Unknown Speaker 0:00
Welcome to stage two, the state, the monthly roundup of policy and research for the state of Michigan, brought to you by the Institute for Public Policy and Social Research at Michigan State University. And the good folks at Wk our studios. I'm Arnold weinfeld, Associate Director for the Institute. And I'm joined by MSU economist, Dr. Charlie Ballard, and Institute director, Dr. Matt Grossman. Gentlemen, always a pleasure to be with you. Later on, we'll be joined by Dr. Gioconda Thomas, a associate professor and Ms. US Department of Political Science, whose research focuses on political violence, how violence influences conflict resolution, and the determinants of the successful peace process. items that are no doubt on the minds of many Americans today. But first, surely, there's a few other issues floating around out there, the economy, the pandemic, we had some good news this past week, Michigan held its consensus revenue estimating conference, which of course includes house and senate fiscal agencies, as well as the Department of Treasury. And lo and behold, even though we are still no prediction is still 2% below revenues from where we should be. It's not nearly as bad as we thought back in May. Can you talk a bit about what's happened since you know, we first held that consensus revenue estimating conference in the spring? Where we were the you know, it was all doom and gloom $2 billion deficits in the light? And what kind of recovery are we experiencing? You know, people back then talked about a ve years who's really seems to be more of a roller coaster than anything else.

Unknown Speaker 1:43
Yeah, the drop in the economy in Michigan, and everywhere else, was more dramatic in April 2020. Than then really, by many measures, April 2020, was the worst month in American economic history. We previously thought that the 100,000 jobs lost in Michigan in January of 2009, was really horrendous. In April of 2020, we lost 10 times as many we lost about a million jobs, and then there and so when the revenue estimators and by the way, let's not make let's not, I'm not going to be criticizing them, when the some of their estimates were off. These are people who are doing their very best under difficult circumstances. When they met in May, things looked really dire. And then we have had a halfway decent recovery from that fall in Michigan. And in most of the United States, we've made recovered about half of the jobs that were lost and a substantial amount of the economic activity that was lost. I think there's a couple things going on. One is the federal government has stepped up and has relieved the burdens in many ways. Another is that we have learned lots of businesses have been able to continue to operate better than maybe we first thought in an online in a remote environment. Nevertheless, that and so so that the good news is that the budgetary situation for Michigan is not nearly as bad as we once thought. The not so good news is that the recovery appears to have stalled out. We don't have the December jobs numbers for Michigan yet, but the November jobs numbers, the recovery in employment, reversed. We lost jobs in November, and for the nation as a whole. Job growth was very flat in October and November. And then we lost jobs in December so difficult for winter months, though, too, isn't it fairly. But these are seasonally adjusted numbers. Yes, it is typically true that we lose jobs in in the winter month. I mentioned earlier that we lost 100,000 in January of 2009. It that was after seasonal adjustment. If you just look at the raw data, we lost a quarter of a million jobs in that month. So you're right. But these numbers are adjusted to take into account the normal variations that

Unknown Speaker 4:10
happen over the over the year. And you mentioned the impact of federal stimulus packages. There have been two or three I'm starting to lose count here. And certainly President Biden is put another one on the table. This one of a higher amount and with a two state and local governments as well. How long can we keep doing this? And we keep injecting federal money into the economy?

Unknown Speaker 4:44
Well, that's a that's a good question. And I do. I like to say a kind of an on the one hand and on the other hand on the one hand. I think this is not yet the time to worry about balancing our budget because our economy is still in deep trouble. On the other hand, you know, the deficit federal deficit for the fiscal year that ended last September was more than $3 trillion. And now the total accumulated debt is is pushing toward $22 trillion with a tea. So far the world credit markets seem happy to gobble up that debt with. And we don't have to pay very high interest rates, I do worry that there will eventually be a day of reckoning. And so I, I hope that once we get past the worst of the COVID crisis, which I think we may well be able to do that by by the summer to have made a lot of progress, then it will be time to have a serious national discussion for the first time in a long time about maybe paying our bills. In the I think that the tax cuts that were passed three years ago, were absolutely wrongheaded, because introductory macroeconomics tells you that you should balance your budget or run surpluses when the economy is good, leaving some room for deficits when the economy is struggling. But, um, the tax cuts that went into effect three years ago, they meant that we were running trillion a year even when the economy was doing well. So that that is, that's a concern, but I feel like I'm a kind of a lonely Voice in the Wilderness when I say that, because in order to deal with it, you're gonna have to cut some spending, or you're gonna have to raise some taxes. And there's a lot of people who are in Congress who have pledged not to do one of those things. Well, man,

Unknown Speaker 6:47
let's let's talk about your thoughts on this. And I'd like you to also reflect on since the events of January 6. Corporate America has seemingly taken a different tact with its philosophy on donation, even the Detroit Regional Chamber yesterday came out with an announcement that they were going to be reviewing those elected officials and candidates for office moving forward, based on the language that they use. As Charlie noted, many of our congressional representatives in our own state legislators have taken no tax pledges still come from a very conservative fiscal viewpoint. How is that going to match up? moving forward?

Unknown Speaker 7:37
Well, versus too early to say on the donation patterns. This is right after an election is not usually a high time for corporate Pac donations, many of the businesses that have made announcements have just said they're not making donations for the next six months, they're doing some kind of pause. And overall, actually, the data shows that corporate donations tend to moderate representatives, it's actually the individual contributions that are more likely to lead to more extreme representatives. So it's not clear that that those patterns are really going to change our polarized landscape.

Unknown Speaker 8:17
individual donations, you know, you're talking about folks like the Koch brothers or the boss or Soros in particular?

Unknown Speaker 8:24
Well, no, it's actually mostly small donors. The small donors are the ones that are most associated with the most extreme representatives. And so it might look like, you know, the the corporate class is, you know, is helping to move the Republican Party rightward. But if you think about it, those are mostly access oriented donors, rather than ideological donors. And so they tend not to be the ones that are associated with the most extreme representatives. I just real quickly on the stimulus, just wanna make sure everybody understands that although state and local government funding wasn't directly included in the December stimulus, Michigan is still vastly helped in its state government by that stimulus package. Not only is money that is for health and education, likely to be fungible, and the state budget as it was almost entirely in the last state budget. But we also benefit in terms of revenues from those, you know, higher unemployment benefits from checks going to individuals, and so that those stimulus packages before really helped to alleviate the what would have been big pain in the state budget. And going forward. If we do get to that point that Charlie mentioned, where we start to see if not austerity, at least a turning off of the hose of federal money, you know, we are likely to have postponed that potential pain in the state budget rather than gotten rid of it completely.

Unknown Speaker 9:56
And now what's your view moving forward of How Democrats and Republicans may or may not work more closely here in Michigan, the balance of power did not shift at all. But in Congress, it did actually, as evidenced by not just the election of Joe Biden, the Democrat. But in a year when everyone thought democrats would pick up seats in the House and the Senate, the house got tighter, Democrats have less majority there. And lo and behold, they Now technically hold the majority in the Senate. How do you think this is all going to work out? Even in light of the events of January sixth? Has there been any kind of a shock to the system to cause people to want to work together more?

Unknown Speaker 10:42
Well, it doesn't seem like it's so far. You know, we're a couple days after the inauguration, and already, there's a dispute about even how to form the Senate Committees. So and there's there's no evidence that there's Republican support for, for example, any of the initial legislative proposals that Biden put forward, either the immigration one or the stimulus proposal. And so there's a lot of talk about unity. But most of that was about, you know, being unified in values or against extremism, or maybe toning down the culture war, there's not really a whole lot of sign that there's going to be bipartisanship when it comes to public policy. Democrats, you know, do now have full control. And there are a lot of people are going to want to use that full control to enact a lot of policies. We also know that the party out of the presidency tends to win the midterm election. And so they are going to see this as sort of a fleeting chance that they have to potentially enact new policies. Now at the state level, research shows that the party out of power in Washington is more likely to move their states more ideologically in the opposite direction. So we will be looking for republican states to actually move rightward under the Biden administration, while Congress tries to take advantage of its couple years with Democrats in the majority.

Unknown Speaker 12:16
So gentlemen, it seems that despite everyone's enthusiasm, for turning the calendar to 2021, and obviously many enthusiastic about Neil, watch of Joe Biden, and Democrats in control 2021 might look very similar to 2020. In terms of the politics and the economy, the impact of the pandemic, would you say,

Unknown Speaker 12:45
I think 2020 one's going to be better than 2020. But that's setting the bar really low. And I do think it's very good chance that we will have you know, it certainly the the Trump administration never really took fighting COVID very seriously, they viewed it as a public relations problem, not a public health problem, Biden,

Unknown Speaker 13:12
I

Unknown Speaker 13:14
it will be difficult for them not to do better, I think there's a decent chance that we will speed up the shots in arms rapidly. And but since you know, there's still bottlenecks in the system, I think it's probably summer or fall before we really start seeing major progress. And then it will take many months to kind of put the economy together. So most economists say that 2021 will still be a rocky year, and maybe we can look to 2022, to getting back to an economic, more normal. So again, that roller coaster, when

Unknown Speaker 13:54
it came to policymaking, actually 2020 was a fairly bipartisan year, we had three major stimulus packages supported by both parties at the federal government. At the state level, we had a surprisingly on polarized budget discussion, as well. So there was a lot of noise and a lot of, of course, bad news in health and economy. But in terms of policymaking process, some of that bad news actually focus energy toward actually getting a few things done.

Unknown Speaker 14:30
But most of those, as you noted, Matt, were on the budget side. I'm not sure that we saw any other deep policy changes across the board, say in health care, or other other issue areas,

Unknown Speaker 14:46
did we Well, we're about to learn because of the the budget reconciliation process, which is the main way that move party party majorities in the senate can pass legislation that a whole lot can be put into the budget category. And already, we saw a pretty major energy bill, the party's actually negotiated an energy bill and just stuck it in the stimulus package in in December. There are already efforts to include expansion of Obamacare benefits into this stimulus bill. There's efforts to include a big transportation funding and alternative energy funding into the next stimulus bill. So, you know, I wouldn't I wouldn't poopoo that just budget because we're about to find out that almost everything has enough budgetary impact to be included in those bills. So

Unknown Speaker 15:39
that's probably true. on the federal level, I'm not so sure that, you know, on the state level, we're able to do that. But that is an interesting point you make Matt and one that I think our audience if they're not aware of needs to be aware of that how policymaking efforts have shifted at the federal level through ruin to the budget process. Yes.

Unknown Speaker 16:03
They have a partially because of those rules, but also partially just because, you know, we focus a lot on social issues and cultural concerns and in the campaign, but the actual business of government is mostly economic policy. And most of the issues that we talk about have big budgetary implications, and that means that they can be discussed in the budget context as well.

Unknown Speaker 16:27
Well, speaking of the campaign in politics, Matt, why don't you go ahead and introduce our next guest, a colleague of yours, from the Department of Political Science? Dr. Buchanan.

Unknown Speaker 16:39
Yes, I'm pleased that Gioconda Thomas is with us my colleague and Associate Professor of Political Science and an international expert on terrorism, and violence. Gioconda was part of our department forum, which is visible online, where we had people in comparative politics and international relations discussing the events of the Capitol on January 6. And she also has a new piece out at the conversation about dealing with this, these recent events, Jakarta, you want to get us started? By talking about what your big points were there about how we should see the attack on the capital? In international context? Yes, for sure. Thank

Unknown Speaker 17:21
you for having me. On. So last week, my colleagues and I discussed the events of the Capitol from a comparative perspective. And our point was really that America is not really the only country to encounter many of these same problems. And so are what we set out to do was figure out what we can learn from the rest of the world, about these events, and the potential broader employment impacts of these events on our political system. So just broadly, the broad takeaway, or the four main takeaways from that conversation were that this looked very much like post election violence that we witnessed around the world and other countries. And post election violence occurs often when people distrust the electoral process, or they're unhappy with the outcome, and so they engage in violence. But what's a key point, a key point of focus here that I'll come back to in a minute is a lack of trust in the institutions and specifically in electoral process. My other colleague, Erica Fonz mentioned that what we saw on display on January 6, again, is consistent with democratic backsliding. And this is kind of where you see a democratic state sliding closer and closer toward autocracy very slowly. other colleagues said that this is indeed very clear indicators of maybe some deep seated trouble ahead for the United States. And some of the key factors that are going to cause some of this problem, these problems are the gross economic inequality and the growing polarization in our politics that we've been talking about a little bit today. And these can cause or lead to democratic erosion and breakdown. So one thing that my colleagues did suggest is that there, the events of January 6, were not necessarily a death knell to our democracy. It's not that this is a sign that our country is dying. However, it is a sign that there were some broader problems. And one of the problems that I really brought up and that I focused on a lot in my research, is the growing extremism and the growing radicalization that has led to violence in our country. That was the kind of violence that was on display on January 6. So some of those factors like polarization and inequality, they breed grievances, that can fuel political violence, they can allow political entrepreneurs, to seize this moment and say, Look, we have a crisis that we have to solve that our government cannot solve. So one of the biggest things that I think Michigan really needs to focus on and look at is this growing radicalization among the population that's kind of fueled and supported by militia activity around the Midwest and around the country more broadly. So groups like the three percenters, the oathkeepers, the proud boys, these are concerning organizations and we know this because at least One 3% was involved in the plot to kidnap our governor. And recently, the oathkeepers have been implicated as the or have been suspected as helping to orchestrate these particular events that we saw in the capital. So, one thing that I think is important to note is that these right wing militias that we're seeing cropping up and that have been around the oathkeepers, and the three percenters have been around since 2008, and 2009. They're not just harmless patriot groups that are protecting the Constitution. But they're actually challenging our authority and the threaten the democracy. So the forum, really, we propose some things that we can do. And I think a couple of the really important ones are that politicians have to somehow restore faith in our institutions, right? They have to come back this erosion of trust in our electoral process and the institutions more broadly. And I think one, one freshman Congressman, Peter Meyer recently came out to denounce the violence. And he's been trying to restore the faith in the process. And I thought he said a couple of really interesting things. Um, he mentioned that it was really important to help us move past this point, that, you know, we have accountability for what happened, but also that politicians start to tell their constituents the truth, so not just to tell them what they want to hear, not necessarily just tell them what's politically expedient, but tell them the truth. And to some degree, the truth that's important that would help combat some of this growing radicalization. And this growing extremism is that our Constitution is not being undermined by government actors. Our elections are safe and secure. For the most part, our institutions are not beyond repair. And that means that people can continue to participate in participatory democracy in order to see real changes. And most importantly, for me is we do not need non state actors like these militia groups to protect the government from its citizens or to protect the government from itself. Right. And I think a particularly troubling sign is after Meyer came out,

Unknown Speaker 22:01
suggesting accountability, he's had to buy body armor and change his security routine because of this threat of violence. And so I think one thing that we really have to do is acknowledge that this is a problem that our country has, it was not an isolated event, right? January 6, is not the last time we're going to see violence. In fact, we saw violence just yesterday from the other side, at the DNC headquarters in Portland. And so, you know, it's really important that we acknowledge that that was not just a fleeting moment, January 6, was not an aberration. This is potentially a sign of what might be coming if we don't take seriously the fact that we have armed non state actors roaming the country and for the most part going unchallenged.

Unknown Speaker 22:44
And can you talk about the the lessons from international examples for sort of what we saw of the mix of motives and actors at the Capitol, because you've mentioned, obviously, some of the most extreme armed elements, but we also had just a whole bunch of people just show up, who were just Trump supporters, who thought that they were going to the Capitol, on on his behalf. Some of them, you know, will still be obviously held accountable for entering the Capitol, but some of them were just protesting on on the outside. And obviously, afterwards, we had a lot of security at the Capitol and at state capitals, and did not see a whole lot of large crowds to go along with with the few militia people. So what are the kind of examples and lessons from from trying to acknowledge those non violent protesters and to sort of separate them from the radicalization that we saw at the Capitol?

Unknown Speaker 23:41
Right? So there are a couple of really important points that I'd like to pull out. So there were multiple instances of political violence, or politics on display or contentious politics, right. So we did see violent riots which are important to condemn and to come, or I guess, to approach with the full force of the law. But at the same time, we also saw organized peaceful protests. And those two things coexist. And at the same time, we saw terrorism, those three things, you know, coexisted at the same time. And it's really important to treat those actors separately, acknowledged the things that motivated all of them, and that some of those motivations might be somewhat common, but to actually acknowledge that those were different sets of actors, and the repercussions are different, right? We cannot come out forcefully and just denounce all the protesters quash all right wing speech and protest, because it happened to coincide with violence, because that just kind of feeds into this radicalization loop in this radicalization process. And so what we know from around the world is that government repression, and it doesn't necessarily just have to be violent repression, but it can be repression of people's civil liberties is one key reason people become radicalized and take up extremist politics and take up violence. So in order to avoid turning some of those peaceful protests, Esther's into violent extremist in the future, we have to make sure that we don't just crack down on their ideas and their beliefs and their speech just because we don't like it. But recognize that just because they were there, and just because they had may have contrary beliefs, they're not necessarily complicit and guilty. However, those who are complicit and guilty of engaging in actual violence, engaging insurrection, the government has a responsibility to crack down on those actors in order to deter further violence in the future. But again, lessons from around the country suggests that we can't treat those sets of actors the same, right, we can't treat the peaceful protesters, as if they were rioters. And this is a job for law enforcement, they're going to have to do a really good job of discriminating between those who are actually violent, and actually, you know, planning and orchestrating these violent events, or those who participated in the violent riots, and those who were just out to protest peacefully, because they're not the same. And as you mentioned, there are underlying grievances that have kind of sparked people's anger that need to be acknowledged, right. And some of these things are about legitimate, like, you know, economic inequality, or the fact that people are hurting economically, some of this is brought on by COVID. But some of this has been around for a really long time. And this can be dealt with by actually governing right, by responding to people's, I guess, the grievances that they have the violence, though, I mean, that may I think these grievances allow violent actors to then appeal to people who otherwise would not be violence, right? These, these grievances make people make these political entrepreneurs say, a these problems that you're facing are beyond what the government can control and change. They're not interested in doing this. We, however, have the unique solution. And the solution is to take over the government, right? As long as the government continues to ignore that the people who came out to protest might have some legitimate grievances toward the government. They allow these actors, violent actors to kind of recruit right. Another concern is that, like, I guess another concern here is that these violent actors are also feeding them lies that some of the politicians are also feeding them. And they're making this they're painting a picture of a country that is not actually our country, right? They're painting this picture of a country where people can't go out and vote for their politicians anymore, because elections are meaningless. They're painting a picture that there is no point in participating in the institution, there's no point in running for office anymore, because you can't actually change things from those institutions. And it's also important for government actors, and specifically, the ones that that contingent trust to come out and say, like, PETA Meyer did that, that this is just not what's happening, right? Like, this is just not the truth. The institutions are still what they've always been, they're still safe, they're still secure, you can still participate, you can still change the balance in Congress, you can still change the local political landscape by participating in politics, this is not your only option. And it's very important that people see that there are other options out here other than violence.

Unknown Speaker 28:12
So you mentioned some legitimate grievances. There were, of course, also, signs of white supremacist groups and long running are racial and racist and Nazi imagery associated with some of the protesters. But it wasn't quite Charlottesville, and it's kind of over overwhelming display. But I know that there must be international examples of racial group conflict, ethnic group conflict, which often coincides with with political conflicts. So what can we sort of learn from from those in thinking about the role of racial politics in this?

Unknown Speaker 28:52
Yeah, so that's a that's a great question. And I think there's some been some really interesting research on ethnic violence and ethnic politics that would say that these cleavages become salient. When political actors make some salient right. These are cleavages that always exist, that can coexist. But when you have a political actor that comes in, you know, fabricates this conflict, people who are on these different lines are likely to buy into it, right. Unfortunately, political actors and trusted elites have a big role in stoking this violence, and also quelling this violence as well. So around the world, we see often that there is ethnic conflict. But we also see Is there a lot of people in countries where there's huge ethnic mixes, maybe where there were histories of contention that can figure out how to live coexist peacefully. And so just because we have this polarization doesn't mean that it necessarily has to lead to conflict. But it only does when we allow politicians to kind of Stoke these tensions along these dividing lines, right? That when they make These issues salient. And so if we could find a way to make these issues less salient, they'll never go away, you know, they're not going to go away in our country, but they may not play such a primary role in our politics. And so I guess one of the things that we we can do, which sounds very naive, but is returned to just civility, right, return to politics of respecting other people that have different beliefs that are different than you and and believe that they have a right to exist, right, they have a right to be in this country as well and have contrary opinions. And we can disagree without going to war, right, that it is possible for us to do that in this country. And I think we're hearing this rhetoric, but that is not possible, right? It is not possible to coexist with these different viewpoints. But that's just not accurate, right? Or issues of like the rest of the world has kind of been contending with these kind of issues. And I've had to figure out a way to do that.

Unknown Speaker 30:58
So yeah, I don't we're doing our part by returning to boring budgetary politics and civility. And we I just want to mention that Gioconda Thomas both has the video from the forum that's online that will link to also has a new piece in the conversation. If you want to read more. And our Michigan political leadership program, co chairs actually have a new piece in the city pulse on civility in our politics, that also hits on some of these themes, and maybe some solutions that we can look to going forward.

Unknown Speaker 31:33
Thanks, Matt, and many thanks to you to kind of greatly appreciate this conversation. I think it's one that we'll be needing to have over and over again. And I look forward to it after being a catalyst and connector to having these kinds of conversations with folks such as yourself that dive in deep into these issues. Charlie, anything else that you'd like to add before we close? Well, I

Unknown Speaker 32:04
think this has been a really, really good discussion. It will be very interesting to watch in the years, and not just in the weeks and months, but in the years to come to see whether the polarization in our country accelerates or whether we can pull it back? I think that's a that's an unanswered question. I'm glad that we have people like Jakarta Thomas, looking closely at these issues. And I guess I would say that our I think our democracy is I'm cautiously optimistic that our democracy is sufficiently robust that we'll, we'll get past this too.

Unknown Speaker 32:49
Well, I do try and remind people when I've been in these conversations, that on January 6, in other countries, martial law would have been declared institution shut down. And the fact of the matter is, is that after a few hours of Mayhem and insurrection, our body of government got back to work. Two weeks later this week, we had an inauguration. So to me, there are differences already to be optimistic about Charlie and Chicana. And Matt, thank you all for being here with us. And our thanks again to Russ white, and the staff here Wk er for their support of this program. Join us again next month on state of the state

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