Governor: Heads I Win, Tails You Lose on Job Projections

Gongwer News Service (subscription required) reports that Gov. Jennifer Granholm is unhappy that a new economic forecast estimates that Michigan will start adding jobs next year. It reports:

Ms. Granholm aired some probably only partially mock frustration with a University of Michigan report released this week that showed the state would see 23,000 net new jobs in 2011 and 60,200 net new jobs in 2012.

"The bummer for me is that date," she said, noting the job growth would begin the year after she leaves office. The state has seen only net job losses during her term.

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The Governor takes a "heads I win, tails you lose" approach to the economy: she claims that all of the state's problems are a result of the struggling auto industry or of globalization while any positives are a result of her economic development programs. But crediting those programs for improving the job estimates is an injudicious use of the forecasts since the economic estimates cited have been optimistic.

The University of Michigan estimates consistently forecast that economic growth will happen in the following year. This is not necessarily the fault of the economists at Michigan — economic forecasting is notoriously unreliable. But they ought not be treated as gospel truth.

For instance, in 2002, the Michigan economists made this prediction:

"Our view is that we are not out of the woods quite yet, but we will be soon. The Michigan economy continues to shed jobs at the beginning of 2003, but that will be the low point. By the spring of 2003, we expect employment to be growing, albeit modestly."

The state lost 71,100 jobs from 2002 to 2003.

In 2005, they forecast:

"By 2006, the economy gathers sufficient momentum to add 60,000 jobs, growing at a pace similar to its long-term rate over the past 25 years. Although the pattern of recovery is mild by historical standards, it does represent a welcome reversal of the past several years."

The state lost 63,300 jobs from 2005 to 2006.

If the Governor wants to take credit for meeting next year's economic projections, she should also accept blame for failing to meet projections during her tenure.

The state may be on a path to growth this year. There are encouraging signs. But when Michigan turns around, it will be because the entrepreneurs, business owners and employees in Michigan found ways to better serve their customers. The Governor can take no credit for that.