California Will Be Bankrupt Before General Motors

Turkey was once known as "the sick man of Europe." Michigan fills a similar role in the minds of many Americans, a basket case of a state on the edge of a financial precipice. This has been the popular view of Michigan for at least 20 years, since Michael Moore's "documentary" Roger and Me portrayed Flint as devastated by GM's efforts to modernize the giant automaker.

Michigan's image is that of an economic disaster zone, filled with decaying cities, greedy unions, stupid companies, and general incompetence. Many city and county governments are distressed financially, and the business climate is, to say the least, not improving. The city of Detroit is deeply in the red, has failing schools, and has the highest unemployment and poverty rates in the country; entire swatches of the city are turning into urban prairie with foxes, coyotes, and other fauna. Among conservatives particularly, the state's image is that of a solid blue Democratic bastion of high business taxes and intransigent unions, whose businesses now want to violate free market principles instead of failing according to capitalism's theory of creative destruction. Political liberals with their environmental sympathies aren't much friendlier. During the recent congressional hearings on aiding the automakers, both sides of the aisle got their licks in.

The truth is that despite the doom and gloom Michigan is a well-run state, financially and otherwise. Republicans have held the governor's mansion for 32 years out of the past 45 years, and if Michigan conservatives and libertarians hadn't supported term limits John Engler would still be governor. Republican George Romney, Mitt's father, was the driving force in rewriting Michigan's constitution, which has required a balanced budget for the state since 1963. Regardless of which party is in power in Lansing they have to be fiscally responsible with the state's books.