[Photo of Michael D. LaFaive]

Michael D. LaFaive

Director of the Morey Fiscal Policy Initiative

Michael LaFaive is director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy, where he has worked since 1995.

He is the author or co-author of hundreds of essays, commentaries and blog posts and 12 studies on fiscal policy topics as varied as local and state privatization efforts, corporate welfare, school finance, state budgeting and cigarette taxes.

Among his studies is the Mackinac Center for Public Policy’s largest, a nearly 200-page state budget analysis that recommended more than 200 ideas for trimming some $2 billion from the state budget without cutting Medicaid or School Aid funding. Many ideas first presented by LaFaive in 2003 have been adopted or adapted by lawmakers in Lansing.

He is also the originator of the Center’s annual school privatization survey, which routinely garners a 100 percent response rates from districts. There is no database of competitive contracting like it in the United States. In addition to this product, LaFaive authored in 2001 a 26-page, full-color edition of Michigan Privatization Report specifically dedicated to fixing Detroit. The ideas in that publication are more relevant today than when it was published.

LaFaive is perhaps best known, however, for his cutting-edge, scholarly work examining state “economic development” programs. His studies and frequent commentaries on this topic have garnered him a national, if not international reputation as a respected government development critic and were probably influential in the decision to kill the Michigan Economic Growth Authority, the state’s high-profile corporate welfare program. 

LaFaive has been interviewed more than 1,300 times by the media in the last ten years. He is typically interviewed more than 125 times a year by members of the press seeking comment on fiscal issues and remains a popular public speaker.

He has undergraduate and graduate degrees in economics from Central Michigan University.

LaFaive is married and resides in Midland, MI.

'Live Free or Die' State Chooses 'Die'

New Hampshire’s inspiring state motto is a tribute to individualism, but it shines a bit less brightly today after the state offered to guarantee part of a “loan” to an ailing newspaper. That’s a mistake, and if the “Live Free or Die” state has any doubt they should look to the record of the Great Lake state. … more

Inspiration or Desperation?

A recent Detroit Free Press editorial too easily dismisses Gov. Jennifer Granholm's now infamous 2006 quip, "you'll be blown away" ("Granholm an unfortunate victim of her own words," Nov. 11). They did so by truncating the full sentence and arguing that it was simply "delivered as an inspiration." … more

MEGA Tax Credits Are Not Without Cost

Last August, the Mackinac Center released a study critical of the Michigan Economic Growth Authority. This was the second of two rigorous analyses of MEGA by the Center, and both found that - at best - the program has had no net positive job creation impact. Indeed, the latest results suggest that the program may actually destroy jobs. Not surprisingly MEGA apologists have bristled, and when compelled to respond, have done so with what could charitably be called a series of untruths about the program. … more

MEDC Untruths Reveal Political Nature of 'Jobs' Department

The Mackinac Center's recent analysis of the Michigan Economic Development Corp. elicited some misleading or erroneous responses from MEDC officials. Although the MEDC is supposed to be about economic development, its true mission is political, and so its pronouncements should be viewed with the same skepticism as ones from politicians. … more

Dancing With the Government

When you "dance with government," be prepared to get stepped on. … more

Health Savings Accounts Can Save Michigan Money

MEGA Stories

Michigan Economic Development Corporation CEO Greg Main boasted that he "would invite (critics) to take a look at the results (of the MEGA targeted tax break program)." We did. Twice. In depth and detail. We found that - at best - MEGA creates no new jobs, and on balance it may even destroy them on a net basis. Further, only 29 percent of the direct jobs promised by its deals ever happened. To date, the MEDC has not refuted a single point of fact, or produced independent, systematic evidence that its approach does squat to create jobs, increase state incomes or expand our economy. … more

"Slashing" Economic Development Staff? Please Sir, Can We Have Some More?

The Michigan Economic Development Corporation — the lead agency in a statewide "economic development" empire — is arguably the most ineffective, least necessary department in state government. Shrinkage of the agency's staff is good news; staff levels reaching zero would be excellent news! Alas, declines reported by a recent Detroit News article aren't quite what they appear to be. … more

Jobs Braggadocio

The Granholm Administration wasted no time after the Michigan Economic Growth Authority monthly rubber-stamp board meeting on Tuesday to start pumping out press releases bragging that more than 2,800 new jobs were coming to Michigan as a result of selective tax break deals for the latest gaggle of "winner" firms and projects. The MEGA-related jobs claims should be discounted by 71 percent, based on a recent Mackinac Center study that found only 29 percent of the jobs promised by past MEGA deals actually happened. … more

How Big Is Michigan's Government, Really?

The Detroit News on Saturday published an article in which reporter Ron French compiled various indicators to suggest that Michigan state government is smaller now than at the start of this decade (“Michigan’s shrinking government”). Actually, gross state spending during this decade rose a modest 3.4 percent after adjusting for inflation, while the state's economy shrunk by 3.3 percent. … more

Is it The Wall Street Journal or The Onion?

This week, The Wall Street Journal published another critical examination of Michigan's political leadership, economy and budget. In a delicious irony, the online version posted a Michigan Economic Development Corp. advertisement featuring actor Jeff Daniels alongside the piece. … more

Mississippi Not Burning

Gov. Jennifer Granholm took a gratuitous swipe at the state of Mississippi. The Mackinac Center takes a nuanced look at the Magnolia State's fortunes. … more

How to Fix Michigan? Cut Cost of Living, Working and Investing Here

On Oct. 9, 2009, Michael LaFaive, director of the Mackinac Center's Morey Fiscal Policy Initiative, spoke at the invitation of Rep. Justin Amash, R-Kentwood, at an "Economic Town Hall" meeting convened by the representative. Here's what he told the participants: When I was first asked to participate here I was a bit taken back by the specificity of Representative Amash's request. He said, "Mike, my constituents have endured nearly a decade of bad news. I want you to tell them what we're doing right. Give them the good news." So, in conclusion let me say ...Obviously, I am joking but at the same time, I am not joking. … more

Come Fly With Me: Will Detroit City Airport Get Dose of Fiscal Sanity?

Detroit Mayor Dave Bing has recommended outsourcing the management of the Coleman A. Young International Airport to save money, as recommended by the Mackinac Center back in 1998. When we did so the city had recently provided the airport with a $1.9 million subsidy. In 2007 (the latest year for which data is available), the subsidy was down to $900,000, but the city's ability to afford any subsidy has collapsed altogether. At this point, the city should investigate just completely unloading the airport with an outright sale. … more

A Rebuttal to the MEDC's Wall Street Journal Letter Part III

Yesterday, I published the second part of this essay, which uses an MEDC letter-to-the-editor in the Wall Street Journal to illustrate the agency's pattern of using illegitimate rhetorical devices in response to serious critiques, including distractions, irrelevancies and non sequiturs. Part I was published Wednesday. Here's third and final part: … more

The Coming $50 Billion Budget Battle

The state is currently wrestling with how to close a $2.8 billion budget deficit for fiscal year 2010. Some of the proposed cuts to state spending are significant and debate over them may be holding up completion of the budget, which must be passed by midnight Sept. 30 to avoid a government shutdown. … more

Tourism Subsidy Beneficiaries Chant on Capitol Steps: "Gimme! Gimme! Gimme!"

Actually we don't know what they chanted, but MIRS News reported that that tourism-related business officials did demonstrate in front of the Capitol yesteray, protesting a proposed cut to the state's "Pure Michigan" advertising campaign.Here's a concept for them: If ad campaigns like Pure Michigan are really such a success, why don't the hotels that benefit from this taxpayer largesse pay for it themselves? That the tourist industry's members refuse to do so speaks volumes about the program's real value. … more

A Rebuttal to the MEDC's Wall Street Journal Letter Part II

Yesterday, I published the first part of this essay illustrating how an MEDC letter-to-the-editor responding to a critical Wall Street Journal editorial illustrates the agency's pattern of using illegitimate rhetorical devices to avoid responding to the substance of serious critiques, including distractions, irrelevancies and non sequiturs. Here is the second part of the essay, deconstructing other statements in MEDC CEO Greg Main's letter. … more

A Rebuttal to MEDC Letter in The Wall Street Journal

On Sept. 4, The Wall Street Journal published an editorial titled “The Michigan Example,” excoriating the state’s reliance on government central planning to “create” jobs, rather than undertake genuine overall business climate reform. The editorial was based in part on research published a few days earlier by myself and James Hohman. … more

Michigan Sets Another Dubious Record

Data released last Friday by the federal Bureau of Labor Statistics showed that for the second month this year, Michigan was burdened with an unemployment rate exceeding that of Puerto Rico. Michigan’s rate was 15.2 percent while Puerto Rico’s stood at 15.1 percent. … more

Green Jobs Fad Means More Government Intervention

The Michigan Economic Development Corp., state Legislature, governor and other supporters of government “jobs” programs have adopted an almost pop-culture idolatry for all things environmental by showering taxpayer subsidies upon corporations claiming to bring purportedly “earth friendly” products to market. It has a shiny, new green paint job, but in fact this is just the latest in a long line of failed state economic development program fads. … more

MEDC Should Become Transparent — or Disappear

Trick, or Treat

The Michigan Legislature is this morning taking up House Bill 5275, a bill that authorizes a Michigan Economic Growth Authority business tax credit deal for a battery cell manufacturing facility. … more

The Michigan Economic Development Corporation: A Review and Analysis

Video by Kathy Hoesktra, Mackinac Center communications specialist … more

MEGA, the MEDC and the Loss of Sunshine

Transparent Failures

Flawed MSU Film Subsidy Report Misleads Taxpayers

Transparent Failures

School Service Privatization: Survey 2008 Map

The State of the State You Should Have Heard

MichiGONE: New Migration Data Dark and Portentous

State of Crisis

School Privatization Grows Again (Revised Version)

Where There’s Smoke, There’s Smuggling

Cigarette Smuggling Rampant in Michigan

Collecting the Rent

Point of Departure

Requiem for Reason

Cigarette Taxes and Smuggling

In this study, the authors consider cigarette smuggling from two angles. First, they employ a statistical model to estimate the degree to which cigarette smuggling occurs in 47 of the 48 contiguous U.S. states. Second, they review the historical experiences of three states — Michigan, New Jersey and California — known to have problems with cigarette smuggling. The author's findings suggest that state policymakers should reassess the value of cigarette taxes as a revenue and public health tool. … more

Collecting the "Rent"

American Greetings Says Hello to More Incentives

Policymakers are quick to issue press releases about how many jobs will be created when they give discriminatory favors to certain businesses. Where are the press releases when those predictions fall short? … more

MEGA Stumble?

Requiem for Reason

Creative Charlatanry 2.0

The “Scene” and the Unseen

State Works at Cross Purposes

Playing Carnac with the Future

Survey 2008: School Service Privatization Grows Again

Done right, school support service privatization can save money and improve services — even if the privatization option is used solely to persuade public employee bargaining units to sharpen their pencils. … more

UVL Data, Migration Study Underscore Michigan Troubles

The Mackinac Center has long recommended a “Big Three” of tide-turning policies: Eliminate the Michigan Business Tax, prohibit employers from mandating union membership as a condition of employment and rein in oppressive regulation. … more

Latest Economic Numbers Confirm Failure of Status Quo

The question that apologists for the status quo have failed to answer is why investors and job providers increasingly avoid Michigan. … more

Privatization Rolls on Despite Rhetorical Opposition

Privatization Rolls on Despite Rhetorical Opposition (Viewpoint on Public Issues)

Since our last survey, media reports from around the state indicate that additional schools are using privatization to yield savings. … more

A Taxing Question (revised version)

Martin “Marty” Wing: Rest in Peace

MEDC Rejects Development Bird-in-the-Hand

As long as the MEDC exists it should do one thing noticeably well to help facilitate job creation: advance right-to-work legislation. … more

State Should Adopt Health Savings Accounts

Across Michigan, institutions such as businesses, government, nonprofit organizations and unions are or have attempted to revise the way they address skyrocketing health care costs. … more

Privatization Review a Mixed Bag

Special Automotive Interests

The Wizard of Oz Has No Clothes

The answer is simple: Politicians don’t care about job creation as much as they care about the perception of it. … more

A Taxing Question

The Unvarnished State of the State

Someone once said that politicians will do the right thing, but only after they have exhausted every other option. Michigan may have reached that point. … more

Automotive Production Expands – Elsewhere

Michigan has carefully built and continues to maintain a culture of decline that is overtly hostile to outsiders and fearful of their competition. … more

A Flawed Argument for Higher State Taxes

A Really Gross Domestic Product

Relying on Private Agencies has Track Record of Saving Money

Migration Trends, Indiana Campaign Show Need for Policy Changes in Michigan

Indeed, if the state’s economic landscape doesn’t change soon it may need to change its official motto from “If you seek a pleasant peninsula, look about you” to “If you seek a pleasant peninsula, move to Florida.” … more

Norval K. “Nub” Morey: In Memoriam

Survey 2007: School Support Service Privatization Rises

Competitive contracting continues to be a popular management tool for improving services and for saving money, which can then be reinvested into classrooms. All indications are that it will continue to grow in popularity. … more

Survey 2007: More Growth in School Support Service Privatization

Privatization is a time-tested management tool used by governments around the world. It can take many forms, but competitive contracting is the most prevalent in the United States whether in municipalities or within the realm of public education. In some regards, Michigan is a national leader in competitive contracting in education; in other areas it is a laggard. … more

School Support Service Privatization: Getting it Right

Done right, privatization remains an effective management tool for school districts across Michigan. … more

A School Privatization Primer

A Michigan School Money Primer

State Excise Tax Promises More Job Losses

Renaissance Center Brought No Renaissance

Despite all of the glitz and lofty rhetoric associated with major building projects, people continue to flee the city. … more

Another Kind of Tax

Déjà Vu All Over Again

What Price Government?

Lights Out?

Survey 2006: School Outsourcing Continues to Grow

Pontiac Should Sell City Assets

Arrest Municipal Police Costs

Suppress Municipal Fire Costs

Around the State 2006-02