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Governor Gretchen Whitmer could be leaving office with a sluggish economy and her successor (whoever that is) could take credit for a bounceback.
The University of Michigan’s Research Seminar in Quantitative Economics (yep, that’s a mouthful) released its widely watched and respected economic forecasts this week portending a bumpy short-term future for the state’s economy. The RSQE academically describes it as “a short-term pause.” That “pause” would time neatly with the 2026 election cycle.
And when would this pause lift? If the projection holds, sometime in 2027, early in the first term of the yet-to-be-selected lucky new governor.
Two things worth mentioning about this new projection. First, it does not go so far as to predict a full-blown recession and, second, it plainly states there are questions regarding its reliability.
One of the issues is that the federal government shutdown robbed prognosticators of months of critical data.
“So, there’s a little bit of flying blind here,” RSQE Director Gabriel Ehrlich told Rick. “We are still missing substantial amounts of data and the reality is some of the data we will never get back just because the government was shut down.”
That federal data can’t be replaced because universities and think tanks that do their own analyses don’t have the capacity to gather the amount and quality of information that the government does. Also, those organizations check their work against the federal data, which is considered the gold standard. The state relies on that same information to come up with its economic data, including the Michigan employment numbers.
Compounding the uncertainty is the market chaos caused by federal tariff policies.
“In the past, we've said that the administration's tariff policy would cost jobs in Michigan's auto sector,” Ehrlich said. “We do think some recent changes in tariff policy have helped there.” But we’re still in the early stages of watching how this will play out.
One of Rick’s favorite presentations at this week’s RSQE conference was how French winemakers adjusted their alcohol content to get around U.S. tariff policies. Another wrinkle might be how big retailers with a wide variety of inventory could spread the costs of tariffs across taxed and untaxed products, creating an invisible cost to consumers.
So looking ahead, political candidates and campaigns next year will throw around a lot of cause-and-effect arguments about the economy and who made what happen. Consumer alert: The truth will be a lot harder to discern than glib campaign claims.
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Have questions about Michigan politics? Or, just want to let us know what you want more of (less of?) in the newsletter? We always want to hear from you! Shoot us an email at politics@michiganpublic.org!
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What we’re talking about at the dinner table
Slotkin responds: Michigan U.S. Senator Elissa Slotkin is in national headlines again this week courtesy of President Donald Trump. He appeared to threaten Slotkin and five other Democratic lawmakers with national security or military backgrounds with the death penalty. Their “crime” was a video posted on social media reminding military personnel that by law they should refuse to obey illegal orders from superiors. “Don’t give up the ship,” Slotkin said in the recording. Trump called the post sedition, which is a crime “punishable by DEATH.” Slotkin replied in a second post, “I’m not going to be forced away from speaking up on behalf of my country.”
Addressing secrecy: The Republican-led state House has passed legislation that would allow lawmakers and many other state elected officials to shield their home addresses from the public. Lawmakers say threats and instances of violence and harassment have made it necessary to expand the privacy zone around elected officials. Opponents of the legislation say it would make it easier for legislators to skirt the state constitutional residency requirements to reside in their districts. The bills head next to the Democrat-led Senate.
Oversight subpoena standoff: Secretary of State Jocelyn Benson’s legal team filed a reply to the Michigan House Republican lawsuit alleging she is stonewalling their legislative oversight efforts. The GOP-led House Oversight Committee has subpoenaed the Secretary of State for materials used to manage elections. Benson, a Democrat seeking her party’s nomination for governor, says her office has turned over much of what the committee is seeking. The reply filed in the Michigan Court of Claims argues Benson’s office is required to vet the material to ensure election security is not compromised. Meantime, we spent some time on the podcast this week talking about another escalation in tensions between GOP lawmakers and Benson as a group of Republican legislators sent a letter asking U.S. Attorney General Pam Bondi, a Trump appointee, to order federal oversight of the Michigan elections next year.
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We’ll be taking some down time next week (and so will the IJP newsletter) but we look forward to reconnecting with you after the Thanksgiving holiday! (How about at our next Issues & Ale! We’d love to see you there!)
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Yours in political nerdiness,
Rick Pluta & Zoe Clark
Co-hosts, It’s Just Politics
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