Star Parker

Michigan is a troubled state these days. As the U.S. economy booms, the Michigan economy sputters. Unemployment standing at 7.1 percent is almost double the national rate.

The state economy is the main thing on the minds of Michigan's voters. How they size up the way the two candidates for governor _ incumbent Gov. Jennifer Granholm and Republican challenger Dick DeVos _ will handle these economic problems will drive the outcome of the election next month.

Of course, when we're talking about the economy of Michigan, we're talking about the automobile indU.S.try. And herein lies the problem. GM and Ford are hemorrhaging and hence major job losses are occurring in the state.

What to do?

Granholm's answer is her own brand of central and indU.S.trial planning. She has cooked up a program of hundreds of millions of dollars in tax breaks and subsidies for corporations, designed to act as a tourniquet to stem the bleeding.

But this approach has never worked and won't work now. Distributing goodies, paid for by taxpayers (where else would the money come from?), may work well in the short term for the benefit of the politician making the handout.

However, the extent to which underlying economic realities and challenges are not addressed at their roots, and are obscured by government administered anesthesia, the problems not only don't get solved, but become worse.

Think about it this way.

After Eisenhower was elected president, he nominated the then CEO of General Motors, Charles Wilson, to be his Secretary of Defense.

Wilson gained notoriety at his confirmation hearings becaU.S.e he initially resisted divesting his GM stock. When he was asked if he thought there might be a conflict of interest, Wilson replied with the famoU.S. quote (although not exactly how he said it), "What's good for General Motors is good for the country."

Back then, Wilson's observation was not unreasonable. GM was a pillar and defining barometer of the U.S. economy.

In 1955, the first year that the Fortune 500 list was published, GM was number one, the largest and most profitable corporation in the United States. It had more than 50 percent market share of the U.S. automobile market.

The vitality of General Motors and the vitality of the U.S. economy were mirror images of each other.

However, today the link between GM and the national economy is tenuoU.S. to the point of not existing.


Star Parker

Star Parker is founder and president of CURE, the Center for Urban Renewal and Education, a 501c3 think tank which explores and promotes market based public policy to fight poverty, as well as author of the newly revised Uncle Sam's Plantation: How Big Government Enslaves America's Poor and What We Can do About It.