BY ANDY KROLL AND JULIE ROWE
Daily Staff Reporters
Published January 14, 2008
With the Michigan primary only a day away, Republican presidential candidates have made numerous campaign stops in Michigan, which is struggling along with the once-booming auto industry that drove it for so many years. The state ended last year with the nation's highest unemployment rate in November: 7.4 percent. The rest of the country averaged 4.7 percent. And the recent subprime mortgage crisis has hit Michigan especially hard, leading to an uptick in foreclosures in an area where the housing market was already slow.
All weekend, the Republican presidential hopefuls focused their speeches on how they would help residents deal with high unemployment and low wages if they were elected.
At a speech Friday before the Detroit Economic Club at the historic Masonic Temple, Republican presidential candidate Mike Huckabee said a federal government with him at the helm would change federal tax policies and regulatory systems in order to save Michigan's ailing economy.
If elected, the former Arkansas governor said, he would work to eliminate federal, personal and corporate income taxes and replace them with a single consumption tax much like states' existing retail taxes.
He said the tax cuts would both "encourage people to work harder" and "encourage people to invest" in American companies.
Although Huckabee emphasized that he was a proponent of free trade, he said such trade relationships needed increased federal regulation in order to "level the playing field" for Michigan manufacturers and other companies.
"A lot of it is changing our taxes and changing our regulatory systems, making it so the people in this state can manufacture and build again competitively," Huckabee said. "It's also making sure our trading partners are playing under the same rules as Michigan manufacturers."
Huckabee pledged to use federal resources to revitalize Michigan's economy. He said training programs and education for workers would be encouraged, but not controlled by the federal government.
Despite plans of increased federal trade regulation, Huckabee stressed that his campaign was built on limited federal government and increased responsibility for state governments.
"The best government is the most local government," Huckabee said. "Washington loves to tell us what to do and then not give us the resources with which to do it."
Huckabee was not specific on what resources he would provide, but he pledged to find solutions to the strained economy after taking office.
LSA junior Justin Zatkoff, chairman of the Michigan Federation of College Republicans and co-chair of the Midwest Students for McCain said that Huckabee's goal to implement the FairTax plan is one way to deal with what he says is a "clearly unacceptable" taxation system.
"People who support the FairTax have come out and supported Mike Huckabee," Zatkoff said. "With Michigan's economy, one thing we can all agree on is that raising taxes does not work. Not only do we tend to raise taxes, but with the federal government, we waste so much money that we need to change something."
Huckabee said in Detroit and in a speech in Grand Rapids on Saturday morning that he would work to reform the tax code, an initiative he said would save Michigan's economy.
"I think it's fair to say that there was a time in this nation's history when Michigan saved America, and now I think it's time for America to save Michigan," he said.
In campaign stops throughout Michigan yesterday, Republican presidential candidate Mitt Romney promised that if elected, he wouldn't rest until Michigan regains its status as the "economic powerhouse" it once was.
Romney, the son of George Romney, former Michigan governor and president of American Motors Company, said Michigan's economy was failing in part due to over-taxation of both individuals and companies. To correct this, Romney said he would make Bush's tax cuts permanent.
Speaking at the Ford Senior Citizens Activity Center in Taylor and at a dinner meeting of the Ottawa County Republicans in Hudsonville, Romney said he would work to stimulate the economy in Michigan by putting more money in the hands of private research companies.
"I want to invest in research and development," he said. "You know where we invest substantially in science, we lead the world."
Romney said U.S. success in global markets in defense, health care and space exploration was due to significant investment in research. He said federal investment should be expanded to include the private sector research and development companies in fuel, automotive and energy technology and materials science. Through the development of new technology and products, Romney said Michigan workers would be able to generate manufacturing jobs that were once provided by the automotive industry.
"We ought to be investing substantial money here in Michigan in fuel technologies, in energy technologies, in materials science, in automotive technologies, basic science where products can be spun out and licensed to manufacturers who are willing to build here," Romney said. "We have to invent the technology."
Romney said the federal government has previously ignored the one-state recession in Michigan, which has compounded the problems facing the state.
"I want to make sure that Washington finally does something," Romney said. "If I'm elected President of the United States, I will use 25 years of business experience and economic experience to reignite the Michigan economy."
LSA senior Amy Drumm, chair of the University chapter of Students for Romney, said Romney's economic initiatives as governor of Massachusetts created 60,000 jobs and eliminated a $3 billion deficit in Massachusetts.
"Those who know him and have seen his record know he's able to lower taxes and create jobs," Drumm said. "There are a lot of conservative students on campus that believe in these principles and believe that Mitt Romney is the right guy."
Republican presidential candidate Sen. John McCain (R-Ariz.) promised to help Michigan compete in the global economy at a rally held in Livonia Saturday by cutting taxes and promising responsible government spending.
In a somber but optimistic address, McCain told the crowd that the U.S. economy is growing too slowly to be globally competitive.
"The conditions in Michigan are even tougher with the state suffering through one of the most severe recessions since World War II," McCain said.
McCain blamed Michigan's 7.4 percent unemployment rate and drop in jobs in the past year on poor economic policy.
"Michigan's problems are rooted in failed government policies," McCain said. "Heavy regulation, too much government spending and taxes and a high cost of doing business has hurt it dearly."
McCain said the state's recession would be hard to fix and that "tough choices" are necessary for Michigan to return to economic prosperity.
"Michigan problems, as you know, got worse last year when the state government nearly shut down," McCain said. "And Democrats refused to make tough choices necessary to focus spending on genuine priorities."
"That's not right, my friends. The worst thing a government can do is raise taxes, and yet that's what's happened here," McCain said.
Despite boos and heckling from the crowd, McCain said Michigan's automotive jobs that have disappeared won't be coming back.
"My friends, a little straight talk: globalization is here to stay," McCain said. "But that's not something to fear, it is an opportunity to be seized."
LSA senior Allison Schneider, chair of the University chapter of Students for McCain, said McCain's plans to stimulate the economy and create jobs would entice University graduates to stay in the state.
"John McCain's point is that those specific jobs that have left won't be returning, but there are opportunities to bring to Michigan," Schneider said. "If he were able to implement these plans, there would be a better opportunity for University of Michigan graduates to find jobs and stay in Michigan."