfairly, Jennifer Granholm will be judged on an economy that was beyond her, the state of Michigan and the nations control. Let's see if the Nerd takes the credit or the blame.

Veracity

Thu, Dec 16, 2010 : 9:04 a.m.

Rick Snyder campaigned on the jobs issue, placing blame on Granholm and the unions. Obama is held responsible for the sustained national unemployment rate after being in office less than two years. Michigan voters expect Rick Snyder to keep his promises and should be justifiably disappointed if the new governor fails to increase employment significantly. Of course Rick Snyder has offered no feasible solution to the jobs issue. His proposal that reducing taxes will increase job opportunity has not worked in the past and for a good reason. Reducing taxes will increase profits retained by businesses. However, no business executive will hire unless the expectation is that the products created by the new employee will be sold and bring in enough revenue to at least cover the employee's cost to the company. If market demand does not absorb a company's production then inventories build up and will diminish the company's profitability. Demand dictates supply and not the other way around. If Rick Snyder is truly dedicated to employing the more than 640,000 jobless citizens of Michigan then he should lobby the federal government to fund major infrastructure projects like repairing roads and bridges, replacing water and sewer systems, brownfield projects and establishing a natural gas transmission network to encourage expansion of CNG powered vehicle usage. Thirty billion dollars a year may be required to support $50,000 a year jobs but 20% will be returned via taxes. And the multiplier effect will create $48 billion for Michigan's economy. So far, Rick Snyder's plan for saving Michigan's economy by encouraging new entrepreneurial jobs will be insufficient in size and will not hire many of the presently unemployed due to lack of required skills and education. Rick Snyder is intelligent and innovative. Let's hope that he is also realistic and flexible enough to dispose of plans that will not work and replace them with programs that will work. He must invest in education also so that the present jobless can acquire the knowledge and skills required by existing and future employment opportunities.