Editor’s note: This piece was updated in 2015 to add a 2001 forecast by [then] MEDC CEO Doug Rothwell.
This week Michigan Economic Development Corp. CEO Greg Main predicted for Michigan Radio News that this state will experience job growth in 2010. He also told West Michigan Business Report that "Michigan appears to be on the edge of coming out of this recession. We're starting to see some climbing out. I think we're going to see some pretty strong growth within the next year." University of Michigan economists (who have a history of flawed crystal-ball gazing themselves) suggest otherwise, believing that none will occur until the year after.
But history shows Main has nothing to lose from predicting good news.
Indeed, flawed Pollyannaish forecasts are the stock-in-trade of the MEDC, and result in little or no consequence to the prognosticator.
In short, MEDC talk is cheap. Its officials can make wild claims about their ability to see the future or "create" jobs from thin air, but none are ever demoted or fired when they eventually prove to be divorced from reality.
Here are some examples from a July essay. Note: The jobs and unemployment figures have not been updated to reflect the additional losses since then.
- "[T]his new structure will enable us to have an even quicker, more flexible economic development focus," and "ultimately that means more jobs . . . The Michigan Economic Development Corporation will help position Michigan around the globe as a hot business location." - Beth Chappell, then-MEDC board vice president, on the creation of the MEDC (MIRS, April 5, 1999).
Since 1999 Michigan has lost 426,000 jobs, more than any other state over that period.
- "There is only one conclusion to be drawn from a broader analysis of Michigan’s place in the world in the year 2001 — never before have we been so economically strong. Never before should we be so confident about our future. – Doug Rothwell, then president and CEO (and current Chair of MEDC Executive Committee) of the Michigan Economic Development Corp., March 2001."
In the next 153 months, the unemployment rate was never below the 4.7 percent unemployment rate enjoyed at that time. Unemployment in fact climbed and topped out at 14.2 percent in 2009.
- "Jeff Kaczmarek of the Michigan Economic Development Corp. predicted in a speech Friday that the state's jobless rate will drop to 6 percent next year and 5.4 percent in 2005, matching the national rate." - Tom Walsh column, Detroit Free Press, Nov. 11, 2003.
The unemployment rate flirted with the 7 percent level in both 2004 and 2005. It steadily worsened and today stands at 14.1 percent, highest in the country.
- "A year from now, our success in transforming Michigan's economy and generating jobs for Michigan workers will make any legislator think twice about reducing that 'job creation services' line item in the state budget," - Jim Epolito then-CEO of the MEDC (MIRS, Oct. 20, 2005).
In that year the state's unemployment rate increased from 6.5 percent to 7.1 percent. Per-capita personal income fell three places among state rankings and per-capita GDP fell four places.
- "My administration wants to make Michigan a magnet for economic growth - Plastech's expansion is evidence that we're making it happen."
- MEDC press release quoting Gov. Jennifer Granholm, June 17, 2003.
The marketplace had other ideas. Plastech closed its doors in 2008.
Given its record, it's hard to understand why anyone in the press or public takes seriously anything this politicized government agency says. It has been so wrong for so long it should be treated like the punch line to a bad joke, not a serious institution with a credible track record.
But as the saying goes, even a broken clock is right two times a day. We can only hope that 2010 will be the MEDC's broken clock moment.