Jennifer Granholm in A Governor`s Story, by Jennifer Granholm
On Budget & Economy:
Lower tax rates mean budget cuts, then more cuts
The spending cuts during my first four years in office were largely the inevitable consequence of the tax cuts pushed through by my predecessor,
John Engler, in the late 1990s. With the state flush with revenues, those cuts sounded reasonable at the time. Lower taxes of course meant more money available for private-sector spending and investment.
When the boom of the 1990s ended--as booms inevitably do--the impact of the tax cuts on state budgets suddenly hit home.
Without the cushion of an ever-growing economy, lower tax rates now meant less money for state services. And that meant budget cuts, cuts on top of cuts, and then still more cuts.
Source: A Governor's Story, by Jennifer Granholm, p.119-120
Oct 1, 2005
On Corporations:
Executive pay imbalance is improper from moral standpoint
Corporate executives think in terms of numbers. When it comes to compensation, they see a fraction: Their pay is on top, with corporate earnings on the bottom. The resulting value is very tiny, meaning that their income is not a big deal, they reason.
Workers think in numbers, too. But the traction the workers see is quite different. They see an executive's bonus on top and their pay on the bottom. THAT fraction is top-heavy--an "improper fraction," as we learned in math class.
Such imbalance was also improper from a moral standpoint.Alienate the workers through continual demands for one-sided concessions, and it's not just morals but also morale and productivity that deteriorate. Fairness at both ends of the pay
scale is not just a legitimate moral end but also an essential element of sound leadership. Morality and morale are deeply interwoven in credible leadership. If leaders destroy the former, they will eventually destroy the latter.
Source: A Governor's Story, by Jennifer Granholm, p. 80
Oct 1, 2005
On Corporations:
Tax cuts are minor compared to talent recruitment
The notion that tax cuts are the magic elixir of business growth ignores the realities of contemporary business. As one of our interns remarked, "The old tax-cuts-only mind-set is SO 20th century." In 21st-century knowledge-based economies, tax rates
play a minor role in business location decisions. For the kinds of advanced-manufacturing, high-tech business we were recruiting, TALENT is what matters. Quality of life, culture, and the "coolness" factor of host cities are also key to those decisions.
Companies need to recruit smart, ambitious innovators--people who want to live in cool cities with exciting things to do and great schools for their kids. And where do talented young employees and the cool cities that attract them come from? From public
investments in schools, the arts, universities, and training--the very things we've been cutting for years under the mantra "Government doesn't create jobs. Only the private sector creates jobs." It's a half-truth we've swallowed whole for much too long.
Source: A Governor's Story, by Jennifer Granholm, p.124
Oct 1, 2005
On Corporations:
We pick winners & losers to compete against other states
Governors and politicians who constantly proclaim that "government should not pick winners and losers" are doing precisely that, and for good reason: Virtually every state is locked in head-to-head battle with other states for business sitting decisions.
To survive such competition, state governments are forced to practice economic policy, whether they choose to admit it or not.- Indiana's tax code boasts 8 different credits, including those for industries like media and alternative fuels,
that the administration has chosen as "winners."
- The New Jersey Economic Development Authority favors specific "business sectors critical to the State's economy."
- In Ohio, 12 different tax incentives and credits are offered to businesses in
particular sectors from manufacturing to technology.
- In Texas, in addition to the usual targeted tax incentives, the governor has doled out over $250 million to emerging businesses in 5 specific industry clusters.
Source: A Governor's Story, by Jennifer Granholm, p.242
Oct 1, 2005
On Corporations:
Carmaker government-run bankruptcies saved GM & Chrysler
When, on May 24, 2011, Chrysler announced that it was repaying the loans years ahead of schedule, the same Mitt Romney who'd used the pages of the "New York Times" to declare "Let Detroit Go Bankrupt" boldly sought to claim credit for the auto industry's
turnaround. "Mitt Romney had the idea 1st," said Eric Fehrnstrom, a Romney spokesman. "You have to acknowledge that. He was advocating for a course of action that eventually the Obama administration adopted."This was doubly wrong.
In the first instance, without the governor's investment, which Romney condemned, there would have been no auto industry left to save. Second, it was the government's intervention and the high-speed bankruptcy orchestrated by the Treasury Department
that saved GM and Chrysler. A traditional bankruptcy without the US government's participation would likely have meant liquidation and the loss of the backbone of American manufacturing.
Source: A Governor's Story, by Jennifer Granholm, p.256
Oct 1, 2005
On Education:
2002: Invest in early education through college scholarships
I promised to focus on creating an educational system that offered excellence to all children. My education priorities would have a familiar ring even today:
First fix Michigan's looming budget problems; then invest in early childhood education; shrink class sizes; reform urban schools to meet new, higher standards; elevate the profession of teaching;
give every child access to a college prep curriculum; hold college tuition down; and provide scholarships for all achieving children.
Educational improvement was critical to holding and attracting good-paying jobs and restarting growth in our state.
Source: A Governor's Story, by Jennifer Granholm, p. 14
Oct 1, 2005
On Education:
Every child in Michigan takes a college-prep curriculum
In 2004 I'd appointed a bipartisan commission to design a road map for doubling the number of college graduates in Michigan. The commission published a detailed road map for reaching that goal. One of the most important of its 19 recommendations was
making sure that every child in Michigan took a college prep curriculum. This would be the 1st step toward a far-reaching shift in public and individual attitudes toward education, the kind of change we absolutely required to compete in the 21st century.
Source: A Governor's Story, by Jennifer Granholm, p. 56
Oct 1, 2005
On Energy & Oil:
Diversify into renewable and clean energy
Diversification of our economy meant building specific new sectors based on our existing competitive advantages. Our opportunity analysis and the advice of our experts helped us identify several promising prospects:
Clean energy: Michigan boasted both a strong tradition of manufacturing excellence and a favorable geography for the generation of renewable energy, thanks to our proximity to the enormous natural resources of the Great Lakes.
Advanced manufacturing in fields like robotics, nanotechnology, and materials science:
Michigan's track record in science, engineering, design, and manufacturing gave us a measurable advantage in all these growing fields.
Source: A Governor's Story, by Jennifer Granholm, p. 56-57
Oct 1, 2005
On Energy & Oil:
Irresistible tax credits for wind, solar, & biofuels
We passed a renewable portfolio standard (RPS), which required that the state acquire a modest 10% of its energy from renewable sources by 2015. The new standard ensured that solar, wind, and other providers would find a ready market for their offerings.
Under Pres. Obama, the federal Department of Energy also offered competitive grants for renewable energy manufacturing as part of the Recovery Act. I asked our legislature to create irresistible state tax credits for wind, solar, and biofuels, as well
as for advanced energy storage systems (such as the lithium-ion battery used in an electric car). Expanding our private-public partnerships, we created 13 Centers of Energy Excellence to help commercialize universities' breakthrough technologies in
clean energy.
A unique strength that only government can provide is the capacity to think systematically about the entire value chain and seek opportunities to strengthen each link in that chain through incentivizing "clusters" of related companies.
Source: A Governor's Story, by Jennifer Granholm, p.257
Oct 1, 2005
On Free Trade:
NAFTA is about whether we're going to make things in America
When Electrolux threatened to leave Greenville and move to Mexico, we devised a blockbuster stack of incentives for the company, starting with waiving its taxes for the next 20 years. The UAW offered over $30 million in wage, benefit, and hiring
concessions. The pile of incentives totaled more than $750 million over 20 years."It's a valiant effort," the spokesman said. "But we've got to cut costs, and we can pay $1.57 an hour in Juarez. There's nothing you can do to make up for that."
Greenville's Mayor proclaimed, "NAFTA is just killing the industrial strength of this country."
I said, "We are the fallout of these unenforced trade agreements. The average guy is left without a job, maybe without a pension, and as a final
insult he trains his foreign replacement before he hands in his ID badge. And there's nothing we can do about it. Nothing. This isn't about tax policy. It's not about regulations. It's about whether we are going to make things in America."
Source: A Governor's Story, by Jennifer Granholm, p. 48-51
Oct 1, 2005
On Free Trade:
Replace CAFTA outsourcing with "No Worker Left Behind"
In 2006, at UAW Local 699 in Saginaw. "We've seen our jobs leave on a fast track to Mexico, on a slow boat to China, and on the Internet to India!" I declared, fist pumping.
The hall erupted in loud applause. "NAFTA and CAFTA [Central America Free Trade Agreement] have given us the Shafta!"
I shouted, and the crowd of workers roared in response, as if ready to tear the heads off of those who had made a profit by outsourcing jobs. I waited for them to settle down and for my own angry heart to slow.
"You've heard of 'No Child Left Behind'?" I asked. "Well, how about No WORKER Left Behind?!"
Source: A Governor's Story, by Jennifer Granholm, p. 96-97
Oct 1, 2005
On Free Trade:
Encourage insourcing, instead of victims of globalization
Michiganders had long feared globalization. The reasons were understandable: Our economy had consistently been eroded by manufacturers leaving for cheaper countries. I believe we must fight every unfair tilting of the playing field. But I have also tried
to lead INTO these fierce global winds. Instead of being victims of globalization, we need to embrace it and take advantage of it, not by promoting outsourcing but by encouraging INSOURCING.In my terms as governor, I made 12 international trips to
recruit businesses: our state attracted 48 companies and $2 billion in investment, with more than 20,000 jobs generated. It was surprisingly easy to get midsized companies in other countries to invest in Michigan. These companies were interested in the
American market, but many lacked the multinational global staff to help guide them through the process. Because of their smaller size, relationships were important. My message to them: Let Michigan be your gateway to the US--we'll help you.
Source: A Governor's Story, by Jennifer Granholm, p.262
Oct 1, 2005
On Health Care:
$50M bailout of Detroit Medical Center during recession
The Detroit Medical Center was the biggest healthcare system in the state. It consisted of nine "safety net" hospitals serving many of our poorest and most vulnerable citizens. It was no secret that the DMC's budget relied on Medicare reimbursements that
failed to cover costs, meaning that the DMC provided enormous amounts of absolutely vital but uncompensated care."How much do they need to survive?" I asked. $50 million, was the answer.
Republican legislators, mostly from the suburbs, peddled
Detroit-bashing racial and ethnic stereotypes: Why, they asked, should the "good citizens" of Michigan bail out "THEIR hospital system"--an inner-city network that served mainly minority-group members?
I knew it would be political and financial idiocy
to bail out the DMC without insisting on significant reforms. The DMC board did as it promised. And in 2004, the first year after the government bailout and restructuring, DMC reported a multi-million dollar surplus.
Source: A Governor's Story, by Jennifer Granholm, p. 26-35
Oct 1, 2005
On Jobs:
Jobs Race to the Top: compete for regional job creation
Obama's educational Race to the Top was the most dramatically successful component of the Recovery Act. Using a modest amount of money, $4.5 billion, it stoked unprecedented competition among states to develop creative ideas for education reform.
I urged that we borrow the Race to the Top concept to fuel regional job creation. The goal: To create 3 million jobs in 3 years. Here's how it could work:- Fund the program by repurposing a percentage of the money the US currently spends on
economic development. To have real impact, the Jobs Race to the Top should be comparable in size and scope to its educational counterpart.
- Launch with a competition focused on a critical national need with job-creating potential--for example, clean
energy technology.
- Incentivize and reward the most effective locally formed public-private partnerships, involving businesses, universities, and foundations. Define "effectiveness" in terms of numbers of lasting jobs created quickly.
Source: A Governor's Story, by Jennifer Granholm, p. 243
Oct 1, 2005
On Principles & Values:
Born in Canada; raised in California; elected in Michigan
Most of my supporters knew it was a fluke that I'd been elected governor at all. I wasn't even from Michigan. I'd been born in Canada and raised since the age of 4 in California's San Francisco Bay area, far from the factories and farms of the Midwest.
My dad, Victor Ivar Granholm, is a gentleman and a Republican, a stoic Swede who never raises his voice. My mom, Shirley Dowden Granholm, is a pragmatic, earthy Newfoundlander.
When I was little, my mom gave me 3 specific pieces of advice: "Don't talk about yourself--nobody wants to hear it--don't ask strangers for money, and don't wear your dress-up clothes every day."
With that guidance, I have no idea how I ended up running for office.
Source: A Governor's Story, by Jennifer Granholm, p. 5-6
Oct 1, 2005
On Principles & Values:
Elected Attorney General on slogan, "I'll take your case!"
I worked as a successful federal prosecutor and then, beginning in 1994, as Wayne County corporation counsel, where I led the law department of Michigan's largest county. But in 1998, when Michigan Attorney General shocked political followers by
announcing his retirement after 37 years on the job, a former Democratic Party chair began prodding me to "go for it."So I leaped. Seven other candidates, all men, and none with my prosecutorial and civil law experience, vied for the spot.
I built my campaign around a promise to fight for everyday people. "I'll take your case!" I told ripped-off consumers. "I'll take your case!" I told environmentalists eager to protect the waters of the Great Lakes. "I'll take your case!"
I told parents who wanted to guard their children against online predators, and seniors who needed protection from financial con artists. I won the Democratic nomination and subsequently became Michigan's attorney general.
Source: A Governor's Story, by Jennifer Granholm, p. 10-11
Oct 1, 2005
On Tax Reform:
2003: GOP tax policy based on unimaginably rosy assumptions
Michigan had been driven by the auto industry. When the country flourished, more people bought cars and spurred our automakers to full capacity. The rest of the economy benefitted.Then the inevitable downturn would come.
The boom-or-bust cycles were exasperating, but Michigan was unfailingly resilient.
The latest economic downturn had a new twist. Republicans who controlled things around here for a decade effectively built a new state tax structure--
and built it when economic conditions were at their peak and with economic assumptions that were unimaginably rosy.
On top of the rosy assumptions, they also adopted more tax cuts that
will roll in automatically over the next few years, with no offsetting revenue increases to pay for them. The business tax rate is scheduled to drop each year until business taxes go away altogether.
Source: A Governor's Story, by Jennifer Granholm, p. 20-21
Oct 1, 2005
On Tax Reform:
Lower taxes DID create jobs, but not necessarily in America
For a decade, Michigan's leaders, Democrats and Republicans alike, had steered by the belief that lower taxes would invariably increase investment, growth, and jobs and eventually generate more tax revenue. Unfortunately, we were learning that this
belief SIMPLY WASN'T TRUE. Even as Michigan had greatly reduced its tax burden relative to other states, its economy fell further and further behind.To be clear, the cuts DID create many jobs--but not necessarily in America.
Michigan's tax cuts, and those championed by Pres. George Bush at the national level, freed up capital for investors and companies. But much of that capital was being investigated far from Michigan and away from our country altogether.
The corporate
and personal income tax burden in Michigan during 1999-2009 fell more than in any other state in the country--from 12th highest to 39th in the case of state and local taxes--yet people and businesses were still exiting our increasingly inexpensive state.
Source: A Governor's Story, by Jennifer Granholm, p.122-123
Oct 1, 2005
On Technology:
We have failed to invest in our physical infrastructure
[In summer 2003 we experienced a 2-day blackout]. As circuit breakers tripped at generating stations from NY to Michigan and into Canada, millions of people were affected. "What's the lesson here?" I asked the chair of Michigan's Public Service
Commission, the body that regulated utilities and electricity lines. "It's pretty simple, actually," the chair told me. "We've failed to invest in the power grid. Now the facilities are old, deregulation has removed responsibility for investment, and
the infrastructure has become enormously fragile."
The blackout was symptomatic of deeper, systemic stresses. It involved the failure to maintain and invest intelligently in our human and physical infrastructure. For decades, we'd preferred to pretend
that the systems we relied upon to make life worthwhile could be wholly self-correcting and self-supporting. Now those decades of neglect were taking their toll--first in small, chronic failures, then in massive, catastrophic breakdowns.
Source: A Governor's Story, by Jennifer Granholm, p. 40
Oct 1, 2005
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