Crain's Detroit Business - Mackinac Section - June 7, 2010 - (Page 5)

June 7, 2010 CRAIN’S DETROIT BUSINESS Page M5 2010 Mackinac Policy Conference A time for action Newt Gingrich: Give Detroit businesses 10-year tax holiday BY TOM HENDERSON CRAIN’S DETROIT BUSINESS MACKINAC ISLAND — The Legislature should make Detroit a citywide enterprise zone and give its businesses a 10-year tax holiday, Newt Gingrich, the former speaker of the U.S. House, said during his keynote address Wednesday night at the Detroit Regional Chamber’s 30th annual Mackinac Policy Conference. “Let’s pretend Detroit is Puer- Gingrich to Rico for 10 years,” he said, adding that the city generates so few taxes now, after years of decline, that his suggested tax holiday wouldn’t be much of a gamble. “It’s a large enough solution, it begins to meet the problem. Since 1968, there have been lots of small solutions that haven’t addressed the problem,” Gingrich told an overflow crowd at The Grand Hotel, pointing out that Detroit has gone from having the highest per capita income in the U.S. in 1950 to “something like 67th today.” The highlights of his talk, judged by crowd reaction, were his suggestions, also wide ranging, for improving health care and education and rejuvenating Michigan’s and U.S.’s manufacturing prowess. They included: Michigan could jump start its recovery by, Plan A, making the state a right-to-work state. “Nothing would change investment in the state faster. But if that’s too big to take on, go to Plan B: Just apply it to public employees.” If Michigan wants to educate and train the hundreds of thousands of workers it will need to successfully compete against China and India, it needs to “think of 24/7 online, on-demand totally new model of education that uses technology. Get rid of textbooks. Give students Kindles. You can give them Kindles cheaper than giving them textbooks, and they can be continually updated.” He used the College of the Ozarks in Missouri as a model of what could work in Detroit. The college accepts only students who qualify for student assistance, but doesn’t offer any. Instead, students are put to work on campus and most of them, Gingrich said, graduate debt-free. “Take the poorest neighborhood in Detroit and put a work college right there and say, ‘Don’t tell me you can’t afford to go to school, because it’s free. You just have to work.’ I’m a big believer in work.” Traditional public schools don’t work because they are regimented. Students are expected to fit a schedule, instead of teachers fitting instruction around individual needs. A renowned physicist can teach at Stanford if he or she has a Ph.D., but can’t teach at Palo Alto High School because of union work rules. He said communities are filled with accountants and pharmacists who would love to teach one hour a day, and do a better job of it, in many cases, than teachers who are teaching classes because they have a certificate and not because they have any real expertise. “Look at the percentage of physics teachers who don’t know physics,” he said. One way to improve school performance in central cities could be to reward parents. “If you told parents, ‘If your kids show up for school reading and writing, we’ll give you $6,000,’ you might be shocked how many parents suddenly care about learning.” What doesn’t work, he said, is continuing to “encourage kids to get a letter grade, which the middle class understands but no one in their neighborhood cares about.” Forget worrying about Toyota. “I believe unequivocally that the only benchmark is China. You better be the highest-quality, lowest-cost producer on the planet. If you create that situation in Michigan, jobs will flow back in.” That would require large solutions. The current focus on small solutions might, he said, make Michigan competitive with Illinois “but not even with Indiana and certainly not with China.” Another Chinese lesson? The U.S. should have a capital gains rate of zero. “China has zero capital gains. Can you imagine how many factories we’d build if we had zero capital gains?” If the city of Detroit or Oakland County were serious about re- ducing employments costs, officials there could hold a reverse auction the next time a government job opens up. “People would bid to do it for half the price.” He disagreed with federal legislators about extending unemployment to 99 weeks. “I’d be much happier if they’d extended jobs.” He said studies show that people generally get serious about finding employment about four weeks before their unemployment runs out. He said the Obama health care plan is destined for failure. “It was an interesting argument. The Democrats had the House and the Senate. Fine. But it will fail. … With the government failures in the Gulf and at the border, why would you entrust the government with health care?” Gingrich told the audience that state leaders still needed to decide if they wanted to take the steps needed for real change, or just continue to give it lip service. “Real change is hard. It’s full of conflict. It’s difficult,” he said. “But this is about real change, or it’s about baloney.” Tom Henderson: (313) 446-0337, thenderson@crain.com For more than a century, Fairmont Hotels & Resorts has brought people face to face for legendary meetings in unforgettable settings. Whether you’re looking to make history or simply to offer your clients an unrivaled experience, trust Fairmont to deliver seamless service, state-of-the-art meeting spaces and top value—making your work that much easier. ov e r a c e n t u ry o f l e g e n da ry m e e t in g s Fairmont Heliopolis & Towers, Cairo World War II Conferences of the Allies at Fairmont Le Château Frontenac, Québec, 1943–1944 John Lennon and Yoko Ono’s Bed-in for Peace at Fairmont The Queen Elizabeth, Montréal, 1969 G7 International Economic Summit at Fairmont Le Château Montebello, Québec, 1981 http://www.fairmont.com http://www.fairmont.com

Table of Contents for the Digital Edition of Crain's Detroit Business - Mackinac Section - June 7, 2010

Crain's Detroit Business - Mackinac Section - June 7, 2010
In this Issue
Economic Makeover
Lesson Plan for Education Reform
Teaming Up for Action
Time for a Cultural Revolution
Defense Mechanism
Slowing the State's Brain Drain
Intern, Employers of the Year

Crain's Detroit Business - Mackinac Section - June 7, 2010