Street Talk: Economic lessons from across the pond
Answer to prayer.
Dixie Anderson of the World Affairs Council of Western Michigan put the Business Journal in touch with Michael C. Maibach, who was in town this month as a guest of the council.
Maibach, a senior fellow at the Aspen Institute’s 21st Century Manufacturing program, first presented at the World Affairs Council years ago when he was vice president of global government affairs at Intel Corp. Since then, he served a 10-year stint as president/CEO of the European-American Business Council.
“Our members like his fast-talkin’, engaging and fun presentations. And did we mention, he is very opinionated,” wrote Anderson.
Maibach expounded on lessons we can learn from the Euro Crisis, which has been dragging on for three years. The crisis can be seen as a symptom of problems that also threaten the future economy of the U.S., he said.
The first problem is demographics, according to Maibach. All of Europe has an aging population, as well as a shrinking number of young workers due to a low birth rate. The rate in Italy and Spain is the lowest in history: 1.3 children per set of parents.
Maibach noted that Europeans retire early, compared to the U.S., typically between ages 58 and 62.
“Ironically, the Greeks are about the earliest to retire. They’re the poorest and the earliest to retire. That tells you something,” he said.
The next big problem is Europe’s social welfare model, which Maibach said is showing signs of deterioration. The government bankruptcies are fueled in part by a growing number of retirees living on government pensions without enough young workers to pay taxes to support it.
“So taxes go up, and young people have even fewer children — because the taxes are so high.”
In Germany, he said, 20 percent of the population is older than 65. That won’t happen in the U.S. for about 15 years, he said. And our national birth rate is about 2.1, so “we’re replacing ourselves — barely.” Immigrants in the U.S. — “both legal and illegal” — contribute to that birth rate, he added.
The third big problem in Europe, he said, is increasing government regulation of business and inflexible unions. “And we’re getting some of that here, under the Obama administration,” he said.
GM closed U.S. plants when it had to, he said, but in France, a company’s decision to close a manufacturing plant would be fought tooth-and-nail by both the unions and government and probably would take three years to happen — and even then, the company might face fines.
Sarbanes-Oxley, Dodd-Frank and Obamacare were “all 2,000-page pieces of legislation,” with many more pages of regulations issued by government bureaucracies, and the IRS tax code is now 75,000 pages, he said.
“Europe has that same regulatory mindset that we’ve gotten into in the last five, six years in the United States, with these huge bills that nobody reads, and then these bureaucracies spin out all this regulation. And companies just throw up their hands and say, ‘What are we going to do?’”
Europe is our largest investor and largest trading partner, said Maibach.
“There is more U.S. investment in Ireland than in India, Brazil and China combined.”
Seventy percent of foreign investment in the U.S. is from the European nations, and 50 percent of investment in Europe is from the U.S., he said. In fact, he claims that 25 percent of this country’s financial relationship with Europe is trade, and the remaining 75 percent is investment.
“Companies sell all over the world but only invest where they think it’s safe (and) with a good work force,” said Maibach.
Jeanne Englehart is about to get some company.
Englehart, the 2013 Athena Award winner from Grand Rapids, will have a lakeshore counterpart on Oct. 1, when one of 12 finalists is honored with the ninth annual Lakeshore Athena Award. Gayle Davis, provost and vice president for academic affairs at Grand Valley State University, is featured speaker for the luncheon event at Trillium Events in Ferrysburg/Spring Lake.
The Lakeshore Athena is a program of The Chamber of Grand Haven, Spring Lake, Ferrysburg, the Muskegon Lakeshore Chamber of Commerce and the Michigan West Coast Chamber of Commerce. It is presented annually to recognize women who have demonstrated excellence in their business or profession, have provided valuable service by devoting time and energy to improve the quality of life for others in their community, have assisted women in reaching their full potential and who exhibit the spirit of regional collaboration.
This year’s nominees include Mary Boyd, Mercy Health; Leslie Brown, Metal Flow; Michele Buckley, Hines Corp.; Katie Cather, Cather Enterprises; Ann Harten, Haworth; Brigit Hassig, Four Pointes Center for Successful Aging; Linda Juarez, Hackley Community Care; Karen McPhee, Ottawa Area Intermediate School District; Kathleen Riegler, The Cheese Lady LLC; Nancy Ritchie, Sanctuary At the Shore; Brianna Scott, Brianna T. Scott & Associates; and Helen Zeerip, Teddy’s Transport.
Peter Secchia, one of the Business Journal’s longtime readers and supporters, is really getting into the Journal’s online offerings at grbj.com.
The former U.S. ambassador to Italy and chairman of Universal Forest Products dropped us a note saying he enjoyed the online Influential Women newsletter and specifically mentioned a story about Mary Kline and Amy Ritsema and their business, OnSite Wellness.
He called it a “nice story” but pointed out that the firm was started in the 1990s.
“We had an on-site wellness program at UFP in 1972. A new weight room, cardio equipment, handball court, large showers and restrooms,” he said.
But the changes addressed more than just physical fitness.
“We went 100 percent nonsmoking shortly thereafter, too. Had a smoking room with a coffin for a centerpiece. Loved the drama!”
Ah, some things never change.
Last week’s Street Talk plea to resurrect the West Michigan Grand Prix was heard — and dismissed.
The event that roared through downtown Grand Rapids some 15 years ago was put together by Sam Cummings and Dan DeVos, who obviously are still around, still interested in cars (especially the Fox Motors kind) and still huge supporters of downtown.
But there’s a logistical catch.
“People ask all the time!” Cummings said in a note to the Journal, adding that the Grand Prix will not return because the course’s original Turn 1 is gone.
“I do think it would be fun to repaint the start/finish line and put up a plaque …”
Yeah, but not as fun as having the actual race.
The Kent County Commission held an invocation prior to its recent meeting after Sam Jones-Darling told the board at its previous meeting he would sue the county if it didn’t stop doing so. He claimed the long-held county tradition violated the Establishment Clause of the First Amendment to the U.S. Constitution.
Jones-Darling wasn’t present at the Sept. 12 meeting, but a Kent County Sheriff’s Deputy was. He was specifically assigned to the meeting because of the remarks Jones-Darling made Aug. 22 during the public-comment portion of that meeting.