Politics & Policy

Taxing Michigan

How McCain gets away with it

Detroit, Mich. Many election observers — including Roy Cordato on National Review Online Thursday — are puzzled as to why John McCain’s green, anti-industry politics don’t hurt him as the campaign moves into struggling rust belt states like Michigan.

The reason is two-fold. First, politicians like McCain calculate that punishing producers with backdoor taxes keep the costs hidden from consumers. Though less effective than changing consumer behavior with direct taxation, mandates give the impression that politicians are being pro-active on the environment. They are right, and the public’s enthusiastic embrace of Washington environmental regulation — including in Michigan’s embrace of it — has been their reward.

Second, thanks to some fundamental economic shifts, McCain’s success is a testament to the shift in political power from industry to environmentalists.

McCain’s Michigan paradox is a striking example of the power of green in America today. McCain is Al Gore in an elephant suit — a global-warming true believer who has battled the U.S. auto industry for years over draconian fuel mileage (so-called CAFÉ) mandates.

Yet McCain won the Michigan presidential primary over his auto-friendly opponent, George Bush, in 2000 and is poised to do the same this year, this time over Mitt Romney, the son of a Michigan auto executive and a vocal critic of Big Three-bashing.

McCain, together with Democrat John Kerry, were initial co-sponsors of the 35 mpg (so-called CAFÉ) mandate that just passed Congress — legislation that economists predict will cost the domestic auto industry $85 billion over a decade and impact thousands of jobs. No matter. Steve Mitchell, a longtime Michigan pollster, says this legislative activism had a negligible effect on Kerry’s campaign as he beat Bush in Michigan in 2004.

The same can be said of McCain’s campaign here this week.

While industrial unions (like the United Auto Workers) are a traditional Democrat base, they have taken a backseat to greens in a party increasingly represented by blue, coastal states like Kerry’s Massachusetts and Nancy Pelosi’s California. After all, Kerry’s recent book — This Moment on Earth — is not about resurrecting industrial unions.

As the UAW declines, so does its influence on politics. UAW chief Ron Gettelfinger sat shoulder-to-shoulder last year with Big Three executives opposing Washington’s energy bill mandates. Not only did it not sway assembled pols, but some representatives publicly bragged about owning Toyota hybrids.

Furthermore, Michigan is hardly united for the auto industry. The state’s biggest newspaper, reflecting Detroit’s monolithically liberal media bias towards high taxes and green politics, backed McCain this week. Nowhere in its endorsement did the paper note that McCain is the most hostile candidate to the state’s biggest industry. Nowhere did it mention that 30 years of CAFÉ laws have cost Michigan workers thousands of jobs.

McCain will now wave that endorsement before rallies in Detroit’s liberal, green, soccer-mom suburbs and liberal university towns like Ann Arbor and Lansing, where voters will drive their massive SUVs to the polls to save the planet.

McCain’s cap-and trade legislation to reduce global warming gases, criticized by economist Cordato, will likely be similarly embraced. Opaque to consumers, it will cast industry as thwarting progress towards a greener, more environmentally-friendly future. Michigan’s nuclear-powered utilities will lobby for it, seeing business advantages in its structure.

The bill will do little to slow greenhouse gases, will increase Michigan’s already uncompetitive costs of doing business, and will reward John McCain politically for “doing something” about the environment.

– Henry Payne is a writer and editorial cartoonist for the Detroit News.


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