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Advice from the front line

Government activism is vital for job creation, says Jennifer Granholm, who grew up in California and learned tough lessons as Michigan's governor.

September 18, 2011|George Skelton | Capitol Journal

From Sacramento — Jennifer Granholm is a California girl — with a very California story — who was elected governor of Michigan at the worst time. Now she's back in California offering advice on how we and other states can turn economic rust into recovery.

Or, how California can avoid becoming another shuttered Michigan.

Actually, we've already failed in that, based on lost jobs.

According to figures released Friday, California still had the second highest unemployment rate in the nation in August, 12.1%. Nevada again was first at 13.4%. Michigan came in third with 11.2%, an improvement over the 14% of about two years ago.

Michigan seems to be slowly rebounding. California isn't.

Granholm, 52, became Michigan's governor in 2003 when its unemployment was only 6.6% but already rising. Detroit automakers were running on fumes and the state's economy was sputtering.

Michigan's state budget, like California's of recent years, was starving for tax revenue.

What Granholm ultimately learned the hard way, she says, is also applicable to her home state:

Spending cuts are necessary and tax breaks can help, but they aren't the whole answer. Government must also pick winning industries and invest in them, developing public-private partnerships. It must pour money into educating the workforce, especially in community colleges. And it needs to pare back public pay, pensions and perks. For starters.

That's from a Democrat who spells it out in a new book — "A Governor's Story, the Fight for Jobs and America's Economic Future" — written with her teacher-author husband, Dan Mulhern.

"I made cuts in long-cherished social programs that some loyal Democrats considered unconscionable," the former governor writes. "I disappointed many of our party's traditional allies, from public employee unions to educators to arts organizations....

"And if I had it to do over again, I would make many of the same choices — except that I would make them sooner.... The overarching lesson was that many of our old views of the world simply don't match reality anymore."

But, she continues, "tax cuts, deregulation and a hands-off approach [by] government don't amount to a magical formula for jobs, profits and prosperity....

"Tax rates play a minor role in business location decisions. For the kinds of advanced-manufacturing, high-tech businesses we were recruiting, [worker] talent is what matters, [along with] qualify of life, culture and the sheer 'coolness' factor of host cities."

Granholm notes that the current anti-tax revolution "exploded out of California in 1978" when voters passed Proposition 13. Shame on us, she seems to say. The measure not only limited property taxes but also required a two-thirds majority vote to raise other taxes.

"These restrictions have crippled the efforts of lawmakers to bring fiscal stability to California and have driven the state to the brink of bankruptcy repeatedly," she writes.

In today's polarized politics, Granholm, now teaching at UC Berkeley, could best be defined as a pragmatic moderate in the mode of Gov. Jerry Brown.

She undoubtedly wrote the book in hopes of polishing an image that was smudged during eight rough years in Lansing. And she may be applying for a Cabinet post in a second Obama administration, if there is one.

But she's worth listening to because she has credentials and brings to California the dual view of an outsider-insider.

Granholm was born in Canada but grew up south of San Francisco. As a teen, she won a local beauty pageant. And at 19, she lit out for Hollywood in a Ford Courier pickup "to try my hand at acting — one of the thousands of young blond wannabes," she writes.

She took acting lessons — good training for a future politician. She supported herself as a tour guide at Universal Studios and by fielding newspaper delivery complaints at The Times.

Stardom eluded her, however. "The cattle-call auditions for pretty girls willing to show off their assets and the vapid encounters with seedy agents and producers left me disgusted and angry," she recalls.

She enrolled at UC Berkeley and ultimately earned a law degree at Harvard. Full disclosure: She met my daughter there and they have remained friends.

Granholm married a law school classmate from Michigan. They moved there and she became a federal prosecutor, state attorney general and then governor.

I asked her what advice she would give Sacramento. She didn't want to be presumptuous, she said, but she did observe that:

-- With all the technological innovation in California, this state should be the fastest in the nation at issuing permits for projects. Instead, we're considered about the most pokey.

"Permitting reform has to happen.... You've got all these researchers doing wonderful breakthrough work, but they take all this technology and go overseas with it. Arghhh."

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