Howes: Governor's legacy shaped by economic times, opportunities taken
If you don’t think a growing national economy and a profitable auto sector can make a Michigan governor look like a hero, ask the last two occupants of the job.
Jennifer Granholm holds the dubious distinction of presiding over the “Lost Decade.” It's a confluence of events marked by the state's automakers stumbling into bankruptcy amid the global financial meltdown, deepening corruption at Detroit City Hall, mounting unemployment and her ideologically selective embrace of the global economy that ensured she never set foot in China as governor.
Her successor, Rick Snyder, marshaled his CEO cred and a Republican Legislature to leverage advantage from restructured automakers. He benefited from a federal corruption crackdown in Detroit he did not control, private reinvestment in the city measured in billions, falling unemployment, steadily rising equity markets and his business-minded embrace of China to position Michigan as the nation’s “Comeback State.”
The next governor, set to take office Jan. 1, is not likely to have it so good for so long. After nearly a decade of virtually free money, interest rates are rising because the economy is growing; rising rates make money more expensive; and more expensive borrowing impacts everything from car loans and mortgage rates to municipal bonds, corporate borrowing and profits.
Investors will be looking to see whether Detroit’s automakers and Michigan’s new political leaders can manage emerging economic headwinds as well as their predecessor rode the tailwinds. Meaning has Snyder been good, or just lucky — proving yet again that politicians don't pick their times so much as their times pick them.
And times change, always, irrespective of which party controls the governor's office and the Legislature. There's a credible argument that Michigan and its largest city improved markedly over the past decade — more competitive, more attractive to private capital and millennial talent — but there is no guarantee it will stay that way.
Over the past few months, shares in Detroit's three automakers have slumped at least 20 percent as evidence builds that the longest year-over-year sales and profit boom in the past 50 years appears to be coming to an end, returning to some semblance of normalcy. The other reason: investors looking for evidence the leaders of today's automakers are more good than lucky aren't yet persuaded this time is different.
Why should they be, any more than skeptics who question the staying power of Detroit's reinvention? If free money becomes more expensive, if pragmatic leadership in Lansing tracks the Trumpian times to become more ideological and confrontational, this place will slide right back to where it started a decade ago.
Who, except the most willfully deluded, would want that? It'd be counter-productive, self-defeating, a return to a past that culminated in the most ignominious set of bankruptcies ever visited on a single city or its defining industry.
Detroit's reputation as an abandoned city — as home to once-powerful automakers reduced to sloppy mediocrities, as epicenter of racial confrontation — still weighs heavily on its narrative of rejuvenation. And until its leaders in business, politics and the community demonstrate their ability to manage adversity as well as they've managed recent prosperity, doubters are justified in saying, "show us."
You want to know the singular challenge facing Democrat Gretchen Whitmer and Republican Bill Schuette? That's it. Collective memory expressed by voters can be notoriously short and selective, which is why the next governor should favor the words "never again" over "my way."
Contemporary history will not be kind to the new governor who squanders Michigan's improved economic position to score cheap political points; who injects partisanship into effective working relationships between Detroit and Lansing; who makes it harder to do business around the state instead of easier.
In a recent interview with The Detroit News, Ford Motor Co. CEO Jim Hackett issued a caution that applies as much to the next governor as it does the Dearborn automaker: amid the reckoning of 2008-2009, Ford "shrank dramatically in the crisis. We had a chance to come back and have scale advantages, but we let that slip away."
Michigan's next governor, Republican or Democrat, shouldn't repeat the same mistake.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.