This should be Michigan’s time. The target of Obama manufacturing policy (and six years of similar Granholm stimulus before it) including the auto bailout, tens of millions in federal green investment, and millions more in stimulus infrastructure spending, Michigan should be leading this economic recovery with a roar. With their soaring sales numbers, the Big Three are evidence that Obama is transforming America, yes?
Michigan was shocked again this week with its fourth straight month of rising unemployment. At 9.4 percent, Michigan is going backwards in this recovery with unemployment higher in August than January’s 9 percent. What happened?
Obamanomics happened. Michigan economists agree that – despite the much-ballyhooed, targeted favors of the White House, the larger Michigan economy is suffering from the same malaise as the other 49 states: Washington overregulation and policy uncertainty.
“One month of rising unemployment is an anomaly, four months is a trend,” says Mackinac Center economist James Hohman who looked at today’s bleak numbers that showed manufacturing, construction, retail trade, and government job numbers all down. “These numbers should be of concern to policymakers.”
Hohman confirms the auto industry’s health is a bright spot – together with Governor Snyder’s firm fiscal reforms . But he also notes that Obama is stuck in the past – today autos make up just 3.57 percent of Michigan manufacturing jobs, less, in fact, than Indiana. What Obama should be doing is not trying to dictate the future from Washington – but unleashing markets to show the way.
Unlike the coal industry or the medical devices industry - both of which are being hammered by Obama’s global warming and Obamacare policies – neither Hohman nor economist Pat Anderson, CEO of Anderson Economic Group in Lansing, can point to one sector of Michigan’s economy that illustrates its ills.
Instead, they both point to a cocktail of Washington-driven problems that have made it expensive for ALL businesses to hire new workers.
Anderson cites the toll taken by Obamacare’s unknown costs, the taxes imposed for the state’s extended unemployment benefits (the so-called solvency tax), and banking regulations that have held back capital from business expansion.
“Across all industries the #1 reason for persistent unemployment is Washington has created huge uncertainty about hiring new workers,” says Anderson. He adds that Michigan businessmen scoff at the media’s – and the Federal Reserve’s – obsession with lowering interest rates as some kind of silver bullet.
“Business people just shrug and laugh at the low rates because the federal Treasury Department is punishing banks for making new investments,” he says. “Small business cannot borrow money from banks.”
This conforms with what MIView has heard from businessmen since 2009 - that Obama’s anti-business policies have buried job creators in added costs while discouraging new cash investment. America grows when markets pick the winners, not government.
Washington’s pet state of Michigan is the best evidence of that.