Duvafiles made mention of this OpinionJournal.com editorial this morning. Originally I was going to make this a comment to his post but as I kept writing I saw it as an opportunity to expand my thoughts into a complete post. I have a soft spot for the state of Michigan, partially as an Ohioan who roots for “that team up north” (I’m even wearing my UM sweatshirt this morning) and Detroit sports teams in general. Plus they have a great pair of bloggers I link to.
The main similarity between Maryland and Michigan is that their economy essentially depends on one industry. But that one industry makes all the difference between the states.
It’s been said that when the Big Three sneezes, Michigan (and my native northern Ohio) catches a cold. Since the auto industry is struggling it’s put Michigan’s economy in the dumper – unfortunately the poor in the Detroit area put Jenny Granholm back in office last November and she’s going to continue her anti-business policies. So look for lots of traffic southbound on I-75 as both retirees and jobseekers head out of the state. It’s a shame but the Big Three put themselves in a less competitive position by allowing themselves to be cowed by Big Labor – after all, how many industries pay people who don’t work?
And the union seems entrenched with this idea. UAW President Ron Gettelfinger was quoted thus back in Walt’s Auto World, July 1, 2003:
“To be sure, the cost of the pensions and retiree health care is a significant issue for UAW employees,” he tells journalists, adding the union views legacy costs as “a legacy of fairness, a legacy of cooperation between labor and management.
It’s a legacy that was given to us by the generations of auto workers who founded this union…and we intend to defend it.”
Even with the numerous plant closings since this quote was uttered, the UAW is likely not going to change its bulldog stance when the next round of labor contracts with the Big Three are negotiated this year.
On the other hand, Maryland seems to have a dependence on a growth industry, that “industry” being government. Unless the nation comes to its collective senses, that particular industry shows no signs of ceasing growth, especially on the federal level.
The problem with this is that growth isn’t equal throughout the state. Growth in government is great for the Baltimore/DC corridor but making the state less business-friendly hurts Western Maryland and the Eastern Shore big time. Business can grit its teeth and deal with these policies along the I-95 corridor because there’s a lot of people with a lot of disposable income to make up for the regulations and loss of profit stemming from the red tape, but where income is in shorter supply and a competing, more business-friendly state is available in close proximity (true at each end of the state, not so much in the center) Maryland is hurt almost as badly as Michigan.
Unfortunately, the solution to both problems isn’t likely to be seen in either case for quite awhile as both states are locked into four more years of Democrat governance, Maryland moreso than Michigan. As Duvafiles points out, at least one legislative body is Michigan is still GOP-controlled and will do its best to fight Granholm’s tax and spend policies. Sadly for Maryland our “Politburo” is rarely more than a rubber stamp for far-left policies, and the places in Maryland that benefit most from all of the make-work government jobs are the places which roll up huge majorities for the Democrats at the polls. The Maryland GOP serves as the Washington Generals for this game – hapless foils for the antics of Martin O’Malley and the General Assembly.
I’m still fighting the rear-guard, guerrilla battle to change this though! One small step in this fight is to make sure HB448 and HB1022 don’t pass – the House holds a hearing on both on Wednesday at 1 p.m. Just take a read of these and see how many services they want to expand the sales tax (and associated business red tape) to cover. No one has made a move to raise the overall sales tax yet but I know that’s on the table too.
It’s time for the folks in Annapolis to wake up and realize that they may yet have two large sections of their state that become economic basket cases like Michigan, just with a better climate.
I was waiting for the punchline (the industry that Maryland is dependent on)… I figured if you were writing from SBY you’d say poultry (I went to the Perdue School of Business/SSU, so I think I can say that).
But you said Government. Really? OK, let’s go with that premise for the sake of argument.
Somehow you attempt to link the increase in government (as an industry) with making the state “less business friendly”.
I agree that it’s not business friendly, and I think the Wal*Mart legislation last year was ridiculous, but I fail to see how that might be caused by bigger government. Help me understand the linkage there.