Mackinac Center’s Solution to Poverty: Prosperity

(Editor's note: This Op-Ed appeared on the Lansing State Journal Web site Jan. 23, 2009.)

In a recent online column in the Lansing State Journal, Susan Demas correctly observes that Michigan's primary business tax is not good public policy, and that the state needs to adopt cost-saving reforms. But she implies that Mackinac Center recommendations in these areas are not broad enough to address issues such as poverty ("The Real Cost of Child Poverty," Jan. 16, 2009).

The fact that Michigan has a terrible business climate and a high poverty rate is not a coincidence. It's a cause-and-effect relationship that for years has been pretended away by policymakers, reporters and many others responsible for making this state so unattractive to investors and entrepreneurs.

Michigan's rotten economy and high poverty rate are not an accident of nature — they're the direct consequence of many bad public policies (not just high taxes) that for 20 years the Mackinac Center has worked to change. Those who wear their compassion for the less fortunate on their sleeves should ask how the poor are helped or hurt by these other policies the Mackinac Center has engaged:

Are the poor helped by insulating the public school establishment from the incentives to improve quality that would be generated by increased parental choice?

Are the poor helped by the fact that government employees at all levels in this state enjoy richer benefits and compensation than their private sector neighbors doing comparable work?

Are the poor helped by a Department of Environmental Quality that has abused the excessive regulatory discretion granted it by the Legislature to the point that it is forcing businesses to flee the state?

Are the poor helped by the Legislature failing to pass a law prohibiting employers from making union membership a condition of employment, when states that have done so enjoy thriving automotive industries?

Are the poor helped by a corporate welfare empire that legislators have erected as a means to avoid the heavy lifting necessary to reform these and countless other pernicious public policies?

These are all issues that the Mackinac Center has and continues to address on a daily basis — hardly a "one track mind." Indeed, one of the potential efficiency ideas we've explored in depth is the one specific cost-saving item Ms. Demas recommended — consolidating school districts. Our empirical research discovered that, surprisingly, most consolidations result in no savings, or even cost increases.

Beyond that, the Center has written favorably on policies that directly help the poor, including an Earned Income Tax Credit (EITC), tuition tax credits and the creation of more charter schools — especially in Detroit.

But more fundamentally, we believe that the true path to greater prosperity, opportunity and freedom does not travel through the halls of the Capitol. This is expressed in No. 101 of the "101 Recommendations to Revitalize Michigan" pamphlet the Center recently released:

"To meet complex human needs and build a better society, prefer the voluntary institutions of civil society — that network of private groups, community associations, religious organizations, families, friends, coworkers and their heartfelt interactions — to political society and the coercive instruments of government."

Part of the Mackinac Center's mission is to make Michigan a state that encourages investment and entrepreneurship rather than driving them away. This is the real solution to poverty in this state. Those who are sincere in wanting to replace poverty with prosperity will join us in advancing this mission.

#####

Jack McHugh is senior legislative analyst 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.