The Governor..

Staying with local Michigan politics further, Jennifer Granholm has somehow managed to keep a 7%+ lead.  The reason this is shocking is that Michigan's economy is the worst in the nation. We're the only state that has kept losing jobs for the past four years.

I actually like Grandholm -- as a person. I think she carries herself well.  But I don't thnk she has the faintest idea on economics and business.

Here is the thing a lot of people ignore at the state level: Businesses create jobs. BUSINESSES. Not the government. I know people like to rail against "THE CORPORATIONS" but if you have a job, it's probably with a corporation right? Grandholm's policies have always struck me as somewhat anti-corporation. She wants to help the "little guy" but the best way to help the little guy is to help create an environment where companies want to be located in Michigan.

And Michigan totally sucks for business.  The only reason I'm here is because my wife doesn't want to move and now the company is too large to move it somewhere else.

What's wrong with Michigan?

• Single Business Taxes
• Asset taxes
• The roads are terrible and embarassing
• The largest city is basically a wasteland (Detroit)
• Unions rule the industrial segments
• Income taxes AND high sales tax
• The state AND local groups collect property taxes

You can read more about the tax situation here. One note on that page, it talks about how Michigan's income tax is relatively low compared to other states that have it. Sure. But other states don't usaully have both an income tax AND a sales tax -- and ours is higher than normal on that account.

Another thing about tis is that ironically, Michigan gets less back from the federal government than we pay in (especially compared to other states) which given the state of our roads, is another reason why it's baffling that Debbie Stabenow has such a lead for the senate race.

Governor Granholm is from Canada. So maybe to her, Michigan's climate is outright balmy. But compared to the other 49 states, Michigan's climate isn't that great. And that's the thing, we pay high taxes, get less back, and the weather isn't that great.  The governor can't control the weather but she can control the business climate here to a greater extent.

To be fair to the Governor, the Michigan constitution requires a balanced budget. This takes away a lot of flexibility for the government during weak economic times.

So where does Michigan's tax money go to?

• The prison system is 18% of the general fund.
• Colleges get 22% of the general fund.
• ..and 29% goes to community health (medicaid, mental health, programs for the aging) -- welfare programs.
• Another 13% goes to "family indepence agency" which is essentially another welfare program.
• And the rest goes to paying for the government itself.

So nearly half of the STATE's revenue goes to "services" to help other people (welfare programs). I am not totally adverse to some of these things, but when times are tough, the BEST thing the state government can do is create an environment for JOBS.

Granhold has been very resistant to cutting or eliminating taxes that would make the state more competitive becauase she doesn't want to cut the welfare programs. What she fails to understand is that if you get more jobs, you will get more tax revenue in the long run. 

What she should be doing is cutting significantly the money spent on the welfare programs in order to eliminate things like asset taxes (Taxes on equipment), double-taxation on property, and the single business tax.

Amazingly (as someone paying SBT) Granholm claims to have gotten rid of it in a recent debate.  That was news to me.

She did cut the single business tax.  But this tax should simply be eliminated. The SBT essentially is a tax in which employers cannot deduct the cost of their employees when calculating taxes. Let me repeat that: EMPLOYERS CANNOT DEDUCT THE COST OF EMPLOYEES when calculating taxes. I mean, who comes up with such a brain dead concept? It's been in Michigan for decades and the last governor was in the process of eliminating it entirely when Granholm came in and reversed the policy in the name of balancing the budget (as opposed to say cutting some of the spending).

Despite Michigan's rotten economy, Granholm still has a lead.  Michigan's economy has no affect on a technology company like ours. 

The 40 or so Michigan jobs we provide are no thanks to Granholm. In fact, if Granholm has been elected 4 years sooner, there'd be no company at all.  In the mid 1990s, we had to transition from OS/2 to Windows. As a technology company, we had a hard time securing credit lines. But the state had a program for small businesses that allowed them to borrow money from banks and the state would garauntee the loan. One of the first things Granholm did when elected was eliminate the program -- because (shockingly) many companies actually do go out of business and default on such loans.  But so what? The money spent there still went to create Michigan jobs that were taxed, that's a lot better than just handing out money to individuals who aren't producing anything in the form of welfare.

Granholm, while a nice person and I think is truly trying to do what she thinks is right, has no business being governor of a state -- any state. Her understanding of market economics is just too weak based on her actions.

If Devos does end up losing, I'll be sure to ask any of my friends or neighbors whose job just got eliminated (Ford just announced cutting 39,000 jobs a couple of weeks ago -- mostly from Michigan), who they voted for. If they say Granholm, it would certainly affect my sympathy level.  You get the government you want.