Setting the stage for 2012's performance

Frank Sinatra memorably sang about it being a long, long time from May to December and about the days dwindling down to a precious few. 

That’s the way it is in Michigan as the darkness closes in early at the end of the day and we begin to take stock of the year that’s about to end. 

For a state that lost 857,000 jobs from 2000 to 2009 and led the country for years in unemployment, there is -- at long last -- good news on the horizon. 

A new University of  Michigan forecast shows Michigan probably will finish 2011 with around 65,000 new jobs, with the prospect of another 75,000 over the next two years.  Nearly a third of those new jobs will come from manufacturing, in particular, from the resurgent domestic auto industry. 

So Michigan, which nearly died when the auto industry went into a tailspin in 2008, is likely to ride our dominant industry back to semi-prosperity next year -- and in some years thereafter. Sure, diversifying our economy remains a desirable goal, but, for the short term, it sure helps to be on the right side of increased auto sales.

That’s got to be what Gov. Rick Snyder is thinking. His poll numbers are way down, thanks to Manuel "Matty" Moroun, who this year spent something like $5 million in TV ads berating the governor and defending his Ambassador Bridge monopoly. He also achieved notoriety as a deep-deep-pocketed, unelected power broker by scattering campaign donations across the political landscape -- donations that will not be visible to the public for months on end due to Michigan's miserably ineffective campaign reporting laws.

Most people in Lansing think Team Snyder botched the campaign to take $500 million from the Canadians to build the New International Trade Crossing across the Detroit River. I’m still trying to figure out why, if the new bridge is so all-fired important to the business community, Moroun got away with his TV ad campaign unanswered by folks who reportedly stood to benefit so much from a new bridge.

Money remains the mother's milk of politics. Put a very wealthy, very determined individual into the mix and the political process becomes noxious indeed.

Detroit staggers on

The other big story of 2011 -- Detroit’s financial crisis -- blew up late this year, when somebody actually read the accounting report concluding the city could run out of cash by next March … and leaked it to the newspapers. 

Of course, Detroit politicians and labor leaders got together for a press conference earlier this month, all asserting the city didn’t need an emergency manager; could manage its problems by itself; etc, etc. 

I’ve talked to a number of folks, both financial experts and politicians, about this. No one is willing to say it on the record, but privately almost all agree on a few points:

1. Even if the city cuts a deal with its unions, it won’t do anything about the structural deficit of billions in unfunded pension and health-care liabilities.

2. A “consent agreement” with the state that allows the city to make some structural changes probably won’t get far enough, either.

3. A takeover by an emergency manager from the state, although it sounds like a good idea in theory, is likely to provoke outrage – maybe even violence – in the city.

The scenario I hear most is this: Detroit will wind up in Chapter 9 bankruptcy and hope some out-of-town judge actually sees it as an opportunity to restructure the entire financial foundation of the city.

How the various constituencies will manage to tiptoe next year around the financial -- and racial -- realities of this terrible and complicated situation is a mystery to me. 

There you have it. In his play "The Tempest," William Shakespeare wrote, “the past is prologue,” suggesting that events past have a way of determining much of the future.  The events of this year – whether they’re our improving economy, struggles to build a new bridge without putting the Legislature up for sale or the dire financial situation for our largest city -- already have written much of story for 2012. 

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and president of The Center for Michigan, a nonprofit, bipartisan centrist think-and-do tank, designed to cure Michigan’s dysfunctional political culture. He is also on the board of the Center’s Business Leaders for Early Education. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.