Government 'solutions' won't provide a panacea

January 12, 2009
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The Newsmakers of 2008, profiled in this issue, represent the best and the worst of the year — and when combined, making the best of the worst.

The banking debacle and credit crunch (or crash) is severely limiting, especially in a region where venture capital remains elusive despite the best efforts to create such pools. Stock losses further deplete that opportunity, just as they have impacted contributions to nonprofit agencies.

While lack of access to capital stymies business growth in the short term, it also provides some time for analysis and preparation. And, as the Business Journal reported last week, community banks are again king.

Much ado is being made of economic stimulus plans from President-Elect Barack Obama, and Gov. Jennifer Granholm sees such plans as the answer to a prayer for Michigan. Government leaders, however, are again cautioned that such a package will not be salvation, but a short-term focus while the economy rebuilds. And it will rebuild, as a result of the business community’s ingenuity and entrepreneurial efforts. Please note: Entrepreneurs cannot be held back or dissuaded. It is a unique calling of great benefit to communities, and this is one community that has undeniably reaped this benefit throughout its history.

It is an old but important admonition: Government must get out of the way of business growth. The best stimulus that might come from the federal government was proffered here in the Dec. 29, 2008, issue: Put a one- to three-year moratorium on taxable events that occur when small business owners attempt to save the business by surrendering their life insurance policies, 401(k) or IRA accounts, or personal savings accounts. It’s not a bailout; it’s a simple moratorium to preserve payrolls, pay vendors and continue contributions to employee retirement accounts and health care benefits.

The state, too, must get out of the way. There is no more time to debate the intolerable effects of the Michigan Business Tax. And while a largely newly elected, inexperienced legislature prepares to “make their mark,” they must understand that making no mark is preferable. This legislature would do well to address the mistake of term limits. The Right to Work legislation should be forefront for debate. This is not a time for pet projects that only aggrandize an individual for the sake of “making a mark.”

If state legislators do not understand the importance of education, and education funding, it is likely they are surprised, too, by the collapse of the Big Three and to find themselves living in the Information Age. Education funding is a two-pronged issue. School districts can look to the model of Grand Rapids Public Schools’ consolidations and innovation.

City and county governments must revisit the programs of tax abatements that so clearly have provided expansion and new tax bases. Limitations enacted prior to this cycle of depravity are no longer useful. Like business, innovations of short- or long-term policies are necessary from the leaders of the community.

Government can best “help” clear this economic cycle by staying out of the way. Governments do not provide jobs that sustain communities for the long-term.

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