ms, what's the matter with Michigan(1)

ms, what's the matter with Michigan(1) - 1 Whats the matter...

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1 What’s the matter with Michigan? Rise and collapse of an economic wonder Mason Gaffney, December 27, 2008 Introduction. In 1995, through an accident of scheduling, two separate meetings were merged at the Levy Institute, Annandale-on-Hudson, NY. 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. 13. In Lansing, however, the die had been cast. Engler’s 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. I. 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 except Cleveland. 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
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2 message to the State Legislature is a strikingly radical document, even for its times, and moreso for today. Mayor Hazen Pingree, soon to be Governor, was an early Georgist Progressive. He found city taxes biased for the rich; he changed that, and pushed the single-tax principle. He was a mentor to and model for the Georgist soon-to-be Mayors Tom Johnson and Newton Baker of Cleveland, and Samuel Jones and Brand Whitlock of Toledo. Pingree reformed assessments and raised property taxes in order to provide vital services for
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This note was uploaded on 02/16/2012 for the course ECON 123 taught by Professor Smith during the Winter '11 term at UC Riverside.

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ms, what's the matter with Michigan(1) - 1 Whats the matter...

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