Four years ago, Gov. Jennifer Granholm predicted Michigan residents would be "blown away" in 2011 by the strength and diversity of Michigan's transformed economy.

At the time, the state's unemployment rate was 7.2 percent.

As the Michigan governor gave her final State of the State speech on Wednesday and spoke of how government programs have created jobs, about 750 protesters showed up on the steps of the state Capitol as part of a "State of the Citizens" rally to remind Gov. Granholm how far off her infamous prediction has turned out to be as she reaches the end of her eight-year tenure.

"What would I tell her?" asked Steve Newman of Homer, one of the hundreds who showed up to protest the policies that they feel have paved the way for a statewide unemployment rate of 14.3 percent in December 2009. "Thanks for nothing. We didn't get blown away."

The crowd chanted "Blown away, blown away" as speakers talked of tax cuts and less government intervention as the cure to Michigan's ailing economy.

The protest became animated when a group of about 70 student-age protesters tried to shout down the TEA Party (Taxed Enough Already) event. The group was trying to stop cuts to education. They tried to drown out the TEA Party speakers and chanted "We're students united, we'll never be divided" while the TEA Party protesters were saying the Pledge of Allegiance. While a TEA Party activist was speaking on the Capitol steps, one student grabbed a megaphone and shouted a profanity.

Sara Vitale, a student at Michigan State University, was one of the leaders of the student protesters.

"I'm completely sick of what is going on," Vitale said. "Education is the first scapegoat. Granholm is just the face of the problem. The whole system is screwed up."

Vitale defended the disruptive tactics of the student-age protesters, including the chanting during the Pledge of Allegiance.

"We're not on the same page," Vitale said of the TEA Party protesters. "They are fascists. ... They have a problem ... with our tactics? [Expletive deleted] that."

At one point, when Vitale shouted, "Tax the rich," Gary Saylor of Marshall, Mich., shouted back, "Get a job!"

"They are a bunch of spoiled, nasty kids," Saylor said.

Eventually, a row of about a dozen police officers slowly walked the student protesters back about 30 feet away from the Capitol steps.

As Gov. Granholm gave her speech, Saylor listened to the TEA Party speakers.

He was asked what he would say to Gov. Granholm if allowed inside.

"Oh, geez. 'Goodbye.' That is the best I can say about her," Saylor said.

Jim Chiodo of Holland, Mich., came to protest because, he said, the state politicians were "chasing the business out of the state."

"Maybe it's not just her, but it's her agenda," Chiodo said. "There is only one way you are going to create jobs and it ain't by spending government money. I wish I could hear her speak. I'd ask, 'Have you ever run a business and signed the front side of a payroll check?'"

About two hours before Gov. Granholm's speech, conservative political consultant Joe Munem sat in a Lansing coffee shop and said it would be a short night if he were the governor's speechwriter.

"She should just say, 'I'm sorry' and leave," said Munem.

---

A Michigan Capitol Confidential video of this event is featured below:

(Note: During her 2006 State of the State address, former Gov. Jennifer Granholm predicted that within five years Michigan residents would be "blown away" by the success of the economic plans she was unveiling that night. This month marks the fifth anniversary of that speech. The following was written last year, just prior to her final State of the State address.)

As Gov. Jennifer Granholm approaches her final State of the State address this evening, it is worth taking an unvarnished look at the economic well-being of Michigan. Since she took office, Michigan has experienced:

• A precipitous decline in the relative wealth of its residents. Since January 2003, Michigan's per-capita personal income rank among the states has dropped from 23rd to 37th. Our personal income is now $5,259 (13.1 percent) below the national average.

• A large decline in economic output as measured by state Gross Domestic Product, dropping from 26th at the start of the Granholm administration to 41st through 2008.

• A dramatic increase in unemployment. Michigan's unemployment rate leapt from 6.7 percent in January 2003 to 14.6 percent through December 2009. The state has had the highest unemployment rate in the nation for 46 consecutive months.

• Record setting out-migration. The U.S. Census Bureau reports that Michigan has lost population for the last four years in a row and was only one of two states to lose population last year. More than 87,000 people migrated from the state between July 2008 and July 2009 alone. United Van Lines — a household moving company — reports that 68 percent of all its Michigan-related traffic is outbound.

Remarkably, Michigan suffered economic decline even during the last national expansion, from 2002 through 2007.

Despite extreme budget pressures, the state has been able to maintain a fairly high level of total spending thanks to policy changes such as a) a 75 cent cigarette tax hike; b) a shift in property tax payment dates; c) new and higher fees; and d) the October 2007 $1.4 billion tax hike. Recall that state officials promised the public that this tax hike would put the government on firmer fiscal footing. It did not, and today the governor has publicly advocated for another tax hike - this one would take another $600 million.

It was not always like this. When Gov. Granholm first took office I wrote a tribute to her titled "Profile in Budget Courage" for her willingness to balance the state budget without hiking taxes. Specifically, I said, "If Granholm keeps going on the course she has set for herself, she could well become the model for the New 21st Century Democrat; one with feet planted firmly enough in fiscal reality to begin taking back the upper hand Republicans have gained on the national political scene, especially in Washington. But only if she keeps going. After so much talk about "living within our means," the governor must emerge from the inevitable legislative battle with a budget that is balanced."

Unfortunately, Granholm did not "keep going" as we had hoped and she turned — with the help of the Legislature — to countless policies that raised the cost of living, working and creating jobs in the Great Lake State. She has talked a lot about creating jobs, but her policies have not succeeded. Indeed, in her 2006 State of the State address she promised the Michigan would be "blown away" in five years (when she's conveniently out of office) by all of the jobs she would create with her proposed economic development programs. Specifically, she said:

In a few months, we will begin making prudent investments in the diverse companies that will grow jobs in Michigan. And by this time next year, we'll see new businesses doing just that. In five years, you're going to be blown away by the strength and diversity of Michigan's transformed economy.

Four full years later the economy is a mess. Unemployment recently peaked at 15.3 percent, the state lost 552,200 jobs from 2005 through 2008 alone, and economic output has declined by 4 percent statewide. Worse, Lansing's careerist political class — led by Gov. Granholm — is giving serious consideration to another tax hike, protecting the very government that has contributed to Michigan's malaise.

As the governor gives her last State of the State speech, I hope she realizes that there is no amount of soaring (or dramatic) rhetoric that will wash away the damage she and the Legislature have done to Michigan by choosing the wrong policy path at almost every juncture.

#####

Michael LaFaive is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.