Lansing bureaucrats need to go slow (really slow) on a takeover of state universities

I have, for a long time, been a fan of encouraging local units of government to share services, or even consolidate with each other, where that makes sense. I have argued, for example, that the metro Detroit region ought to share police.

But even for a let’s-all-work-together guy like me, a proposal to put all of Michigan’s state-supported universities under the control of a single governing board is nerve-racking. The idea – and really, that’s all it is at this point – is moving slowly though the state Legislature. I think that’s the right pace. Any attempt to fast-track a Lansing takeover should be discouraged because, in this case, doing the wrong thing could be far worse than doing nothing.

While Michigan’s university system is probably more expensive than it needs to be, it is far from broken. It is, in fact, something our state should be very proud of – and the best asset we have if we are serious about creating a diversified, knowledge-based economy. Not only do they train people for jobs that actually exist, our universities are important research factories that keep Michigan in the game in terms of creating and commercializing new technology.

The University of Michigan, for example, was responsible for $1.14 billion in research in 2010. An astounding $751 million was funded by federal grants and another $39 million was funded by industry.  In 2010 alone, that resulted in 10 start-ups launched; $39.8 million in royalties and equity sales; 290 new invention disclosures; 153 U.S. patent applications; and 97 new license agreements. The university also boasts some of the top scholars in the country and turns out thousands of in-demand graduates.

Likewise, Michigan State University and Wayne State University (my alma mater) produce incredibly valuable research, while also doing a good job educating students at all levels. MSU is best known for its agricultural breakthroughs, but also makes important strides in things like chemistry and computer science. Among other things, WSU has a medical school that has trained nearly 40 percent of all practicing physicians in southeast Michigan and is making its own mark in life-saving research.

I could say similarly good things about the rest of Michigan’s 15 taxpayer-funded universities. In each case, these are institutions that serve the state well and provide good educations.

On the other hand, it is a bit odd that Michigan is the only state that gives its universities the level of autonomy that ours enjoy. To the extent that independence helps produce great institutions of learning, it should be preserved. But where it leads to costly duplication and a “silo” mentality in higher education, it does no good for anyone.

It’s for that reason that I was encouraged when U-M, MSU and WSU formed the University Research Corridor alliance a few years ago. The alliance’s goal, according to its website, is “to transform, strengthen and diversify the state’s economy.” Toward that end, the URC has tried to coordinate efforts to make the universities more relevant to the economy outside the rarified world of academia. Recently, URC formed a statewide university-business engagement network aimed at connecting businesses with university resources.

If Lansing can find ways to encourage more coordination between universities and break down the barriers between academic research and commercialization, I am all for it. But putting our universities under an all-powerful statewide board is a ham-fisted idea that has fiasco written all over it.

Does anybody really think our remarkably dysfunctional, partisanship-obsessed, back-biting state Legislature could quickly devise a way to deliver better higher education in Michigan? Is it obvious to anyone else that a state-appointed overseeing board could be politicized, play favorites or find other ways to screw things up?

Any plan for revising our state university system needs to be considered carefully. Any commission appointed for the purpose of creating such a plan needs to be transparent and non-political, and needs to include input from the universities themselves, their students, alumni and Michigan communities. Only such a process – which would be painfully slow and tedious – could create an outcome likely to improve our already-good university system.

If done well, an effort to achieve better coordination between universities, find economies of scale and cross-pollinate good ideas could help better enable the state to deliver higher education that students can actually afford. Done poorly, it could lead to an exodus of our best scholars and diminish the reputation of the whole system.

If we are to avoid creating a debacle, we need to move slowly and carefully in doing something as important as this.

Jamie Dimon should relax; nobody wants to take his stuff away

Jamie Dimon wants you to know that he’s not a bad guy and wishes people would stop picking on him and people like him.

Speaking at an investors’ conference in New York recently, Dimon, CEO of JPMorgan Chase & Co., said: “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it. Sometimes there’s a bad apple, yet we denigrate the whole.”

You’re right, Mr. Dimon, you don’t understand it. If you really think the rise of Occupy Wall Street and the rest of the “99 percent movement” is about demonizing individuals or denigrating the notion of success, then you really are missing the point.

The angst we see in the country today isn’t so much about “hatin’ the playas,” it’s about “hatin’ the game.” By “game,” I don’t mean capitalism, but the way capitalism has been used in recent years to further enrich people who were already wealthy, while the incomes of those in the middle class have stagnated or declined in real (after-inflation) terms. We see that not only in the Occupy movement, but in the Tea Party as well.

One does not have to be a Maoist, a follower of North Korea’s Kim Jong Un or some other kind or extreme egalitarian to be concerned about the rapidly growing income and wealth inequality in the United States. For a lot of people, there is a sense that the 2008 banking crisis was just a symptom of a bigger disease – some kind of cancer eating away at the ability of folks like them to get ahead and feel confident about their financial futures. They don’t want to seize the riches of the top 1 percent. They just want to be able to earn enough at work to provide a little comfort and security for their families – and maybe buy a new car every few years or take a trip to Disney World.

These kinds of modest aspirations get harder to achieve when wealth and income become more concentrated. That is because, despite everything that has been said about the rich being the job-creating class, a broader distribution of national income is better for an economy like ours.

In terms of generating current economic growth in the U.S., it’s better for 86 families to make about $70,000 per year each than it is for one family to take home the entire $6 million by themselves. Why’s that? Those 86 families are likely to buy 86 separate homes, at least 172 televisions, and probably 120 or more vehicles. Chances are good that all $6 million – and then some – will be spent every year.

Meanwhile, the family earning $6 million is likely to buy no more than a couple homes – the main house and maybe a vacation place – and a handful of nice cars. Most of their $6 million probably will be saved and invested. That can be a good thing in its own way. But, 70 percent of the U.S. economic activity is consumer spending and that one family simply cannot generate the same demand for goods and services as those 86 families making $70,000 each.

Does that mean nobody should bring home $6 million a year or that large incomes should be confiscated or redistributed? Of course it doesn’t.

In a lot of cases, that $6 million income actually will come from job-creating activity, like running a business. It’s also pretty clear to me that societies are better off in the long run if they can dangle the incentive of getting rich in front of its more ambitious, creative citizens. The reward of luxurious living can be a powerful incentive to work hard and take risks.

However, the thing about incentives is that, at some point, they become counter-productive. Consider JPMorgan’s Dimon. I am sure he works long hours and cares a lot about what he does. Suppose his board paid him $15 million instead of $23 million back in 2010, or his income taxes were increased by a few percentage points. Would he decide to quit banking and spend his time playing World of Warcraft full time? I doubt it.

At a macro level, the top 1 percent of Americans now controls 40 percent of our wealth. A decade ago, it was about 33 percent. For the 1 percent of the population with the highest incomes, average real after-tax household income grew by 275 percent between 1979 and 2007. In terms of distribution of family income, the U.S. is now in roughly the same league as Cameroon and Iran.

At levels of wealth distribution seen in 2001, the richest Americans had a level of affluence that would have been undreamed of by the pharaohs of ancient Egypt. If we could dial back to that level  through some a combination of political decisions – new regulations on business, tighter trade policies, looser restrictions on union organizing, slightly higher taxes, etc. – would that destroy the incentive to be rich? Would industrialists fulfill the fantasy of writer Ayn Rand and go on strike? If they did, would they prove to be irreplaceable?

Those are the kinds of questions I have been asking myself lately. That so many of our leaders aren’t asking them has me worried.

I don’t know at what level wealth and income inequality leads to serious social instability. There is no exact “tipping point” at which people become more likely to pour into the streets to burn things down, or become susceptible to the appeals of nutty demagogues who offer up radical and destructive “solutions” to a desperate populace. But we’re now a closer to that point than I am comfortable with.

If we are going to stay away from the brink of real insanity, our policymakers are going to have to drop partisanship and ideological bantering and get down to a real, sober assessment of what it will take to maintain a large, healthy middle class in this country.

It also would help if the Jamie Dimons of the world stopped trying to make us feel sorry for them.

Let’s not be a gay-bashing state, OK?

The unemployment rate in Michigan is 10.6 percent. So, can anybody explain to me why some Michigan politicians think attacking the gay community should be a priority?

As Michigan works to claw itself out of the hole it fell into during the greatest recession since the Great Depression, some of our state and local officeholders want to send the world a message. That message is that Michigan is open for business, we want your investment dollars and your 21^st century jobs and, oh yes … one more thing: We’re pretty darned intolerant when it comes to gay people.

Late last week, state legislators sent Gov. Rick Snyder a bill that would ban domestic partner benefits for unmarried public employees in the state. The bill would affect the live-in partners of all unmarried employees, straight or gay. But the main targets are homosexual couples who are not only unmarried, but unlikely to get married any time soon, thanks to a constitutional amendment approved by Michigan voters in 2004.

Snyder – who is smart enough to know what kind of message this kind of legislation sends to the world – is expected to sign the bill anyway, after a review period.

University of Michigan President Mary Sue Coleman has said she fully expects the university to lose employees over this if the bill is deemed to apply to state universities. In a statement Coleman issued prior to the bill’s passage, she wrote “employees currently responsible for providing health coverage for their families may well leave, and other top candidates will choose not to come.”

This action is bad enough on its own. But the measure was not passed in a vacuum. It is happening within the context of a nonsensical culture war we really don’t need to have.

Last month, our Lansing lawmakers embarrassed themselves by trying to insert language in a school anti-bullying bill intended to carve out an exception for bullying motivated by “sincerely held religious belief or moral conviction.” Critics rightly called that provision “a license to bully” for those who might want to express disapproval of homosexuality by tormenting others. In the end, the legislation, dubbed Matt’s Safe School Law, was passed and signed without the “moral conviction” language. That the clause was even debated, however, was mortifying.

More recently, it was revealed that newly elected Troy Mayor Janice Daniels had posted anti-gay slurs on her Facebook page prior to being elected. When the posts were discovered, Daniels sort ofapologized, but in a way that also defended her comments. The whole affair earned Daniels a “Worst Person in the World” awardon “Countdown with Keith Olbermann,” which airs on Current TV. (The only silver lining here is that hardly anybody watches Current TV.)

I have to ask: Is this how we want our representatives to spend their time? When outsiders think about Michigan, do we really want them to think “gay bashing” instead of “lakes, cars and good universities?”

OK, I get it. Some of you do not “approve of” homosexuality. Maybe you have religious objections, or perhaps, the whole thing just strikes you as “icky.” That gives you the perfect right to refrain from gay sex and shun homosexuals if you choose. That does not, however, give you the right to dictate those choices to other people – through legislation, intimidation or any other means. Even if you had that right, it would not be in your interest to exercise it.

Michigan needs to attract the best talent – the most creative, smartest people out there. I am not suggesting that most of those people are gay. But a lot of educated people care a great deal about the culture that surrounds them. Tolerance matters to them. If Michigan is seen as a narrow-minded, bigoted place that goes out of its way to pick on the gay community, the state will be less likely to attract those “creative class” people and companies it needs to strive.

Here is another thing: When people decide to use the power of government to take “moral stands” against homosexuality, what exactly do they hope to accomplish? Do they believe driving gays into the closet will make society better? Do they think homosexuality can be done away with if we apply enough disapproval and persecution to gay people? Not. Gonna. Happen.

As long as there have been humans walking the planet, there have been some people attracted to members of the same sex. This leads me to believe that homosexuality is as normal to the human condition as variations in skin and eye color, or the urge to bet on football. It also is evident that knowing a person’s sexual orientation, by itself, tells me nothing about his or her character. It is a trait, not a failing.

But, but, but … if we offer things like employee benefits to the partners of gay employees, isn’t that an attack on the traditional family structure? Doesn’t that diminish the whole institution of traditional marriage? Shouldn’t we all stand up for old-fashioned family values?

I am a big fan of traditional marriage. I have been part of one for more than 18 years. For the life of me, though, I don’t understand how the legal status of the gay couple up the street has a negative impact on my family. Nor do I see how denying health insurance to the loved ones of certain people helps me in any way. If anything, it hurts me if it means somebody is more likely to depend on charity care when he or she goes to the hospital.

So, if the goal of denying family health insurance to gay couples is to protect the sanctity of my home, don’t bother. We’ll be fine.

Speaking of intolerance…

I have been watching with amusement efforts by the home-improvement chain Lowe’s to retreat from its decision to pull ads from the TLC network’s TV show “All American Muslim,” filmed in Dearborn.

Lowe’s pulled the ads largely because of pressure from the Florida Family Association (FFA), which objects to the show entirely because it does not confirm FFA’s pre-conceived ideas. The subjects of the show, FFA says, are just too normal. Not one member of the families highlighted spends time participating in a worldwide jihad or planning for the establishment of a global caliphate. That, according to FFA, distorts the truth.

Here’s the thing, FFA: You could not be more wrong. If the Muslim families featured on “All American Muslim” seem like normal, middle-class suburban people just trying to get by, it’s because that is what they are. The kind of assimilated, normal, classic American-with-a-twist existence depicted on “All American Muslim” is far more representative of Muslim life in Dearborn than anything you folks in Florida could dream up in your fevered, Islamophobic imaginations.

Instead of organizing advertisers to boycott “All American Muslim,” perhaps the leaders of the FFA and their flock should watch the show and see what they can learn from it. Better yet, maybe they should visit Dearborn for themselves. The restaurants alone would make the trip worthwhile.

Detroit’s budget: Not something Batman can fix

As the financial crisis of the City of Detroit has played itself, a lot has been written about the city’s “corrupt city government.” Casual observers might be left with the impression that theft and mismanagement are the roots of Detroit’s budgetary problems. I wish it was that simple, but it isn’t.

If “rampant corruption” was the primary problem, then I could believe that the solution would be to simply turn on the Bat Signal. We could call in the Caped Crusader (or a financial manager) and locate hundreds of millions of dollars – hidden under rocks, inside mattresses or deposited in Swiss bank accounts – that could be used to balance the budget. But that’s not going to happen.

To be sure, Detroit’s politicians have not helped the situation. There is reason to believe that the feds, which have been handing down corruption indictments for about a year now, are not finished yet. And one could cite decades of bone-headed decisions made by Detroit mayors and city councils that have contributed to today’s budget mess. Despite all of that, Detroit’s biggest problem isn’t corruption, or even incompetence.

What makes the city’s problems so hard is the harsh reality of operating a government – any government – in these times, especially in Michigan. Along with all other municipal and state governments, Detroit is feeling the impact of a recession that was deeper than anyone realized at the time and a recovery that is taking longer than rebounds from regular recessions take. Those factors overwhelm anything former Mayor Kwame Kilpatrick could have done to it.

For an example, let’s look at Detroit’s pension funds. A lot has been written lately about Detroit’s “unsustainable” legacy costs. The problem would be easily solvable if the shortfalls in pension and benefit funding could be attributed to greedy public officials stuffing their pockets with cash. The real story, however, is far more complicated and in no way limited to Detroit.

According to a recent Census Bureau report on the health of public sector pension funds nationwide, the total cash and investment holdings of funds surveyed decreased by a staggering 22.7 percent in fiscal 2009 (which in most cases ended June 30 of that year), thanks largely to the collapse of stock prices on Wall Street. That happened at a time when a sharp decrease in tax collections made it impossible for state and local governments to make up the difference from their own coffers.

For the fiscal year ended June 30, 2010, the Detroit Police and Fire Retirement System reported an investment return of about 7.4 percent. That’s not bad. But, it does not make up for the roughly 21.5 percent in losses it suffered the year before, when Wall Street went ka-boom. The Detroit General Retirement System earned a 6 percent return for the year ended June 30, 2010, but reported an eye-popping 31 percent investment loss a year before.

Public sector pension funds have been playing catch-up since reaching their peak asset values in 2007. Nobody in the pension fund world plans for the kind of market volatility seen in recent years.

Most state and local pension funds – taking the advice of highly paid consultants with impressive MBAs and nice suits – make plans (and promises) based on an average investment return of about 8 percent a year. However, from 2000 to 2009, the investment return for the average state-level fund averaged less than 4 percent per year, according to The Pew Center on the States.

For years, the consultants told pension funds that it was prudent to invest about 60 percent of their assets in the stock market. The consultants also advised the funds to invest part of their bond portfolios in mortgage-backed securities that turned out to be filled with toxic assets. Anybody who has been watching the performance of his or her 401(k) investments over the past decade knows how that kind of advice has worked out.

Of course, there is plenty of evidence that the Detroit pension funds could be better run. The losses in the funds’ “alternative investments” portfolio, for example, have been scandalous. But even under better management, those funds were unlikely to have sidestepped the financial tsunami of 2008.

It’s undeniable that, even if Kilpatrick had never spent liberally with his city credit card, or (as has been alleged, but not yet proved) steered city contracts to his friends, Detroit would have been unable to shore up the pension funds to make up for the losses. The money would not have been there.

The same kind of thing could be said about any other aspect of Detroit’s budget. Already burdened by things like decades of abandonment, the decline of the auto industry and the inability to collect money owed to it by the state, the city was in no shape to stand up to the body blow it was dealt by the Great Recession and the collapse of the nation’s housing market.

By all means, our leaders should root out all the corruption they can find. If Detroit’s city government can be reformed into a lean, mean, waste-free municipal machine, then it should be. But none of that will end the foreclosure crisis or provide a “mulligan” for the investment losses suffered in 2008.

To use a business analogy: It’s a problem if your employees are taking home reams of copier paper and improperly dipping into petty cash. But all of that becomes suddenly irrelevant if an electrical problem burns down the operation or a tornado hits the place. Likewise, residents of southeast Michigan might be better off (metaphorically) examining the wiring of our region and looking into the validity of the insurance policy, even as we (again, metaphorically) take steps to lock up the office supplies and install security cameras.

The actual problems Detroit faces are fixable. But to do that, we need to face what they really are. Calling in Batman won’t do the trick. The real solutions will require radical solutions, including a level of regional cooperation and sharing of resources never yet contemplated in this state.

Only if we are prepared to do that can we create a region that really works.

Metro Detroit should consider forming a regional police force

It’s a vicious cycle. The municipalities that have the most need for good police protection are often the least able to pay for it. So what happens? Crime fighting is inadequate, a lot of people and businesses move away and the situation gets worse. Then crime spreads to neighboring areas, people move away again, and . . . lather, rinse, repeat.

That’s about to happen again in Southeast Michigan unless regional and/or state-level action is taken to stop it. As I write this, Detroit is contemplating the layoff of hundreds of police officers – a move that could reverse impressive progress the city has made in reducing overall violent crime. Meanwhile, the much-smaller Inkster Police Department just announced it will lay off 12 officers, leading to fear that criminals there will see an opportunity and take it.

Those are just the latest examples of a trend toward reducing police protection where it least makes sense to do so – simply because local city budgets are tight and money to pay for more officers is not there. You can score one for the crooks; that is, unless we develop a regional approach to police funding that is less vulnerable to budgetary problems of any particular community.

By now, you may have guessed where I am going with this. Some of you who live in the suburbs are thinking: “Hey, wait a minute, the place where I live is safe. Are you suggesting that I should have to help pay for police for those people over there, using my tax dollars? How is that fair?”

Let me end the suspense. Yes, that is exactly what I am suggesting. And yes, it is fair. Hear me out.

As I mentioned in my Nov. 23 column, I strongly believe the way we govern Southeast Michigan ignores reality. Metro Detroit is more than just interconnected; it really is one big community. It’s a place where, except for purposes of divvying up tax money and political power, municipal boundaries have long ago ceased to matter very much. It’s typical for a family to live in Place A, but have husband-and-wife breadwinners who work in Place B and Place C. When they go to the movies or out to dinner, they might drive many miles to Place D.

Here in Southeast Michigan, we think nothing of making a 45-minute daily commute or driving an hour to take in a show or visit the in-laws. Thanks to our freeways, we routinely wander over a land mass that puts to shame the “home range” territory of an average mountain lion.

Thus, it is myopic to assume that crime “over there,” (meaning a place 15 or 25 miles away) is not a threat to folks “over here,” wherever that might be. “There” and “here” are just different parts of the same big place. And crime is the common enemy of decent people all over. We need to be unified against that more than we are divided from one another.

There are different ways we could move in that direction. For example, additional resources devoted to helping local police departments coordinate their efforts would be money well spent. But if we really want to ensure this region is able to combat crime in a consistent way, we need to do more than just share information. We need to share cops.

Other places are doing it. In New Jersey, for example, officials are considering plans to provide public safety entirely at the county level. I am skeptical about entirely abolishing local-level police forces. It makes sense for at least some cops to have a close connection to the neighborhoods they patrol. But, clearly we need to find ways to deploy officers in a flexible way and fund them in a manner that is sustainable in the long run.

One way to do that would be to supplement our down-sized city and county police departments with a new, shared police force serving the entire seven-county Southeast Michigan Council of Governments region. Such a force could help fight crime that stretches across municipal boundaries – notably drug trafficking – taking some strain off local officers over-burdened by routine police calls. It also could deploy officers, as needed, to help local police defuse crime “hot spots” and deal with emergencies anywhere in the region. Over time, such a force might serve as the vehicle for the sharing of expensive things like crime labs and advanced technology.

Such a plan could be paid for any number of ways. Probably the fairest and best way would be to levy a small, seven-county property-tax millage that would provide a dedicated, predictable and transparent revenue stream directly to the regional police force. Governance could be handled by elected or appointed board members representing each of the seven counties, with members apportioned based on each county’s population. To protect the interests of smaller counties, the rules of the board could require a super-majority for big decisions.

As with any human enterprise, there are numerous ways a region-wide police force could become screwed up. The potential for infighting and politicking would always exist. But if we could remain focused on defeating the common enemy – crime – a region-wide assault on the bad guys could make a big difference.

An aside: This week saw yet another stunning and example of unhelpful hand-wringing and doomsaying by the Detroit News.

On The Michigan View, a blog operated by the News, Bill Johnson, former chief-of-staff for the Wayne County Commission, and a Detroit-based consultant, declared Detroit to be more or less a dead city walking. “The city is like a comatose patient on artificial life support.” Johnson wrote in a post dated Nov. 28. “Its health is beyond the best corrective measures of an astute emergency financial manger. It must mercifully be allowed to die a natural death.”

I have no idea what Johnson means by that and he does not explain it. Does Johnson think the city should be disbanded? If so, what would come next? Would it be turned over to Wayne County? Broken up into smaller, bite-sized towns? Evacuated and then bulldozed? That’s hard to say. Maybe Johnson will make that clear in a future column.

News Flash: Detroit is not going away

Here is the thing about pessimism: It doesn’t get you anywhere. Throwing up your hands and declaring the hopelessness of social problems and policy conundrums does not make them go away. It certainly cannot solve anything.

That’s why it is disheartening when folks like Nolan Finley, who ought to know better, imply that the state’s largest city is simply doomed and there is nothing that can be done about it. In a Nov. 20 column, Finley, editorial page editor of the Detroit News, invoked the notion of the “end times” to describe Detroit’s current financial situation. At this point, Finley wrote, “Detroit’s fate seems tragically sealed.”

That kind of primal scream might be satisfying to those who see Detroit mainly as problem to be disposed of, rather than a challenge to be embraced. But it’s not realistic or helpful. Detroit isn’t a fall maple leaf that will dry up and blow away. On the contrary, Detroit makes up the roots and the trunk of its metro region and state – and is not going anywhere.

Why do I say that? It’s not just because I happen to live there.

First, of all, the historical significance of Detroit cannot be denied. Michigan would not be what it is now if Antoine de La Mothe Cadillac had not created his settlement on the straits 1701. It is in Detroit that our forebearers built grand monuments to God like Ste. Anne de Détroit, Sweetest Heart of Mary, and Jefferson Avenue Presbyterian. It’s where Henry Ford created his innovative Piquette Plant. Without the hodgepodge of immigrants, transplants from the south and others who came to Detroit to make a life, the suburbs – which now form the center of economic gravity for southeast Michigan – would not exist. That’s too much to throw away.

I also believe Michigan cannot hope to be competitive again without reviving the urbanity craved by the young and creative among us. If Detroit continues to decline, we’re going to keep losing them to Chicago, New York, Boston and other places where quality city life can be had. Don’t think so? Talk to some of the smartest undergraduates at University of Michigan, Michigan State or Wayne State. For the most part, they don’t wax nostalgically about life in subdivisions built atop former corn fields or the thrill of driving on I-75 at rush hour. More likely, they want to own a loft and ride a subway to work.

But even if you don’t buy any of that, one fact is undeniable: Whether or not the state could get along without Detroit is irrelevant. Detroit isn’t going to disappear. The city will not fall into the Detroit River and wash into Lake Erie. It’s not going to be annexed by Windsor. It isn’t going to be sold for scrap. As Detroit Councilman Ken Cockrel Jr. pointed out this week, it’s unlikely to be wiped out by a “zombie apocalypse” any time soon. Given that, pessimism is not an option because it is useless.

If  Detroit really does have a future (and it does), then the only thing left to discuss is what kind of future we want for it and what we can do to bring it about. That’s where things get hard.

I completely agree with Finley when he says Detroit’s situation looks bleak and that getting the city’s finances in better shape will be an ugly process. City employees will be laid off. Assets will be auctioned. Services will be cut. It’s possible that all of that will be overseen by outsiders brought in by the state.

But Detroit is not doomed, and its future need not resemble “chasing water down the drain” (Finley’s words, not mine) unless we choose to make it that way. It’s time to get serious about governing the Detroit area more like the region it really is, rather than the Balkanized set of little, disconnected fiefdoms that we pretend it is. To do that, we need to find ways to get over the racially charged suspicion and resentments that have kept us divided.

That will not be easy. Suburban communities fear that regionalism is just a gussied-up euphemism for “bailing out” Detroit and a lot of them hate the whole idea. Detroiters are suspicious that the real goal of regionalists is the wholesale theft of Detroit’s best assets (like the water system) by the same people who abandoned the city in the first place. Once the city is picked clean, they believe, city residents will be even worse off than they are now,

But as hard as the regionalist mindset has been to adopt, it’s the only path forward that won’t leave our grandchildren still assigning blame for the same old problems. So we have to take the risk.

Regionalism gets started when we recognize that the lines on the map of southeast Michigan are imaginary. The middle class people who fled the city over the past half century did not, I hate to tell them, flee far enough. And unless they move to Pluto, it’s unlikely that they will ever be completely free from the impact of problems like poverty, crime, drugs, unemployment and mental illness – all of which exist in concentrated form in America’s cities.

Like it or not, we’re all in this together. Detroit’s problems are your problems because, regardless of where you draw those lines on your map, the Detroit region really is one big community. If we abandon the richness of the city’s history, its institutions and its economic potential, we aren’t just hurting Detroit, we make the entire area – and in fact the entire state – less well off.

If you live, say, 20 miles outside the city, you are likely living in a place filled with movie theaters, shopping malls, nice parks, great hospitals and just about every creature comfort you could hope to purchase. Because of that, you might think you are immune from Detroit’s problems. But whether you realize it or not, you are missing something – a lot of things, in fact.

First, and most obviously, you are missing the economic impact that a vital, healthy city can provide even to suburban residents who never venture into it. Good cities are powerful economic engines. Some of the energy for that comes from tourism and entertainment. Some of it comes from cities’ ability to attract immigrants, who bring with them their cultures, their entrepreneurialism and a solid work ethic. More power is generated simply from the magic of urban density, which brings together people and ideas in unexpected ways.

The other things cities do for us can be intangible, but equally important. There’s just something about being in places with a connection to the past – historical buildings, neighborhoods once inhabited by the great people of the past, the sites of important, world-shaping events. Detroit has all of those – and some mighty nice restaurants as well.

Holding on to old resentments or minding our own little pots of tax revenue and power will not give the Detroit region a good bus system or light rail. It won’t fix our roads. It won’t make our municipalities more solvent. It won’t make our schools more competitive or make our kids more likely to stay put after college. Regional cooperation has the potential to do all of those things. So, let’s get going.

Let’s make Detroit the healthy center of a thriving region and state.

Thank goodness Obama was at the wheel to save the Big Three in 2009

If some of the latest thinking in physics is correct, there very well could be an alternative universe in which the federal government did not step in to rescue General Motors and Chrysler after the 2008 financial collapse.

Perhaps, in that alternative universe, Alternative Barack Obama lost the 2008 election to Alternative John McCain. Or, maybe, Alternative Obama simply chickened out of forceful intervention to rescue two-thirds of the Alternative Detroit Three.

Whatever the reason for the inaction, we can all be glad we’re not living in Alternative Michigan. In that universe, the Renaissance Center in the Alternative Detroit, the GM Tech Center in Alternative Warren, and Chrysler’s headquarters in Alternative Auburn Hills are vacant and a lot of factories have gone idle. Alternative Michigan also is bound to have unemployment that rivals or exceeds levels seen during the Great Depression. It also is, no doubt, a powder keg for social unrest as mass joblessness and despair take their toll on the social fabric of the entire state.

Yep. Alternative Michigan has to be a pretty awful place to be right now. They’re livin’ in Mad Max times. So it’s perplexing that all the major Republican presidential candidates are on record as saying the auto rescue was a mistake. What they’re really saying is that the dystopian situation of Alternative Michigan is exactly what ourMichigan should be facing right now.

OK, at this point, some of you will begin to challenge my premise. Maybe the Chinese would have swooped in with enough capital to save them. Perhaps GM and Chrysler could have emerged from a regular bankruptcy as lean, mean import-fighting machines. And even if GM and Chrysler had failed, wouldn’t that have opened up peachy-keen opportunities to re-think our economy and re-deploy our workforce in new ways?

Sure. And maybe C-SPAN will start getting better TV ratings than “The X Factor.”

People who make a living taking a close look at the auto industry and its economic impact think the collapse of the Detroit Three (for a lot of reasons GM and Chrysler probably would have dragged Ford down with them) would have generated anything but a rosy scenario for Michigan and the nation.

Back in 2008, when the auto rescue was being debated, the Center for Automotive Research (which, despite being based in Ann Arbor is no commie outfit) predicted incredibly dire consequences from a “major contraction” of the Michigan-based automakers. Among them:

• The rapid loss of 2.5 million to 3 million jobs in the U.S. – many of them permanently. 
• The collapse of the domestic auto suppliers, which could have disrupted production for every company making cars in the U.S. – including the foreign companies. 
• Increased prices for imported parts and supplies that would have been needed to substitute for the loss of domestically sourced items.

Mark Zandi, chief economist at Moody’s Economy.com, said in December 2008 that, for every one lost job in auto assembly lines, another nine jobs would have been lost “at auto suppliers, auto dealers, steel and metal suppliers, plastic and rubber companies, health care providers, trucking and freight operators, and others.”

Keep in mind that all this would have happened at a time when the economy was already losing hundreds of thousands of jobs every month and demand for goods and services was shrinking rapidly. The chances that all those autoworkers would have found gainful employment elsewhere – or could all have launched Subway franchises or eBay businesses to replace their lost incomes – would have been slim.

So, while saving jobs in the auto industry was costly (optimistic estimates put the ultimate cost of the auto rescue $14 billion), it’s not like the collapse of the domestic auto industry would have been cost-free. Most of the auto refugees would have been thrown into the nation’s stretched-thin state unemployment compensation systems. Applications for Food Stamps – already shockingly high – would have soared into low-Earth orbit. Depending on how one does the math, it’s plausible that the taxpayers got off cheap.

Given all of that, I sure am glad to be living in this universe –the one in which GM and Chrysler are profitable and actually hiring people – instead of in Alternative Michigan. And I am very glad that President Obama was making the decisions back in early 2009.

Regulate Michigan’s medical pot business, but don’t kill it

In January 1920, as the 18^th Amendment to the U.S. Constitution was about to become effective, the evangelist Billy Sunday, one of America’s great crusaders against the scourge of “John Barleycorn” proclaimed that a grand new era was about to emerge.

“Men will walk upright now, women will smile and the children will laugh,” Sunday told a crowd in Norfolk, Va. “Hell will be forever for rent.”

Of course, things did not turn out that way. The battle against booze was lost and Prohibition was repealed after 13 years. But, attempts to use the force of law against intoxication and addiction persist to this day – even as they continue to be ineffective. Forty years after President Richard Nixon formally declared a “war on drugs,” Americans are signaling at the voting booth and in opinion polls that they are ready to consider certain forms of tactical retreat.

Michigan policy makers should heed that sentiment as they consider possible changes to the Michigan Medical Marihuana Act, passed overwhelmingly by Michigan voters in 2008.

At this point, I should explain that I am not a marijuana user and I don’t particularly approve of regular, recreational use of pot. Mary Jane supporters are just wrong when they argue that the drug has few ill effects. For some people I have known, it has proved to be psychologically addictive and a destructive force in their lives. On the other hand, I have been completely convinced that the medicalbenefits of marijuana are real.

People I know well and respect – in at least one case, this includes a person who had in no way ever been part of the American drug culture – have benefitted greatly from the medical use of cannabis to control nausea and relieve pain. It seems counter-intuitive to think that anything that is smoked can actually be used as medicine. However, marijuana works in cases in which other drugs fail. Nobody suffering from a serious disease should be denied access to marijuana if they can benefit from it. Nobody who needs the drug should be denied employment or housing strictly because he or she uses it.

On that score, I think the Michigan Medical Marihuana Act was a huge step in the right direction. But, I can see where critics likeMichigan Attorney General Bill Schuette are coming from when they say the law is too vague and needs to be clarified. Like anything health-related, the pot business needs to be effectively regulated. We also need to be sure society is protected from the dangers of users driving or operating dangerous equipment while intoxicated.

It’s also true that the fledgling medical marijuana industry in the state has a lot to gain from good-faith regulations that could give consumers confidence in the quality of the products sold and ensure medical use of pot is not just recreational use in disguise.

What we can’t have are regulations that restrict the medical pot business so tightly as to effectively ban it. We also should avoid heavy handed actions to “enforce” legal interpretations that are untested in court and/or subject to clarification by the legislature. Groups like the recently formed Michigan Association of Compassion Centers, a trade group for the medical marijuana industry, are right when they imply that recent raids of pot dispensaries have the feel of intimidation.

Michigan voters were serious when they voted to approve the use of medical marijuana. Any legislation passed should respect that. If it doesn’t, then Gov. Rick Snyder ought to veto it and voters should take notice.

Side note: Anybody interested in the history of the Prohibition era – and Michigan’s role in its downfall – really should check out Detroit native Daniel Okrent’s fascinating book, “Last Call: The Rise and Fall of Prohibition.” You’ll never look at the Detroit River the same way again.

Mullin saga spotlights need to think radical thoughts

If the Wayne County airport board thought firing Turkia Mullin would end the controversy surrounding the “severance” she received – and then gave back – after leaving her last job, it looks like they are wrong.

Unless the board finds a face-saving way to sever Mullin’s employment contract on terms acceptable for both sides, this circus is going to be in town for a long time. It’s a show nobody wants to see. And it has the potential – like the continuing Kwame Kilpatrick saga – to make the state’s most populous region look silly, backward and dysfunctional. Something has to change.

At this point, it is hard to make judgments about the merits of Mullin’s threatened lawsuit. Politically, the decision to fire her seemed unavoidable. It now will be up to the lawyers to decide whether the terms of her contract were violated and whether or not the board acted properly when it made its choice in a closed session.

What’s very clear is that Michigan can’t afford more drama like this. The predictable partisan attacks, finger-pointing and posturing that are sure to follow this won’t help, either. What we need is for some grown-ups (if they can be found) to take a long look at how southeast Michigan is governed and figure out how to make the region’s governments more transparent, sustainable and well-managed.

There already have been calls for new leadership in Wayne County. Maybe that is required. But that won’t solve the problem either, unless the new leaders (or the current ones) are willing to start thinking radical thoughts. We have to be prepared to re-think just about everything and move beyond our historical aversion to sharing power and working together across municipal lines.

Here are some things the Detroit region should ponder now:

Are our executives too powerful? Organizers of the annual Detroit Regional Chamber Mackinac Policy Conference like to trot out the region’s “Big Four” leaders, which are Ficano, Detroit Mayor Dave Bing, Oakland County Executive L. Brooks Patterson and (most recently) Macomb County Executive Mark Hackel. There is a lot to say for having identifiable, accountable people at the top who have the authority to get things done. But, in the wake of the Mullin fiasco, it is worth considering whether such figures are subject to enough oversight and well-defined rules. Call me crazy, but I’m thinking there could be room for improvement there.

Do Detroit and Wayne County have to be separate entities?Indianapolis has a consolidated city-county government under which city and county governments are largely (though not entirely) consolidated. Would that kind of thing work here? It’s hard to say. But we should look at it.

Does it make sense for local governments to run their own benefit and retirement systems, each with their own rules and investment policies? The massive California Public Employees’ Retirement System (CalPERS) provides retirement and health benefits to more than 1.6 million public employees, retirees and their families and more than 3,000 public employers in that state. The CalPERS system is far from perfect. But, again it’s an approach worth considering.

How does metro Detroit become the transportation hub it ought to be? Whatever one thinks about how Wayne County Executive Robert Ficano has handled the Mullin situation, his aerotropolisvision is compelling. Add to that a comprehensive, regional mass-transit plan, rail improvements, repaired roads and a second border crossing over the Detroit River and we’ll be onto something. We are nowhere near there yet, and that is a tragedy.

I have no clue whether the ideas expressed above are the best possible ones for the Detroit region. I can think of plenty of problems that could be created by implementing any of them. Politically, each is probably as toxic as nuclear waste.

But then again, how is the status quo working out? Maybe we need to start thinking radical thoughts.

Hansen Clarke’s idea to save Detroit could be crazy enough to work

U.S. Rep. Hansen Clarke has a crazy plan to save Michigan’s largest city. Or, I should say, he has a plan that seems that way until one realizes every non-crazy idea for saving Detroit has been either tried already, or dismissed as politically impossible.

To some people, Clarke’s plan still might seem to be a little bit “out there,” even considering all that. But, crazy or not, Clarke’s bold proposal is getting some serious traction and picking up support from both sides of the aisle.

The centerpiece of Clarke’s proposal is something he calls a Detroit Jobs Trust Fund. Before you start thinking “federal bailout,” or “massive hand-out,” you should know that, while the fund would consist of real money, none of it would be yours – that is unless you live or operate a business in Detroit. And even if you do, it would not raise your taxes one penny.

Clarke’s bill would “capture the federal tax revenues collected from persons and entities in the City of Detroit to be invested in local redevelopment efforts for a period of five years.” In other words, it would use Detroit’s own money to fix the city by (and this should be music to the ears of liberals and Tea Party patriots alike) denying about $2 billion per year to the U.S. Treasury.

The largesse would not come without strings. The trust fund would be used only to pay down the debts of the city and the Detroit Public Schools, and for things like public safety, education, needed infrastructure projects and “job development initiatives.”

Clarke’s trust fund bill is part of a broader plan (summarized here) that, among other things, would temporarily eliminate capital gains taxes for investments made in the city and modify visa requirements to encourage immigrants to create jobs in distressed areas like Detroit. Clarke also makes a lot of suggestions intended to help the national economy, such as providing cash assistance to encourage hiring, tax incentives for companies that retrofit buildings with “green” technology, reducing the cost of education and slowing the rate of foreclosures.

It is, however, the Detroit Jobs Trust Fund bill that has attracted the most attention – in part because it is a simple, audacious idea that potentially could be replicated nationwide. Rep. Candice Miller, R-Harrison Township, whose district does not include any of Detroit, is among the 31 co-sponsors of the bill.

In an interview with Detroit Free Press columnist Rochelle Riley, Miller said Clarke’s plan “could be an inexpensive way for the federal government to have some real meaningful urban agenda” and help Detroit, in particular, “get the debt paid and get ahead on crime and do something about the infrastructure.”

I completely agree. So far, fixing America’s urban centers has been like trying to install a sprinkler system in a building that’s already ablaze. Sure, the sprinklers would be a good, long-term solution to the fire problem. But, putting out the flames on the scene will always be more urgent than installing new pipes to fight future conflagrations. Likewise, never-ending revenue shortfalls make it hard for city leaders to even think about making investments that could pay off in the future.

The trust fund could give Detroit a second chance while helping to accelerate and expand a palpable resurgence already taking place in some parts of the city. And it would do it by simply giving Detroiters the chance to help themselves – with their own money.

Does Clarke’s plan have a chance? In this Congress, it’s impossible to overestimate the challenges facing any bill, from any Democrat – especially one that would address the needs of primarily Democratic voters. But, then again, it’s also hard to count Hansen out.

I had a tiny part in helping Clarke get elected – a little entry-level volunteer work that consisted of making some phone calls, canvassing door-to-door and marching with him in a parade. From that vantage point, I had a good chance to observe him and take his measure.

Clarke, like a lot of politicians, is fond of saying things like “the people have all the power.” The difference is that Clarke, who grew up on the mean streets of Detroit’s east side where faking it can be fatal, actually means it. When he says it, he isn’t spouting trite rhetoric or merely trying to rev up a crowd. He is issuing a warning. Clarke wants those in Washington and elsewhere to know that “people power” is real and that he considers himself to be an instrument of the people.

It’s a simple and powerful message. And Clarke’s proposal backs it up by asking Washington for little more than the chance to exercise that power locally, directly and with money already in the community.

If sincerity and tenacity still count for anything in the hyper-partisan atmosphere of today’s Washington, Clarke’s crazy idea could well end up being the law of the land.

Occupy Wall Street: Good people in need of a coherent agenda (and I’m here to help)

Is OWS a rebellion in search of a cause? To some extent, it is. But never fear, I am here to help.

As I said I would in my previous column, I have spent some time hanging out with the Detroit OWS crowd. No, I have not been camping out in Grand Circus Park. I am not committed enough to my craft to sleep in a drafty tent in October. But I attended the group’s initial meeting and have spent some time visiting the “occupation” site. Based on that experience, I have learned a few things:

First, some of the hangers-on in the OWS crowd really are the sort of garden-variety radical nuts one sees selling communist newspapers on college campuses. But for the most part, the OWS crowd is not crazy, not anti-American and not particularly anti-capitalism. They are just ticked off.

Second, the OWS movement, which is moving into its second month, is pretty clear about what it is against. In a nutshell, most OWS participants think the roughly 1 percent of Americans who can afford to buy members of Congress have rigged the economy in their favor. They want that to stop.

What’s less clear is what OWS (aka the 99 Percent Movement), isfor – other than, say, a basic restoration of the old-fashioned social contract that created the American middle class. How to get there? That’s not so clear.

In fairness, it’s not surprising that a brand new grassroots movement like OWS lacks a detailed platform. But, to some extent, I think critics are right when they say OWS needs very soon to start making some specific suggestions. So, I decided to help.

What follows are eight points I have circulated among the Detroit OWS crowd – to a fairly good response. I was so encouraged that I also e-mailed these ideas to OWS in New York. If I hear back from them, I’ll let you know.

1. Reinstate the Glass-Steagall Act, which created a healthy separation of commercial and investment banks. The repeal of Glass-Steagall Act in 1999 made possible some of the worst abuses that caused the banking crisis of 2008. Clearly, repeal was a failure and we need to go back to what works.
2. Pass a real jobs bill. The proposed American Jobs Act contains a lot of good ideas, but is insufficient. Congress should pass a bill that spends even more on infrastructure, devotes more money to education and includes direct hiring modeled after the Depression-era Civilian Conservation Corps and Works Projects Administration.
3. Commit to letting the Bush tax cuts expire. The tax rates of the 1990s worked well and produced federal surpluses. The Bush tax cuts didn’t. We should re-impose those tax rates – first on the wealthy and, over time, on everybody else.
4. Get the big money out of politics. There are a lot of ways in which this could be done. One of the best ways would be to create a system for public financing of campaigns. But less-dramatic, intermediate steps that move us in the right direction should be supported.
5. Overturn the U.S. Supreme Court’s Citizens United ruling. This will probably require a constitutional amendment declaring that the Constitution of the United States protects only the rights of natural persons. The rights of corporations should be limited to those outlined in statutes passed by Congress and state legislatures.
6. Review all trade agreements and renegotiate the bad ones. Free trade can be a good thing, if it is thoughtfully set up with the interests of American workers in mind. Too often, it isn’t. Trade agreements that pit American workers against low-wage foreign labor in a race to the bottom need to be altered or eliminated.
7. Rebuild America. Future generations need this one to leave them with a strong national infrastructure. If we are going to do that, we need to get started with all deliberate speed.
8. Protect health care reform and build upon what has been passed. The Affordable Care Act is far from perfect, but scrapping it is a recipe for decades of further inaction. Let’s instead concentrate on making it better over time, establishing access to good health care as a right for all Americans.

Why I might help occupy Detroit

After initially getting big play on liberal websites and almost nowhere else, the Occupy Wall Street movement is finally getting attention from the mainstream media – which is what its organizers wanted. Good for them, right? Not really.

When Oscar Wilde said “the only thing worse than being talked about is not being talked about,” he could not have known about today’s cable news, talk radio and social media. These days, when those doing the talking misrepresent and mock you in front of a national audience, that’s a problem. And, oh boy… OWS, which is just now getting started in metro Detroit, has trouble on its hands.

Fox News, predictably, has been apoplectic. Sean Hannity recently had Ann Coulter on his show to talk about “the destructive Occupy Wall Street protests.” Coulter, true to form, was more than happy to describe OWS as a “classic mob uprising.”

Rush Limbaugh has not given the protesters even that much credit. “Parasites” is a word he has used to describe them. Recently, CNN’s Alison Kosik used her Twitter feed to describe the purpose of OWS as “bang on the bongos, smoke weed.”

To some extent, this isn’t entirely the fault of the media. I have been part of enough liberal protests to know they can attract some colorful people. Aging hippies still exist and, God love ‘em, you will find them at events like this. Almost invariably, somebody will show up to sell communist newspapers. Bongos really might be part of the festivities. If that’s all you see (or all you are looking for) when you arrive, it can leave a bad impression.

Look beyond the surface, though, and it’s clear that OWS (aka the 99 percent movement) is about a lot more than bongos, weed and the latest edition of Worker’s Vanguard. It’s about pain and insecurity. It’s about disappointment. It’s about people who were wiped out because they were laid off in middle age or got sick and lost health insurance. It’s not a joke. Any policymaker or politician who treats it that way does so at his or her own career peril.

Presidential hopeful Herman Cain, in particular, does not get that. “I don’t have the facts to back this up,” he told the Wall Street Journal, “but I happen to believe that these demonstrations are planned and orchestrated to distract from the failed policies of the Obama Administration.”

He then went on to accuse the protesters of being just a bunch of complainers. His advice to the protesters was “blame yourself” for not being rich or for being unemployed. “It’s not someone’s fault if they succeeded,” Cain said, so resenting them doesn’t help anyone. That is true, and Cain would have a point if unfocused, primeval envy of the rich was a key motivator among OWA protestors. Based on statements I have read on OWA-connected websites, it isn’t.

Like most Americans, what grinds their gears isn’t wealth – it’s the scheming, fraud and manipulation of the system some people use to get it. In the case of Wall Street executives, the problem is not that they are rich – it’s how they got rich. More than that, it’s about how they managed to stay rich after their recklessness crashed the economy in 2008. So, yes, OWA folks resent some specific rich people. But that does not make them class warriors.

They also are not bunch of stupid, lazy, welfare-sucking losers. Largely, they are people who have gotten an education, worked hard and did their jobs before having the rug pulled out from under them. The last thing they want is a welfare check or endless extensions of unemployment benefits. They want to work and they want their work to be valued. They want their dignity back.

Cain wants the OWS protestors to stop complaining and help themselves. Well, with all due respect, Mr. Cain. I think that is what they are doing. They are getting organized. They are sharing ideas. They are, maybe, becoming a political force to be reckoned with.

I don’t know what will come of these protests. But I know where those folks are coming from. I have been where they are and I know how it feels. For that reason, I’m going to spend some time hanging with the OWS crowd, just to find out more. If Mr. Cain would like to join me, that would be great.