The Michigan experiment

Common Cause Magazine, Spring, 1994 by Peter Overby

Cut taxes! Throw the deadbeats off welfare! Take control of the schools! All this and more--or is that less?

CADILLAC, DODGE, FORD AND OLDSMOBILE all debuted innovative models this winter at the North American International Auto Show in Detroit. As more than 600,000 visitors and 3,500 journalists traipsed through, workers quickly buffed fingerprints off the high-gloss sheetmetal that embodies the Michigan vision for America.

Outside, Michigan was struggling with a different future. In the state where assembly-line wages used to lift blue-collar families into prosperity every day, tomorrow now comes in two models.

The first version embraced Lawrence Reed. In 1987, recruited as president of a fledgling nonprofit, he chose to set up shop in Midland, a small city situated near the index-finger knuckle on the Michigan mitt. Reed's organization, the Mackinac Center, is in an old department store; neighbors include an antiques store and cappuccino shop.

Mackinac uses computers, phones and faxes to espouse an upbeat free-market philosophy that reflects Midland itself: Government is inconspicuous, and benevolent corporations, in Midland's case the hometown Dow Corp., meet many civic needs. Reed, 40, an economics professor with a youthful grin, will argue for example that government has no business helping the needy.

"I think the private sector ought to be doing it and can do it better," says Reed, clearly a person excited by ideas. "One of the things it can do that no social service bureaucracy can do is provide the one-on-one mentoring, the character building, the spiritual content of renewing a person's life."

The second future has arrived in the basement of the armory-sized Salvation Army building in Pontiac, 80 miles southeast of Midland. The room has tables, chairs and, on one wood-paneled wall, a large velvet rendition of the Last Supper. After the religious service one frigid morning, Kelly Bell arrives and announces matter-of-factly that he's losing his apartment.

Bell is a few months younger than Reed and works cooking carry-out chicken. Bell used to be on General Assistance, a state program that sent checks ($160 a month at the end) to childless, "able-bodied" adults who were unemployed or working in low-wage jobs. When GA covered the rent, he kept one apartment for five years. But GA, the last chance for many welfare recipients, was abolished in October 1991.

Now Bell moves around. This most recent place lasted three months; his roommate suddenly left, and his paycheck alone can't pay the rent. It's not much above zero outside, and even indoors Bell keeps his jacket zipped and a knit cap pulled low as he talks.

He says he first went on General Assistance at age 19, four years after being thrown out of the house by his father, a General Motors worker with an alcohol problem. He collected GA or worked (sometimes both) for 17 years. He expects to stay in a rescue mission this night.

"It put a lot of people out there who shouldn't be out," Bell says of the welfare cutoff. "Some guys I know are paying their rent with food stamps," which is illegal.

Pushing Michigan into this dichotomous future is a stocky, fast-talking, unlikely leader.

Gov. John Engler, 45, became a fulltime politician in his senior year of college, when he wrote a class paper describing how to beat an incumbent state legislator and then put it into action. A native of the central Michigan farm country, he often seems cold and impersonal in public. He went to the statehouse in Lansing as a Republican pragmatist. But by the 1990 gubernatorial campaign, Engler was singing from a passionately conservative hymnal composed by, among others, Lawrence Reed. Blaming government for Michigan's ills, he said Lansing should just lower taxes, stand back and let the entrepreneurs go full-throttle. Despite the state's big-labor, big-government reputation, Engler ambushed two-term Democratic incumbent James Blanchard in a 17,595-vote upset.

Voters, Engler declared, "are tired of the same old crap going on in Lansing."

LBO IN LANSING

While Washington is busy reinventing government, Engler is intent on de-inventing it. His administration is like a radical expression of the free market he so admires: specifically, an outside takeover. Like a leveraged-buyout buccaneer, he parlayed his thin victory into an unprecedented shake-out of state government, its budget and mission. He whacked away at two departments; shuttered a third; froze civil service pay; closed what he considered a costly, unproductive line (General Assistance); and announced plans to contract out or simply sell some other government operations.

The Mackinac Center calls it "the Engler Revolution." Indeed, his policies closely reflect the Mackinac agenda -- not surprising, since he helped to launch the center (see "Just Good Friends, Really," page 12).

Engler is a New Republican, often mentioned with governors Tommy Thompson of Wisconsin and William Weld of Massachusetts as GOP leaders who endorse free-market solutions to social problems and sidestep the fractious social issues that crippled the GOP in 1992. They were glorified by columnists Rowland Evans and Robert Novak in Reader's Digest as "Three Who Dare" to fight "entrenched defenders of the status quo," and their approach has been embraced by new governors Christine Whitman of New Jersey and George Allen Jr. of Virginia.