What’s the matter with Michigan?
Rise and collapse of an
Mason Gaffney, December 27, 2008
In 1995, through an accident of scheduling, two separate
meetings were merged at the Levy Institute, Annandale-on-Hudson,
It was an odd coupling: one group was of Georgists; the
other was of economic advisers to Governor John Engler of
Michigan, intent on cutting the property tax. Possibly some
hurried planner, we speculated, had confused Michigan’s “Single
Business Tax” with George’s “Single Tax”. Still for three days
we talked to, or at least past each other.
We warned Michigan what had happened to California after Prop.
In Lansing, however, the die had been cast.
advisors tuned out our words and went home to help him take
public schools off the property tax and put them on a sales tax.
Michigan’s fatal downslide accelerated.
Let us trace her path
from adolescence and vigor through long dominance down to
senility, where famous firms are dying, industrial cities
rotting, great universities shedding, public services declining,
public schools starving, unemployment soaring, and youth
fleeing. Michigan’s number of apportioned U.S. Representatives
has dropped from 19 in 1960 to 15 in 2000. The great University
of Michigan now charges the highest tuition of any public
university in the nation. Michigan’s “Big 3” auto firms have
crashed loudly and publicly, going to Washington to beg.
Hazen Pingree, mass transit, high wages, and the birth of
the auto industry.
From 1890-1900 Detroit’s population grew, in spite of the
depression, by 40%. That was faster than almost all other cities
By 1910 it had boomed another 60%, leading
the nation, and by 1920 another 113%.
The auto industry did it,
but why in Detroit?
It helped that Michigan had produced horse-
drawn carriages from its hardwood lumber, but so had other
places. It was not low wages, for Detroit paid better than most,
which of course is why so many people moved there so fast. It
was not business-dominated politics, for Michigan was a
Progressive state, a Teddy Roosevelt state that went with his
“Bull Moose” splinter party in 1912, the first eastern state to
adopt the Initiative and Referendum, an early Home-Rule-for-
cities state, an early adopter of direct election of U.S.
Senators, a high tax state (in an era when most state and local
taxes were property taxes). Governor Hazen Pingree’s 1897