Michigan needs productive 'midlife crisis'

“Today, the country is middle-aged but self-indulgent. Bad habits have accumulated.  Interest groups have emerged to protect the status quo. The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis” -- David Brooks, New York Times columnist.

For the past three years, the New Year has arrived both “gloomy and doomy.” But this time around, things feel different -- and better.

Of course, it never hurts to have the automobile industry, Michigan's iconic endeavor, on the upswing.  University of Michigan economists say we’ll gain around 70,000 jobs over the next couple of years -- and our unemployment rate has finally dropped below 10 percent.

And Gov. Rick Snyder and the Legislature have together accomplished a great deal, sweeping away a tax system, regulatory structure and work force designed for a brawn-based manufacturing economy that began falling apart years and years ago.

The new Michigan corporate income tax has reduced the overall burden on businesses. The state’s budget, encouragingly passed months ahead of the deadline, is balanced and largely free of accounting gimmicks.

Better yet, a two-year budgeting plan is designed to smooth out swings in the business cycle, while the progress both state and local governments are making will be charted by a series of “dashboard reports."

Barriers to local government service-sharing economies have been lowered. The revamped Emergency Manager law, although unpopular in places such as Detroit, has helped Benton Harbor turn the corner – and offers a chance for other distressed local governments to make the kinds of structural changes required to get back on a sound financial basis.

When it comes to education, while there have been unpopular spending cuts, the theme has been “reform.” A new teacher tenure law makes it easier to get rid of poor teachers, for example. The hope is that the lawmakers’ decision to essentially remove all caps on charter schools by 2015 will provide parents and students trapped in bad school districts with a way to get the education kids so desperately need.

Nobody can deny that the last year has been busy. And, overall, I’d say that the steps taken have been necessary ones for Michigan’s transformation. Necessary, yes; but certainly not sufficient.

The job is by no means done. The reason why arises from what any business must do to succeed: First, develop a competitive strategy that identifies the company’s durable, distinctive competitive assets. Second, launch a sustained investment program in those assets, whatever they may be. Third, communicate -- and sell -- the plan for competitive success to the entire company. Fourth, plan the work -- and work the plan.

That’s a recipe for business success. Sounds simple, doesn’t it. From my own experience (I started my company and ran it for 40 years) I know it sure isn’t easy. But it’s fundamentally important.

And it’s an approach that should come naturally to a seasoned business leader like the governor. But doing it for an entire state takes, even in ideal conditions, a long time to develop -- and an even longer time to bear fruit.

Which means Michigan’s main agenda for 2012 should be to start putting the pieces together for a focused strategy to compete. Not just here at home, but around the globe.

One key piece of this: Identifying Michigan’s own “distinctive, durable and competitive assets.” Beginning in 2009, the Center for Michigan undertook a “Michigan’s Defining Moment” public engagement campaign that eventually involved more than 10,000 citizens in nearly 600 community conversations. The topic: What kind of future our citizens wanted for our state and how to best reach that future? Those discussions were valuable in identifying some core assets that should be at the core of a Michigan competitive strategy:

Intellectual capital: Whether it’s the education our kids get in school,  the quality of our universities or the high-tech spin-offs from laboratories, our stock of brain-based assets represents an essential part of any competitive strategy. 

Natural resources: Thanks to the Great Lakes, we live at the center of 20 percent of all the drinkable fresh water on the planet.  Our woods and lakes and streams are the wonders of the world, irreplaceable and, taken together, unique.

Quality of life: Michigan is an absolutely wonderful place to live and raise a family.  I suppose you could find an equally fine lifestyle somewhere else, but it’s likely to cost much more. And the quality of life in our communities ought to be a key draw for ambitious, smart immigrants from around the world.

That’s my list of just three possible “public goods,” distinctive, durable assets that Michigan needs to succeed in competition.

However, the particular items on any list aren’t most important.  What really matters is that this year starts a process of discussion that will lead to a competitive success plan forMichigan. That’s what we should be talking about to frame the issues before the statewide elections of 2014.

These things take time, especially if citizens are to be involved in an important way.  But, as David Brooks says, we need a productive midlife crisis. And now is the time to start. And, by the way, Happy New Year!

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and president of the Center for Michigan, a nonprofit, bipartisan centrist think-and-do tank, designed to cure Michigan’s dysfunctional political culture. He is also on the board of the Center’s Business Leaders for Early Education. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments at ppower@thecenterformichigan.net.