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During the 'Lost Decade,' Michigan Shed More Jobs Than U.S. as a Whole

(In a Sept. 23 interview, the Democratic candidate for lieutenant governor, Lisa Brown, said, "I think the Granholm years, you know, weren’t as bad as we think.” This article is part of a Michigan Capitol Confidential series examining how the state’s economy actually fared during Michigan’s "lost decade.")

When the Great Recession hit the U.S. in December of 2007, state economies buckled.

But in the four years preceding it Michigan was the only state to lose jobs overall. The state lost 148,100 jobs from 2003 through 2007 while the U.S. added 7.6 million jobs.

Over the entire decade, from 2000 to 2009, the state lost 805,900 jobs, or 1 in every 6 – a 17.2 percent reduction in employment. The next closest state to bleed that many jobs was Ohio, which lost 9.9 percent of its jobs in those years.

Nationwide, the U.S. began the decade with modest declines in employment, but then job growth picked up strongly through 2007. It fell off a cliff in 2008 and 2009; overall, the U.S. lost 786,000 jobs from 2000 to 2009. While the Great Recession job loss in the United States was bad, Michigan’s decline began much earlier and was catastrophic. The Wolverine State lost more jobs over the decade than the net job loss for the entire nation

Christopher Douglas, an associate professor of economics at University of Michigan-Flint, said Gov. Granholm's policies were highly counter-productive.

But it is just so hard to know exactly how many job losses are attributable to her policies, Douglas said. "I think you can make convincing arguments that the yearly budget crisis and can-kicking contributed to job losses, as businesses hate uncertainty, as well as diverting state resources towards crony capitalist endeavors such as movie studios, green energy, and so forth."

Douglas placed most of the blame for job losses on the rising gas prices that choked demand for SUVs and the major auto companies being caught flat-footed to the changing consumer preferences as legacy costs started to kick in.

"The sheer magnitude of the poor management at these companies is staggering," Douglas said.

The state auto manufacturing sector played a role in Michigan's recession, but possibly less than many imagine. The state lost 219,000 jobs in the "transportation equipment manufacturing" category, which represented about two-thirds of Michigan jobs in that sector, but this was just 27 percent of Michigan's overall job loss during the decade.

The state has emerged from the recession with a more diverse job market. The auto industry accounted for one of every 13.5 jobs in Michigan in 2000, but just one in 24.5 jobs in 2014.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

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Appointments: A Rarely Recognized Gubernatorial Power

Which can have major effects

There is generally little recognition of how many appointments to boards, commissions and other governmental bodies a governor has authority to make, or how many members of such bodies a governor could remove. Some of these boards and panels are trifling, while others wield considerable power.

Gov. Rick Snyder exercised his authority over the Michigan Quality Community Care Council (MQC3) – the dummy employer used for the forced unionization of Michigan’s home-based caregivers – when he replaced all of its members on the eve of the 2012 election. This was the action that finally led to the end of the SEIU healthcare dues skim.

Governors also make appointments to the Michigan Employment Relations Commission (MERC). It was MERC, under former Gov. Jennifer Granholm, that gave its approval to what later became known as the dues skim. This year, MERC is expected to decide whether or not to uphold an administration law judge’s decision that said the MEA’s August Window is illegal.

With several of the commissions and boards for which a governor makes appointments, there is a brief period during which the Senate could reject them. Former Republican Senate Majority Leader Mike Bishop made a concerted and well-publicized effort to actively contest some of former Gov. Granholm’s appointments, but this ultimately had little impact. It appears unlikely that prior to Gov. Granholm making appointments to MERC the Senate could have anticipated the dues skim. There is reason to believe few lawmakers were aware of it, let alone its scope and the details involved, until it was unearthed by the Mackinac Center Legal Foundation.

“Not many people are aware of it, but a governor’s authority to make appointments to the various boards and commissions is very important,” said John Truscott, of Truscott Rossman, who was press secretary for former Gov. John Engler. “Many of them aren’t that significant, but others, for example the Transportation Commission and the Civil Service Commission, are.

“One of the amazing things that happened when Gov. Engler defeated James Blanchard, was that Blanchard had left a couple of thousand appointments unfilled,” Truscott continued. “Obviously, as a governor, you want as many of your people to fill these positions as possible.”

Inside Michigan Politics founder Bill Ballenger told Capitol Confidential that he has unique perspective on gubernatorial appointments in Michigan.

“At one time I was in charge of appointments for former Gov. William Milliken,” Ballenger said. “You’re right. Very few people know that there are literally hundreds of these boards and commissions. Many of the appointments are to unpaid positions. At one time governors used appointments as patronage but there have been a lot of reforms since then.

“Interest groups, such as labor and so on, try to get their people appointed to the various positions,” Ballenger added. “At Inside Michigan Politics we took a look at how different governors handled appointments. We found that Blanchard was terrible, Engler was great, Granholm was better than Blanchard and Snyder has been somewhat better than Granholm.”

The list of boards, commissions and other bodies to which a governor makes appointments is extensive.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.