About Jerry Zandstra: Where I Stand
We are in a fight for our economic way of life. This election is about our economy. It’s about our jobs and our future. This is where Senator Stabenow is most vulnerable. And this is a fight our great state cannot afford to lose.
Economic Issues
The economic challenge facing Michigan is the most significant issue in the 2006 United States Senate race. Economic strength—the central concern of consumers, business owners and labor—is where Senator Stabenow is most vulnerable.
The best economic policy benefits three groups: consumers, employers and employees. Balance between employers and employees must be maintained. Consumers drive the system, seeking the best products at the best price. Employers work with employees to meet the needs of the consumer. Policy that favors either employers or employees creates imbalance and our economy falters. When consumers’ needs are not met, we lose jobs. I call this approach to economic policy Tripod Economics.
Each leg of Tripod Economics is vital. If too much emphasis is placed on any one leg, we lose jobs. Consider the recent situation with Delphi. Because of labor union contracts, Delphi paid $1.6 billion annually to people in job banks for whom it had no work. No business can survive such enormous costs for no work. Delphi’s bankruptcy was caused largely by a policy that made its continuation as a business tenuous. Delphi’s failure is neither good for consumers, nor for employers. And it certainly isn’t good for employees.
In Tripod Economics, labor isn’t the enemy of management, and management isn’t the enemy of labor. They actually have the same enemy—the collapse of their business. Labor needs to begin asking if it is well served by unions that operate on a Marxist idea of class warfare. An “us against them” mentality is damaging to everyone.
Recently, General Motors and the United Auto Workers appeared together in court, something they’ve done many times. This court appearance was unusual, though, because they were united in purpose, trying to make GM a viable business in the coming decades. This is Tripod Economics at its best—labor and management working together to provide an affordable, high-quality product for consumers.
We can turn Michigan’s economy around if we put Tripod Economics to work for us. To do this, we need senators and congressmen who understand the effect public policy has on our business climate.
Not that long ago, Detroit was one of the world’s leading cities. Manufacturing in Michigan outpaced that of whole nations. We were known for hard work, creativity and a driving entrepreneurial spirit. We were a state of meritocracy.
Presently, Michigan’s unemployment rate is 40% higher than the national average. Detroit is known as the most impoverished city in the United States. Seventy percent of business leaders believe that Michigan is on the wrong track and that our business climate is getting worse. The Tripod of consumers, employers and employees is out of balance.
We usually lay the blame or credit for Michigan’s economy at the feet of our Governor and certainly Jennifer Granholm deserves her share of the blame for our economic crisis. For this reason, we need to elect Dick DeVos to the governor’s office. But Senator Stabenow must shoulder her share of responsibility for Michigan leading the nation in unemployment.
Many of the economic challenges we face are the direct result of bad federal economic policy. In her voting record, Senator Stabenow has repeatedly demonstrated that her true interests lie with ultra-liberal organizations like the pro-abortion group Emily’s List, trial lawyer lobbyists and MoveOn.org. Her central concern has not been the hard-working people of Michigan. Instead, she panders to unions to the detriment of consumers, employers and employees.
Former Governor John Engler points out that the cost of manufacturing in the U.S. is 22.4% higher than that of our 9 closest international trading partners. Manufacturers are at an economic disadvantage, not due to labor costs, but because of our tax structure, our health care costs, our excessive regulations and our legal structure. In a state where only a small part of the economy was manufacturing, this would be of small concern. But 76% of Michigan’s economy is tied to manufacturing. This is a problem at the federal level.
1. Tax Structure
President Bush’s tax cuts need to be made permanent. We need lower taxes. Most Republicans agree with this. But we need to look deeper.
Before we pay one cent in taxes to the IRS, we spend up to $500 BILLION each year simply preparing to pay our taxes, trying to slog our way through a tax code that is in desperate need of complete overhaul. It isn’t simply that we need to pay lower taxes, although this would be a welcomed relief for Michigan’s businesses and families. We need to change the way we pay taxes. Our current tax law fails Tripod Economics. It damages consumers, employers and employees.
I am backing the Fair Tax concept for several reasons. It is transparent. Few of us know exactly how much in taxes we pay because most taxes are taken from our paychecks before we receive our wages or built into the cost of everything we buy. Simply lowering or flattening our tax structure isn’t enough. What is lowered or flattened by one session of congress can be raised by the next. The Fair Tax concept makes it clear how much in taxes we actually pay. Our government demands transparency from our nation’s businesses. We should demand the same transparency from our government. The Fair Tax also has the support of the Small Business Association of Michigan. The Small Business Association of Michigan (SBAM) is a statewide trade association organized for the exclusive intent and concern of small business in Michigan. SBAM provides leadership in the promotion of free enterprise and other common interests of small businesses in Michigan.
2. Legal System
Tort law is the part of our legal system intended to ensure that when one’s negligence harms another, the person injured is compensated for their loss. In Tripod Economics, tort law insures the protection of consumers’ rights and freedoms.
Unfortunately, our tort system has been abused. In the worst cases, some trial lawyers bundle as many complaints together as possible, accuse as many as possible, and hope that the insurance companies will be willing to settle out of court in response to this form of legal extortion. In doing so, they use the pain of others to maximize their returns.
The cost of tort abuse is harmful to Tripod Economics. Consumers pay higher prices, employers have fewer resources to expand their businesses and create jobs, and employees have fewer job opportunities. Everyone loses, except a handful of trial lawyers and the people they represent.
Abuse of the tort system adds 2% to the cost of everything we manufacture, putting Michigan at a competitive disadvantage in the international market. For many companies, this is one-third of net profit. Increased exposure to tort liability has also significantly impacted the medical system, dramatically increasing costs and limiting access to medical care in some locations.
On February 10, 2005, Senator Debbie Stabenow had the opportunity to take the first step toward tort reform in a bill that came before the Senate. She could have stood for justice and for needed reform. She should have given serious consideration to the damage tort law abuse does to Michigan’s economy. Even Barrack Obama, one of the newest and most liberal members of the Senate, voted for the reform bill, along with 17 other Democrats. The bill had broad bi-partisan support and would undoubtedly benefit our nation, yet Senator Stabenow voted against it. At best, the senator doesn’t understand how her votes impact Michigan’s consumers, employers and employees.
3. Health Care
Our health care costs are sapping the strength of our economy. The recent bankruptcy of Delphi and the challenges our automakers face have focused our attention on health care. Again, the three legs of Tripod Economics are out of balance.
According to Senator Stabenow’s speech in April at the Detroit Economic Club, 31% of health care costs are administrative overhead. Senator Stabenow wants to nationalize health care, but this is not a viable solution. Consumers will have fewer choices and longer waits for medical treatment, and employers and employees will see an even higher percentage of their resources going to medical care. This is legacy of the Canadian system, which consumes 40% of Canada’s Gross Domestic Product and provides year-long waiting periods for something as common a hip replacement.
Bringing anything from the private sector into the federal bureaucracy only increases waste and inefficiency. The real solution is an increase in competition among health care providers. Competition drives out inefficiencies and reduces administrative overhead.
Five percent of health care cases make up 50% of our health care costs. Most of these costs go toward conditions that are preventable through a more disciplined life style addressing obesity, heart disease and diabetes. Our personal behavior is driving some of our businesses into bankruptcy. We can prevent superfluous health care costs by tying health to economic self-interest.
Let’s say that your share of the health insurance offered by your employer is $200 per month. Your employer knows that healthier employees have fewer sick days and are more productive and so decides to offer you an opportunity to lower your monthly expense by providing free, optional screening for you and your family. You may choose to continue to pay the monthly $200. However, if you instead accept the screening, your blood pressure, cholesterol, body mass and heart rate will be tested. If you lower these indicators to a set level, your $200 monthly cost would decrease to $100. If you bring them into the medically acceptable ranges, your costs would drop to $0 per month.
Unfortunately, because of the current HIPPA regulations, this kind of incentive system is in violation of federal law. These regulations are harmful to consumers, employers and employees.
4. Education
Michigan schools have many dedicated teachers and involved parents. For Tripod Economics to work, we need well-educated consumers, employers and employees, especially in the face of global competition. In one school district I visited recently, 91% of students entering their freshmen year actually graduated. This is encouraging.-
Unfortunately, this is not the case in all school districts. In some of our urban areas, about one half of students do not graduate from high school. As a result, in certain communities over one-third of the people we meet on the streets are functionally illiterate. The ensuing costs to our society are enormous. Forty percent (40%)of people receiving cash assistance from the state have a GED or lower. Seventy-three (73%) percent of our prison population has a GED or no diploma at all.
At the base of a successful school system are involved and passionate parents. Without this base, no amount of money, training or curriculum revision will change the educational outcome. Parents are responsible for the education of their children and no government program can defer this fact. A friend of mine teaching in one Michigan inner-city school told me that when she held parent-teacher conferences for her 18 students, no parents showed up.
Parents need to get involved. Only a quarter of Michigan parents think their kids need a college education. Only 3% see engineering and math as a path to success for their kids. China graduates 500,000 engineers each year. The days of graduating from high school and getting a job in the auto industry at $120,000 are over. Labor and manufacturing will continue to dominate our economy for the foreseeable future. But the labor needed now must be skilled. High school has to be supplemented with additional time at trade schools, tech schools, associate degree programs, bachelor degree programs and graduate institutions. Global competition demands a highly educated workforce.
All of this begins in elementary school. Failure there means failure all the way up the chain. For parents, choice and responsibility are tied to each other. The more choice we have, the more responsibility we take for our decisions, and as our responsibility increases, so will our demand for increased choice. In policy terms, this means the expansion of the educational choices we have for our children.
In addition to expanded choices, our schools need structural changes. Just as competition makes things more efficient and effective in business, competition will improve the performance of our school systems. Teachers unions should have a vital interest in performance-based pay, accountability and the removal of poorly-performing teachers. As in Tripod Economics, the parents (consumers), teachers (labor) and school districts (employers) are not the enemies of each other. They have the same enemy—failure to prepare Michigan students for economic reality and the opportunities they will one day face.
We need to experiment with performance-based pay. An interesting scenario took place recently in Little Rock, Arkansas. Teachers voted to introduce a performance-based system. They were paid a base salary that was enhanced by comparing the test scores of their students at the beginning of the year with their test scores at the end of the year. The money for the performance pay was privately donated. The teachers were pleased with the system, the parents were happy and, most importantly, the performance of the students was higher than it had ever been. Everyone won.
Social Issues
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I am Pro-Life and I will do everything I can to defend the lives and dignity of our most vulnerable citizens, from the yet-to-be born to those about to die. I look forward to being endorsed by Pro-Life organizations in Michigan and around the United States.
I will defend our Second Amendment rights and continue to enjoy them, as I have for the past 20 years. The Michigan Coalition of Responsible Gun Owners has endorsed my candidacy for United States Senate. Please read my interview with the MCRGO leadership.
I will vote for a strong military and better pay for those who serve in it.
I will vote to defend our national borders. Legal and controlled immigration is vital to our economy and part of our national identity. Illegal immigration poses both an enormous cost and a threat to our society and our security. We have the technology and the ability to defend our borders. At present, the only thing we lack is the political fortitude.
I support the Michigan Civil Rights Initiative, which seeks to remove the discriminatory practices of our public institutions. I believe in meritocracy, not in pandering.
