Jack Lessenberry Essays and Interviews

Essay: Déjà Vu All Over Again - 3.31.09

The situation at GM is reminding Michigan Radio's Political Analyst Jack Lessenberry about another time in the company's history.

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General Motors was in trouble, losing billions, year after year. They were losing market share and customer confidence. Something had to be done. But GM's chairman and chief executive just wasn't moving fast enough, despite repeated warnings.

He wasn't willing to make the painful decisions necessary, despite repeated pleas. There was real fear that the world's biggest automaker might go out of business.

So in a dramatic coup that shocked Detroit, General Motors chairman was forced to resign. Yes, I know that happened this week.

But here's what you may not know -- that also happened seventeen years ago, in 1992. The circumstances were different, but uncannily similar. Back then, the chairman was Bob Stempel, like Rick Wagoner, was a lifelong GM employee.

He had reached the top rung only two years before. Unlike the man he replaced, Roger Smith, and unlike Wagoner, he was a "car guy," an engineer, not a finance guy.

Stempel had long wanted to be chairman. But he arrived at the time of a perfect storm. The company started piling up record deficits, small compared to the money GM has lost in the last few years, but bigger than anybody had ever seen in 1992.

General Motors's market share had fallen by nearly ten percent in seven years, and the company's core North American operations were losing more than a billion dollars every three months.

For years, the board of directors had mostly collected their compensation and rubber-stamped anything management wanted to do. But they now were deeply worried.

Most of them didn't know a lot about the car business, but they did know they didn't want to be blamed if GM failed. So led by former Procter & Gamble chairman John Smale, they acted.

In April of that year, they forced Stempel to replace key members of his management team who they regarded as incompetent cronies, including the president and the finance chairman. They wanted to send a strong message that GM's CEO needed to change the old culture and way of doing business. But it didn't work. As Paul Ingrassia and Joseph White described in their spellbinding book Comeback, the Fall and Rise of the American Automobile Industry, Stempel just dug in his heels.

Finally, he was forced to resign in October. A new management team came in, the youngest of whom was the chief financial officer, who was only 39. The new leader was hard-charging Jack Smith. Four months later, at a party to honor those forced to retire, one of those men got up and said, "What happened at this company can't ever be allowed to happen here again." When change was needed, change had to be made, no matter how painful. GM's new leader applauded the moment.

"This will never happen again," Smith said, "and we will win!" Eight years later, he handed over the reins of the company to that young finance director, a man who had been in the room the day of Bob Stempel's final humiliation, a man named ...

Rick Wagoner. You know, you just can't make this stuff up.

Essay: A Sense of Perspective - 3.30.09

Michigan Radio's Political Analyst Jack Lessenberry is thinking about the future of the auto industry.

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The other day I was corresponding with the legendary Jack Casey, who has been a public affairs analyst for more than forty years. I knew he'd come to Detroit to be a reporter for the Free Press more than fifty years ago, back in 1957.

Here's what he told me last week. "The first major story I worked on was the release of a major economic study by a University of Michigan team about Michigan's future." What did it say?

"Well, the bottom line was that Michigan must get off its dependence on the auto industry. So what happened?" he said. "Nothing. The attitude in the industry was, 'Why change? We are smarter and nobody can match us.'"

Well, we know what eventually happened. After years of decline, by the end of last year, the entire industry was on the point of collapse. Former President Bush threw Chrysler and General Motors a lifeline then. This morning, President Obama announced his plan. General Motors’ chairman Rick Wagoner is out, and the once-mighty automaker has sixty days to get its act together. Chrysler has thirty days to merge with Fiat, or else.

Nobody is likely to be completely happy with the Obama plan. As we saw last December, a significant faction in Congress thinks the government should just pull the plug and let those two once-mighty automakers declare bankruptcy and, maybe, go out of business.

On the other hand, the Detroit News complained yesterday that the president should stop "bad-mouthing" the auto industry. That's evidently because he said "There's been a lot of mismanagement (of it) over the last several years."

This is an industry that has been losing millions an hour for years, while at the same time stoutly resisting any kind of major and necessary change. If that's good management, Three Mile Island was one heck of a well-run nuclear power plant.

By the way, polls show a majority of voters outside Michigan don't think the President should "bad mouth" the domestic automakers. They think he should just let them die.

What we have to realize is that the President's cuffing the automakers around a bit for their past sins is not only justified, it is probably politically necessary if he is going to help them now.

Everything I've heard from President Obama on this so far has smacked of extreme common sense. Last week, he said he thought that while it is appropriate for taxpayers to provide help, the price should be that the industry reform itself.

Now it is time for a some common sense on our part. The domestic auto industry may survive. But here's the important thing to remember. It will never be what it was. Not only will its market share continue to shrink; never again will masses of unskilled kids be able to leave high school and get good paying jobs on the assembly line, jobs that will last for life.

That's over, forever.

Yes, we need to save the auto industry if we can. But the more important debate should be about how to invent a new future for the rest of us. And we better get started.

After all, we're only about half a century behind.

Essay: Debatable - 3.27.09

This week's mayoral debate in Detroit has Michigan Radio's Political Analyst Jack Lessenberry thinking about whether debates really help us make up our mind.

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Detroit Mayoral candidates Dave Bing and Ken Cockrel had a televised debate the other night, and you know we'll be seeing a lot more of these. Detroit has three more mayoral elections this year.

Flint has a mayoral election, other cities have elections, and it wouldn't surprise me to find candidates for the library boards in Bad Axe or Fruitport going at it on some local access cable channel.

This is a big change from my youth, when debates between candidates at any level were very rare. Abraham Lincoln and Stephen Douglas famously debated each other, but then the nation had to take a century off to think about whether this was a good idea.

Then, John F. Kennedy and Richard Nixon tried it, and the nation was mesmerized. However, those four debates had such an impact that they prevented any more debates for years.

Everybody agreed that those 1960 debates were the key factor in Kennedy's narrow win. Not because of anything that was said. In fact, college debate judges and those listening on the radio felt Nixon won them. But on TV, Kennedy looked tan, confident and handsome, and Nixon looked like a pale sweating corpse.

After that, there was no way any candidate leading in the polls was going to agree to debate his rival. That didn't change until 1976, when Democratic Presidential nominee Jimmy Carter needed to show that he had enough gravitas to be president, and Gerald Ford felt he had to debate because he was so far behind in the polls.

Now, presidential debates are the norm, in primaries as well as general elections, and the phenomena have spread to other offices.

Except -- these debates aren't really debates. What they are is joint press conferences. Reporters ask the candidates questions; they respond and needle each other a little, and that's it.

Sadly, this results in a lot of attempts to trip the candidates up and make headlines over relatively minor things. What we tend to remember from presidential debates are the gaffes and one liners.

Ronald Reagan saying "there you go again," or George Bush the first staring at his watch, wishing it was over.

It isn't much different on the local level. Everyone knows that Detroit has massive economic and social problems and needs jobs and investment more than anything. Some good questions were asked by the reporters in the so-called Detroit debate the other night.

Yet time was also spent talking about who lives where, who is renting as opposed to buying, who would live where if they lost, and who planned to run in more elections after this one.

That's not what happened in the old Lincoln-Douglas debates. They cut out the middleman. Instead, both men spoke at length explaining what they stood for, what they would do, and how they'd do it. Then they got a chance to criticize their opponent's ideas. Those debates lasted hours. If anyone tried that today, it wouldn't have a chance to beat American Idol. But if we really care about America and our communities, it might be worth a try.

Essay: Electric Energy - 3.26.09

Michigan Radio's Political Analyst Jack Lessenberry has been thinking about the current situation of the domestic automakers.

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We are waiting for the other shoe to drop next week. General Motors and Chrysler have until Tuesday to convince the government they are making progress at restructuring themselves, and moving toward a future that is profitable again.

If they fail to do that, the government can immediately call in the $17.4 billion in loans they've given those automakers.

That would cause both car companies to immediately declare bankruptcy. Of course, the taxpayers would never get that money back, because the automakers have already spent it all.

What Chrysler and GM really want is for the government to decide they have made enough progress to get more money. How much more? At least $20 billion, most of that for GM, once the world's biggest and richest corporation.

What the government will do is anyone's guess. General Motors laid off hundreds of white-collar workers this week. That's a time-honored move for an automaker in trouble.

But everyone knows you can't just cut your way to success. You need a new exciting car, or cars, that everyone wants to buy. When Chrysler was on the rocks thirty years ago, lee Iacocca kept them alive by telling everybody to wait till the new K cars arrived.

Now, people are pinning their hopes on the Chevy Volt, the new electric car scheduled to go into production next year. Last week, I talked to the man who may be most responsible for making electric and hybrid cars happen, the legendary Stanford Ovshinsky.

He was the principal inventor of the nickel-metal-hydride battery that powers your cell phone. He worked for years on an earlier GM attempt to build an electric car, the EV-1, until GM got cold feet.

If you want to know more about that, go rent the movie "Who Killed the Electric Car," in which Stan and his late wife Iris play starring roles. Stan, by the way, recently launched a new company, got remarried, and is working as hard as ever. And why not? He is only 86. I asked him about the Volt. "Well, it is a start," he said. "They will probably sell a few thousand, but... they are fourteen years behind the Japanese." Back in the 1990s, he went to Japan and saw that the hybrids were coming. He tried to tell GM, "and they laughed at us. They said they would never work, or sell."

Ovshinsky hopes the Volt is a success. But, as he noted, the company still hasn't decided on the battery to run it. The car will also cost more than $40,000, out of many people's reach.

The history of technology shows that in time, better electric cars are certain to be developed, and the price will fall.

Yet it is hard to see the Volt bailing out a corporation that is losing millions of dollars every hour. The new technology may do that in time. But the auto companies are running on empty right now. Next week we may find out if Washington will again refuel their tanks -- or decide it's time to stop being taken for a ride.

Essay: Fiddling While Michigan Burns - 3.25.09

Michigan Radio's Political Analyst Jack Lessenberry has been thinking about the problems the state is facing.

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The other day I was at a meeting of some of Michigan's top behind-the-scenes leaders. They are people who run businesses and some of our major institutions, or are recognized experts in their field. Some have held high office, though all are out of politics now.

Half of those who had political backgrounds were Republicans; half Democrats. You'd know many of their names, though this wasn't a public meeting, and I cannot reveal them to you.

Actually, who they are isn't as important as why they were there. They came together to discuss how to save our state. They disagree on issues, but they agree that Michigan's political system is broken, and we desperately need to fix it.

And they did not see much hope in the short term. None of them had much respect for the politicians in power now. One man snorted, "We're facing an economic tidal wave, and they are arguing over whether to ban smoking in cigar bars."

What is clear is that Michigan faces "the mother of all deficits." The governor says Michigan has a $1.5 billion shortfall for the year starting October 1. But that horrifying figure is way too optimistic.

Last month alone, the state took in more than $100 million less than it was counting on. This month may be worse. Unemployment is continuing to rise. That made me think Michigan's real budget deficit for next year will be closer to $2 billion. I asked those at this meeting what they thought. "It'll be two and a half billion," one said.

The budget has to be balanced, and normally, that would mean drastic budget cuts, tax increases or both.

Yet nobody in Lansing seems to be sufficiently worried.

What's really going on? How are they going to cover the deficit? One man looked at me like I just fell off the turnip truck.

"They are counting on using the federal stimulus money, this coming avalanche of cash." But isn't that supposed to be impossible? I mean, that's clearly not what the stimulus funds are supposed to be used for. "You can bet they have lawyers all over Lansing working on how to do that," one leader with years of experience in the state capital told me.

What Lansing really needs to do instead is engineer a major overhaul of the way government is financed, one designed at making the state more solvent and more competitive.

But nobody seems willing to tackle that. That would be hard work. And thanks to term limits, Michigan has short-term politicians and long-term problems. One expert told me the stimulus money will mask the symptoms of our broken system for the next couple years.

Then the roof will really fall in. We'll have massive deficits and no prospect of more help. Yet thanks to term limits, most of the lawmakers deciding how to spend this money now will be gone, including the governor and almost the entire state senate.

We need responsible government, and we aren't getting it. And we need to start asking why and demanding our leaders do better.

Essay: End of Newspapers - 3.24.09

Newspaper readers across the state have been reading about the changes coming to local newspapers. Michigan Radio’s Political Analyst Jack Lessenberry is troubled by the changes to the Ann Arbor News.

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I know a lot about the financial peril newspapers are in; after all, I have worked for them, sometimes in executive positions, for nearly all my adult life.

Nevertheless, I was shocked by the announcement that the Ann Arbor News was closing.

Not downsizing, not going to Internet-only publication. Closing, as in, going out of business. This is a newspaper that has been publishing continually under one name or another since 1835.

That's before Michigan was a state. That was before the University of Michigan moved to Ann Arbor. The paper brought the outside world, from the Mexican War to the moon landings, into Ann Arbor for more than 150 years before there was a World Wide Web.

Yet in the end, the web killed the newspaper. Killed it, in large part, because classified advertising migrated to the internet.

The newspaper, like other newspapers all over the nation, speeded its death by putting its content on the web for free. To young readers, paying for a newspaper is as alien a concept as paying to see the clouds in the sky.

They won't miss the newspaper much, not at first. The newspaper's core readers will, however. They are people over 40, who know how to read the internet, but prefer a paper in their hands.

They are people who like sprawling across the couch with it on a weekend. They aren't going to read it on their cell phone.

The Detroit papers are going to three-times-a-week delivery next week, in a clear effort to start weaning everybody off the paper product. But at least they say they will continue to give us a newspaper, just one delivered on line.

The Ann Arbor News isn't even doing that. After the paper folds in July, Advance Magazine Publishers, the vast corporation that owns it, will begin producing AnnArbor.com. This will have "social networking features", said Laurel Champion, the paper's soon-to-be ex-publisher. She said AnnArbor.com will be an "innovative community news and information service," that would feature "real-time conversations" and would be driven by reader input.

That's all very nice, but isn't really journalism. When I was in graduate school, my class uncovered an investment scandal involving the city of Ann Arbor, and then worked with the Ann Arbor News to expose and publish the truth.

I can tell you right now that the Watergate scandal would never have been exposed by WashingtonDeeCee.com, had that existed then. Nor do I see AnnArbor.com telling in-depth stories about what is happening with local government and education.

Those are the stories nobody but newspapers do. They aren't as easy to ferret out or as fun to read as the latest J. Lo news, but I think our democracy won?t long survive without them.

Back in the day, the Federal Communications Commission used to make broadcast stations provide news. Maybe we should assess everyone a fee to support independent and fearless community newspapers. Because if lose those, we may have Facebook. But we won't really have working communities anymore.

And that is the scariest thing I know.

Essay: Smoking Ban - 3.20.09

A possible ban on smoking is being talked about, again, in the state legislature. Michigan Radio’s Political Analyst Jack Lessenberry gives us a rundown of what’s really going on.

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Secondhand smoke kills people. It killed the lovely and brilliant Alice Trillin, wife of the brilliant humor writer Calvin Trillin. It has killed people I’ve known, and kills, by various medical community estimates, between 54,000 and 75,000 Americans a year.

That alone should be more than enough reason for Michigan to outlaw smoking in bars and restaurants. Additionally, polls have consistently shown that large majorities of the population are in favor of a total smoking ban. But the legislature has failed to pass one.

And here’s why. There are two main culprits. One Republican, Senate Majority Leader Mike Bishop, and one Democrat, State Rep. Bert Johnson of Detroit.

Bishop doesn’t want a smoking ban at all, because he fears it would be bad for some businesses. In fact, for a long time he simply prevented the state senate from voting on any bill to ban smoking.

But last year, he faced a revolt in his own caucus, led by State Senator Tom George of Kalamazoo, who, as a physician, knows just how terrible second-hand smoke can be. So finally, Bishop agreed to allow a vote, but on one condition. He would only agree to a total ban. No exemptions whatsoever. This was shrewd.

Remember, Bishop doesn’t want any smoking ban at all. Now, he knows he can’t stop a total ban from being passed by the Senate, but figures -- so far correctly -- that a total ban won’t pass the heavily Democratic State House of Representatives.

Why? Well, originally some blue-collar representatives feared the wrath of their constituents, who like to smoke in bars. But the real problem is the casinos. Canada is a civilized country which is generally ahead of us, and Windsor enacted a total smoking ban some years ago. That immediately boosted Detroit casino business by 30 percent, from smokers coming across the river.

Detroit casino operators reason that if Michigan bans smoking everywhere as well, these folks will have no reason to leave Canada, especially since their casino is somewhat nicer than any of ours.

So Democrats, led by Bert Johnson, the chair of the House Regulatory Committee, wanted a bill banning smoking in restaurants that had an exception for the casinos. They also wanted to exempt those trendy “cigar bars,” the kind of places arrogant young stockbrokers hung out before they helped destroy the economy.

But Senator Bishop said all or nothing. So we got nothing and no smoking ban, which is what he wanted all along.

And innocent people continue to die. You can argue that if smokers want to kill themselves, so what? Well, we all pay for it in terms of higher health care costs. And there are non-smokers who work in these places because these are the only jobs they can find, and it is hard to turn down any work now.

We owe it to ourselves to push our lawmakers to resolve this and get the most comprehensive ban possible, as soon as possible.

For if they can’t solve something this simple and important, than just what is a legislature for?

Essay: Too Few School Days - 3.19.09

The Center for Michigan recently commissioned a study about the state’s educational system. The study, called “School Days: Michigan’s Shrinking School Year,” shocked Michigan Radio’s Political Analyst Jack Lessenberry.

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Liberals liked to make fun of George W. Bush for his frequent mangling of the English language, as when he said “Rarely is the question asked, is our children learning?”

What got mostly overlooked was that he had a point - though his proposed solution, the unfunded mandates of No Child Left Behind, was woefully inadequate. Too few people still ask if our children are learning, and too little is being done to find out why they aren’t learning enough.

Many conservatives instinctively say this is a failure of the public education system, often blame teacher unions, and call for more charter schools. Liberals tend to blame our educational failures on not spending enough money on public schools.

But there is now some evidence that the real problem may be something else again - though something that is money-related. Our children are simply not spending enough days in school.

They not only spend fewer days in school than kids in other industrialized nations, they spend fewer than their older brothers and sisters did just a decade ago. And they, and this state, and society, are suffering, and will suffer more in coming years.

I know this, thanks to a timely study commissioned by the Center for Michigan, Phil Power’s non-partisan, non-profit “think and do tank,” dedicated to improving the quality of life in this state.

The study, called “School Days: Michigan’s Shrinking School Year,“ shocked me. Nationwide, the standard requirement in most places is a minimum of 180 days of classes. That many days had been legally required for years, and I thought still were.

Think again. Ninety-eight percent of Michigan schools offer fewer than 180 days of classes. One district, Republic-Michigamme in the Upper Peninsula, only held classes 139 days.

How can this be? Six years ago, the legislature dropped the requirement that classes be held at least 180 days in favor of a minimum classroom time requirement, which is 1,098 hours.

When that happened, many districts began lengthening the school day to save money. Essentially, Lansing allowed them to shorten the school year by making each school day longer.

That approach might work fine for putting fenders on cars. It makes no sense here. Lessons take a measured, structured module of time. We are shortchanging our children, and shortchanging ourselves and our future. Michigan has fewer young adults with college educations than nearby states - or the national average.

We need to keep kids in the classroom more, rather than fewer, days, if we are to win the jobs of the future. Yes, that will cost money and some hardships. But it is essential. To quote Charlie Ballard, Michigan’s leading economist, “As a society, we’ve got to find a way to do this,” he said, adding, “I don’t know why this isn’t on the radar.”

What we need to do now is put it on the radar. If you want to learn more, and to see how your district is doing, go on line to thecenterformichigan.net, find the report, and check things out.

And then call your local legislator and go get mad.

Essay: Taxing Concerns - 3.18.09

Governor Granholm said yesterday that she would support a graduated state income tax. Her support would be in return for eliminating the much-criticized surcharge in the Michigan Business Tax. Michigan Radio’s Senior Political Analyst Jack Lessenberry thinks a graduated income tax would be a good thing for the state.

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Michigan’s tax system is a mess, and it is largely the politicians’ fault. That’s something on which Republicans and Democrats, liberals and conservatives can all agree.

The more you know about it, the more you know how messed up it is. Last month, Paul Courant, an economist and dean of libraries at the University of Michigan, said that thanks to what we’ve done to the Michigan Business Tax, we’ve managed to create a state that is inhospitable to both labor and capital.

He seemed to have meant that partly as a joke, but he wasn’t far wrong. Immediately after enacting the tax in 2007, lawmakers slapped a 22 percent surcharge on it because they didn’t have the guts to balance the budget any other way.

Can you say, please don’t bring your business to our state?

The personal income tax situation isn’t much better.

Our current constitution provides for a flat-rate income tax. Lawmakers can change the tax rate, and have often done so.

But they cannot make it a graduated tax, one where people with smaller incomes pay proportionally less. In order to make that happen, we would have to amend the state constitution.

Things are set up that way because a large majority of the delegates who wrote our current constitution back in 1961 and 62 were Republicans. They didn’t want a tax that severely penalized those better off. Incidentally, back then the federal income tax took a far greater proportion of higher incomes than it does today.

Over time, we have evolved a system where our income tax really socks it to the poor. They pay a rate among the highest in the nation. Meanwhile, the rate the very richest pay is among the lowest in the nation. Lately, this has become more indecent - and bad for state revenues - because virtually all the income growth in recent years has gone to the richest Americans, the upper one percent.

But there may be a way to fix this which would at the same time make our state more competitive and business-friendly. Charles Ballard, a professor of economics at Michigan State, probably understands our state’s economy better than anyone.

He is now seriously proposing getting rid of the Michigan Business Tax altogether - and replacing it with a graduated income tax, that we would first amend the state constitution to allow.

He calculates that by putting in a graduated state income tax with a top rate of 7.9 percent, we could replace all the revenue we get now from our current income and business taxes.

Or, we could keep some drastically reduced portion of the Michigan Business Tax, which would be my preference, and set the top rate for the income tax a little lower.

There is a lot in Ballard’s proposal for both Republicans and Democrats to like, and we should hope the legislature takes it under serious consideration. We have to do something; our system now is badly broken, and getting worse every year. That ticking clock is an economic time bomb, and we simply can’t afford not to change.

Interview: The Week in Politics - 3.18.09

Every Wednesday morning, Michigan Radio's Morning Edition Host Christina Shockley discusses state politics with Michigan Radio's Senior Political Analyst Jack Lessenberry. Today, they talk about the possibility of a graduated state income tax and proposed cuts to the state budget.

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