The MC: The Mackinac Center Blog

Officials Caved to Red Wings on Corporate Welfare

Team should have paid for new arena on its own

Christopher Douglas, an associate professor of economics at the University of Michigan-Flint and a member of the Mackinac Center’s Board of Scholars, writes in Crain’s Detroit Business that the Detroit City Council and state Legislature should have caved to corporate welfare demands made by the Detroit Red Wings for the team’s new arena.

He also wrote about that topic here.

Media Continues Reporting on Teacher Opt Outs

Ten percent of those who could left the MEA last year

The Detroit News, WWMT-TV3 in Kalamazoo and Michigan Radio have all reported recently about teachers seeking to leave the Michigan Education Association under the state’s right-to-work law.

More information can be found at www.Augustoptout.org.

More Teachers Than Ever Now Know Opt-Out Rights

Courageous teachers stood up to MEA bullying

Some of the most courageous people I know are teachers.

Their job requires them to face students, parents, administrators, colleagues and the general public constantly. Their performance receives criticism regularly.

For the past year, we at the Mackinac Center have had the privilege of getting to know some of the bravest teachers in Michigan. They stand for principles rather than power. The organization that is supposed to represent them has chosen not to inform them of their rights.

These teachers faced the Michigan Education Association trying to ruin their credit; they faced name-calling from their peers and even from the president of the MEA, but they stood firm in their strongly held conviction that no one should be fired if they choose not to support a union.

While the Mackinac Center Legal Foundation provided legal support, these teachers stood up when they did not know what the result would be.

For two teachers, the MEA finally recognized their rights to leave despite missing the union’s so-called “August window” that they and many of their colleagues had never heard of before. An MEA official testified under oath that as many as 8,000 members had stopped paying dues.

These individuals blazed a trail for other teachers to learn about the MEA’s formerly non-publicized policy of members being allowed to leave only in the month of August.

Being silent on the matter is one thing, but actively putting up roadblocks to keep members from leaving is quite intentional and wrong.

We’ve seen where the MEA sent a misleading “Nonmember Informed Consent Form” to members who wanted information to get out of the union. The recipient is expected to initial the form 25 times, and even after that, may not have properly opted out of the union.

We’ve seen where locals have made false claims, telling members they would miss out on a benefit if they were no longer financially supporting the union.

Despite having to fight an uphill battle, many MEA members now know the process of opting out of the union due to www.AugustOptOut.org. One of the members told us, “I was pleasantly surprised that dozens of my colleagues had already opted out just as I have earlier this month.”

I left out the name of the now former member because I respect their privacy. However, there have been instances where local unions have tried to shame non-members by making their decision to leave the union public.

Last year, roughly 15,000 MEA members were eligible to stop financially supporting the MEA. About 10 percent did (1,500). This year, 60,000 members are eligible to exercise their rights. The number of members who choose to opt out is not as important as the number of members who now know they have a choice whether to continue to financially support a union. That number is much higher than it was last year.

The Story of a True Hero Spreads

Sir Nicholas Winton Feted by Holocaust Memorial Center

Last night I shook hands with the son of one of my favorite heroes. The Holocaust Memorial Center in metro Detroit hosted Nick Winton, who gave a most inspiring presentation on the life of his father, Sir Nicholas Winton.

Sir Nicholas, who prefers to be called Nicky, was a 29-year-old London stockbroker who gave up a skiing holiday to visit Prague and witness firsthand the refugees who were fleeing Nazi tyranny. That visit led to his heroic deeds which enabled 669 children to escape.

Parents, desperate to save their children, sought his assistance and he established an organization to aid them. He worked for weeks to find homes for them and also to arrange safe passage to Britain. For years no one knew of Nicky’s efforts for these many children. An episode of the BBC television program “That’s Life!” aired in 1988 and many of the children met for the first time this humble, beautiful man who had saved their lives. A clip from that program was shown to the captivated audience last night as the son explained the profound effect on him to see his father wipe away tears when he met with his “other” children.

The trains left Prague and saved 669 souls, until Sept. 1, 1939, when the largest group of 250 children was scheduled to leave. Of course, on that day Hitler invaded Poland and the war had begun. Most of those lives, along with most of the families of the 669, were lost. Because of the determined effort of Nicky Winton and those who assisted him there were 669 saved. These “children” and their descendants number in the thousands and they have made their mark on the world in many different walks of life. The beautiful part of this story is that many have befriended Nicky and his family.      

Honored guests at the Holocaust Memorial Center were several of the children saved in the Kindertransport efforts. Certainly many of the other guests were children of children saved. How thrilling it must have been for them to hear this story related.

It was thrilling for my daughter and me as well. We have been privileged and humbled to have met Sir Nicholas. He lives in Maidenhead (25 miles from London) and is now a spry 105 years of age. We have been guests in his home and have lunched with him at his favorite Maidenhead pub. When you leave his presence you feel you have left a true hero. He says he is NOT a hero but only a man who did what needed to be done. His motto, “If it’s not impossible then there must be a way to do it” served him and the 669 children he saved well.

The Mackinac Center first learned of Nicky when then-President Lawrence W. Reed met and interviewed him. For more of this remarkable story please read “The Difference One Can Make.”

The documentary, “Nicholas Winton: The Power of Good,” tells more of this incredible man and more recently, “Nicky’s Family” was recently released. Both are produced by writer-director Matej Minac and are narrated by Joe Schlesinger of CBC fame. He, too, has a personal view of Nicky and his goodness. Yes, he was one of the saved children. Nick Winton mentioned that he visited Joe in Toronto as he made his way to the Holocaust Memorial Center for his presentation.

A new book written by Nicky’s daughter, Barbara Winton, “If It’s Not Impossible…..The Life of Sir Nicholas Winton,” tells more of the remarkable story.

The Holocaust Memorial Center plays an important role in educating the public on the horrors of tyranny, but also on the ways people held themselves accountable and assisted those in need. School groups from all over Michigan are hosted each year so the children of this new generation become aware of the history of the Holocaust. I offer a sincere thank you to the Memorial Center for an inspiring evening and to Nick Winton who represents his father, and his story, so very well.

A Uniquely Overqualified Candidate

LaFaive's satirical cover letter for MEDC job

(Editor’s note: The following cover letter is tongue-in-cheek satire, written after spotting a legitimate job offer online for another Michigan Economic Development Corp. vice president.)

August 28, 2014

Ms. Valerie Hoag
Senior Vice President
Business Development
Michigan Economic Development Corp.
300 N. Washington Square 
Lansing, Michigan 48913

Dear Ms. Hoag:

I read with interest your advertisement for a job paying up to $159,000 for individuals with as little as five years of work experience in public relations, marketing, international studies, business administration or economic development.

As you may know from my published work on corporate welfare, I possess a graduate degree in economics and 19 years of experience in the economic development and larger fiscal policy fields. I have also co-authored two exhaustive studies on economic development.

The first study focused on the efficacy — or lack thereof — of the now defunct Michigan Economic Growth Authority, which was run by the MEDC. We found that for every $123,000 in tax credits offered to the companies declared “winners” by MEDC jobs wizards, only one construction job was created and 100 percent of those jobs disappeared within two years. The second MEGA study, which included a broader analysis of the MEDC itself, found an empirical link between the MEGA program and jobs, but it was negative. That is, it found the MEGA program might destroy manufacturing jobs on net balance.

The good news is that this ineffectual program was mercifully put down. The bad news is that all the other programs run by the MEDC for the purpose of creating jobs probably create little more than job announcements. Maybe that is why the job description published online emphasizes an educational background in public relations and marketing.

I must confess I am delighted by the generosity of the MEDC’s pay. A salary range of between $106,000 and almost $160,000 for so little education and experience is simply remarkable. The good times must really be rolling for government bureaucrats these days.

If I may be so bold, I’d like to offer some advice that may separate me from other candidates. The MEDC should make all applicants for this position — including myself — submit their own investment portfolios to you as evidence that they can perform better than the market as a whole. In fact, every person involved in approving corporate welfare should be required to do so.

Displaying the investment track records of government jobs czars will give Michiganders confidence that their tax dollars are being invested wisely, by people with Warren Buffet-like track records, and not just political appointees and civil servants with little real-world experience in building a legitimate business.

I sincerely appreciate the opportunity to apply for this position at the Michigan Economic Development Corp. There are perhaps few other places in America where I can feel both overqualified and overpaid at the same time. 

Sincerely,

Michael LaFaive
Director
Morey Fiscal Policy Initiative

P.S.: Do you really want more economic development? Kill the MEDC outright and spend the $300 million-plus in annual savings on better roads, or just let all businesses and people keep more of what they earn. 

Right-to-Work, Tax Rates Paint Interesting Picture

Worker freedom, low taxes draw people

Scholars with the Mackinac Center for Public Policy, as well as other institutions, have used descriptive statistics in conjunction with empirical evidence to tell stories — sometimes profound ones. A good example of this was published recently by “Opportunity Ohio” and should be explored further.

One of my favorite uses of descriptive statistics numbers involves right-to-work laws and American migration. For many reasons, Americans pick up and move. Often such moves involve economic motivations. A great policy question is why so many Americans have moved from non-right-to-work states to ones with such legal protections. Is it just a coincidence or is there some type of clear link?

The evidence seems to be clear: a right-to-work law makes that state more economically attractive and tends to draw in-migrants.

Of the nine states with the greatest population growth from 2000 to 2009, six were right-to-work states and a seventh (Colorado) possessed a quasi-RTW law with its “Labor Peace Act.”

Economist Richard Vedder, a member of the Center’s Board of Scholars, examined population changes and other possible explanations including climate, taxes, population and other variables and found “without exception, in all the estimations, a statistically significant positive relationship … was observed between the presence of right-to-work laws and net migration.”

Opportunity Ohio, a Buckeye-based nonprofit group, released a chart titled “Two Winning Policies for Job Growth” in which it detailed states that maintain “winning policies” for job growth such as low personal income tax rates and right-to-work laws, as measured by employment. It found, for instance:

  • Seven of the 15 highest growth states since 1990 had no income tax;
  • Six others maintained rates below the national average, which was 5.6 percent;
  • Right-to-work states outperform forced unionization states. Nine of top 12 performers are also right-to-work states.

It specifically noted that “right-to-work states perform well even with higher income taxes.”

The Mackinac Center’s own empirical research confirms that the presence of a right-to-work law is a powerful economic development tool. We found that between 1970 and 2011, right-to-work status meant an average employment growth rate 0.8 percentage points higher than the rate would otherwise be. So, if a state would have had a 2.0 percent growth rate, right-to-work status made it 2.8 percentage points; a huge 40 percent difference.

The Opportunity Ohio people who put this graphic together believe that combining these two policies — low personal income tax rates and status as a right-to-work state — can be particularly effective for creating employment.

It is an idea worth exploring. 

MEDC Approves Corporate Welfare for Dealership

LaFaive: Special favors unfair to competitors, taxpayers

Michigan Strategic Fund board members voted Tuesday to divert almost three-quarters of a million dollars in local and school taxes to a private entity so that a Redford Township car dealership can upgrade its facilities, MLive reports. The Michigan Economic Development Corp. will give the dealership $719,528 to renovate its building and install a car wash on an adjacent piece of land it owns.

Michael LaFaive, director of the Morey Fiscal Policy Initiative, said this type of special treatment is unfair.

“It’s unfair because this dealer no doubt competes with other dealers not lucky enough to get a government handout,” he told MLive. “Robbing many taxpayer Peters to subsidize the corporate Paul only shifts precious resources around. Evidence shows it is unlikely to create net new jobs. Worse, this is money that could have accrued to local schools. Depriving them of such revenues represents a very high opportunity cost, unless of course some future graduates intend to wash cars on the new site.”

Michigan Education Digest

DPS self-created overspending crisis hits $127 million

The latest edition of Michigan Education Digest is now available online. Topics include Detroit Public Schools’ overspending crisis, year-round classes and charter public school decisions.

Vernuccio: UAW Facing Big Problems

Commentary in Capital Research Center's "Labor Watch"

Labor Policy Director F. Vincent Vernuccio has written a lengthy commentary about the problems plaguing the UAW — including its defeat at VW’s plant in Chattanooga, a 25 percent dues hike and leadership failures — for Capital Research Center’s “Labor Watch.”

Vernuccio also wrote about this matter here.

Vernuccio in 'Great Communicators Tournament'

Online voting runs through Sept. 2

Labor Policy Director F. Vincent Vernuccio is a finalist in Think Freely Media’s “Great Communicators Tournament.” Think Freely Media is a nonprofit organization that assists pro-liberty and pro-free market groups communicate more effectively. You can vote for Vernuccio online through midnight on Sept. 2. A dozen finalists will be chosen to participate in the tournament at the State Policy Network’s annual meeting Sept. 23-26 in Denver.

Vernuccio’s entry focuses on how right-to-work laws can make unions stronger.