In a recent article, George Will says that “Michigan Has a Problem”, which is that its prosperity is withering as America’s automobile industry withers. When examined more closely, the state’s economy is really a microcosm of the larger problem embodied in the debate over protectionism vs. the opportunity society in coping with a globalized workplace. And, in the political response to this problem, bereft of better ideas, Democrats in Michigan and elsewhere are slowly but surely positioning themselves as the party of protectionism and the enemy of free trade, in the mistaken belief that free trade policies are responsible for the devastation of the old industrial base, reversing the generally bipartisan free trade consensus that has sustained our post-World War II prosperity.To compound the problem, Michigan’s corporate income tax burden ranks the second heaviest in the nation, and CEO Magazine’s annual survey, which considers factors such as taxes, workforce quality, regulatory burden, and labor costs, ranks Michigan 48th on the list of the best places to do business, ahead of only Massachusetts, New York, and California. The top five in this survey were Texas, Nevada, North Carolina, Florida, and Georgia. It doesn’t require much insight to determine that the states that are more attractive to business and job creation in the survey are those whose public policies favor lower taxes, less onerous regulatory burdens, and are regarded as having higher quality workers. And guess what? These states that are buying into the opportunity society are predominantly those that landed in the “red” column in the last presidential election. No surprises here.
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