|
Lou Glazer | [Editor’s Note: This is an edited transcript of a video conversation with Lou Glazer.]
Long before the recent U.S. recession rattled the country, the Mott Foundation’s home state of Michigan was struggling to reinvigorate its economy. Plant closings, unemployment and ongoing battles over the state budget only worsened as the Great Recession swept the rest of the nation.
Lou Glazer is president of Michigan Future, Inc., a Mott Foundation grantee since 1992. In this Mott Conversation, Glazer discusses key strategies – and challenges – for growing and strengthening Michigan’s economy.
Mott: What are the key issues to reshaping Michigan’s economic future?
Lou Glazer (LG): The state faces two fundamental choices. The first is whether we’re going to figure out a fiscal pathway back by recreating the old factory-based economy or by trying a new-knowledge-based economy.
The second choice is whether we’re going to try what I describe as "managed decline" – that is, we have fewer resources, so we just make do with less – or will we try to reverse the decline so that we start to grow again.
The only way we’re going to grow again is if we make changes and adjust to these new realities.
One of those realities is that, if we don’t have central cities that work, we’re going to be one of the poorest places in the country. None of us want that. So it really means that if you have a growth agenda, central cities have to be part of it. It does mean some sacrifices, like raising more revenue and cutting in other areas in order to make the kind of investments that will allow us to grow again.
Mott: Could you elaborate on the role of central cities in the state’s future growth and stability?
LG: It’s interesting that the futurists got it wrong. Their assumption was that because work is increasingly digital and can be done anyplace, it would be. It turns out that the exact opposite is happening, not just in the United States, but across the planet. The growing part of the economy, the knowledge-based economy, and college graduates are increasingly concentrating in big metropolitan areas.
So for a state to have a successful economy, its big metro areas have to be even more successful, and a core characteristic of successful big metros is that they have vibrant central cities.
Once you understand that central cities matter, you have to create “quality of place.” You have to invest in walkable, high density, mixed-use neighborhoods; you have to invest in transit; in arts and culture; and outdoor recreation. Those characteristics of vibrant central cities are particularly attractive to young people and others who are mobile and willing to relocate.
So ultimately a lesson that we have to learn in Michigan, which we’re having a lot of difficulty with, is that vibrant central cities are not part of the past, but they’re part of the future.
We cannot have a successful state economy unless Detroit works, Grand Rapids works, Lansing works, Flint works. Central cities matter because of the young talent concentrating there.
Mott: You often note that culture can have a significant impact on economic growth. Could you tell us more about that impact and its relevance in Michigan?
LG: We surprised ourselves at Michigan Future, when, in doing our work, we ended up concluding that culture – that is collective meanings, attitudes and beliefs, rather than arts and culture – trumps public policy.
Most of us went into this thinking that if you put together a given set of policies, all would be terrific. But when we looked at places that were doing well, we saw that the common core characteristic was not common policy, but common culture.
And the three things about the culture that were common in these successful places were, one, they highly valued learning. Many parents in Michigan still think their kids can do well economically without post secondary education; it’s deeply engrained in our DNA because it worked so well for us in the last century.
And an entrepreneurial spirit is second. It’s people taking responsibility for their own economic success. We also need to include the more narrow definition of entrepreneurship, such as new business start-ups.
Third is this whole notion that we need to be welcoming to all. Talent is driving the economy, its mobile and it comes in all of the human variations. If you don’t feel welcome, you’re not coming.
So those are the core characteristics: places that highly value learning, an entrepreneurial spirit and being welcoming to all. And Michigan is having trouble with all three.
We have to work through those three transitions. If we do, we’ve got a real good chance of making it successfully; if we don’t, we’re going to continue to decline.
Robert Greenstein | [Editor’s Note: This is an edited transcript of a video conversation with Robert Greenstein.]
The effects of the recent U.S. recession – widely considered the country’s worst since World War II – are being painfully played out across the country. An estimated 15 million workers are unemployed, revenue shortfalls have cities and states cutting to the financial bone, and the federal budget deficit looms at well over a trillion dollars.
Robert Greenstein is the founder and executive director of the Center on Budget and Policy Priorities, a Mott Foundation grantee since 1992. In this Mott Conversation, Greenstein discusses the recession’s impact on the United States, as well as ways that policymakers – with public support – can restore the country’s economic footing.
Mott: The recent recession prompted much attention to what has been called the country’s “shrinking middle class.” What are your thoughts on that description and the widening income gap in the United States?
Greenstein (RG): The middle class is still there. However, the middle class and, even more so, the people at the bottom are not sharing in the gains of economic growth to the degree they did in earlier decades, particularly after World War II. As a result, many of them are feeling squeezed. It’s different than shrinking, but it’s still a problem.
Our immediate goal as a country is to get out of this deep economic downturn. But the related goal, as we get back to an economy that grows, is that we need to have more broadly shared prosperity, so that people at the bottom don’t lose ground and people in the middle aren’t as squeezed.
That means we need the gains from income growth more broadly shared across the whole population and less concentrated at the top.
That’s hard to do and has a lot to do with broader issues of national and international economics. But we need government, particularly at the federal level, to pursue policies that at least mitigate the degree to which income growth gets concentrated among a small slice of people at the top.
Mott: What should policymakers do about the budget and when should they act?
RG: People often look at the policymakers in Washington and say “What’s wrong with them? Why can’t they just act?”
We know we have a longer-term deficit problem. And in the very short term, we’re in a bad economic downturn. We have nearly 10 percent unemployment and we actually need to do more in state fiscal relief, in unemployment insurance, and it can be deficit-financed in the short run, as long as it’s strictly temporary.
But the question is, why can’t policymakers start moving now to enact things that would go into effect, not today, but after the economy recovers, to deal with longer-term fiscal problems?
Well, it isn’t just a problem of the policymakers. They often reflect what their constituents, what the public thinks. The public often doesn’t understand that there are no easy choices. Where I fault policymakers is that they often don’t level with the public that there are these hard choices.
Right now, there are some easy things to do, but they’re small. The long-term problem is big. We’re going to have to close the social security financing gap, slow the growth of healthcare costs, deal with inefficiencies in government and raise a significant amount of new revenue.
Politically, all of these are hard to do. The sooner the public begins to understand that that’s the case, the more room there will be for policymakers to have the guts to take those actions.
Mott: How can policymakers ensure that low-income families are part of the country’s long-term economic recovery?
RG: We should approach this very carefully. We should have a principle at both the federal and state levels that, in dealing with fiscal problems, we do not further disadvantage people at the bottom; that we do not increase poverty; and, if possible, we actually couple actions to reduce the projected long-term deficits with actions to increase opportunity and reduce poverty at the bottom.
Someone might ask, “How can we do that?” or “That’s naïve, it won’t happen.” But it has happened. In both 1990 and 1993, the Congresses and presidents of those times – one a Republican president, and the other a Democrat – passed big deficit-reduction packages and ultimately reduced the federal deficit by a half-trillion dollars over five years. And in both cases they included anti-poverty measures, like expansions of the earned-income tax credit for low-income working families.
They reduced the deficit in ways that not only shielded people at the bottom, but actually lifted working poor families out of poverty and made some of those that were poor, less poor.
It takes political will, but it can be done. And, in my opinion, that’s the course we should be taking.
|