MACKINAC ISLAND -- This year, the atmosphere was a little different. The Detroit Regional Chamber of Commerce's annual policy conference featured some interesting themes, to put it mildly.

Bottom line from those in the know: Business and labor haven't exactly distinguished themselves. But our elected leaders have really led the league in failing to get the job done.

That's a rough consensus based on conversations with dozens of the 1,500 or so real and self-proclaimed movers and shakers who crowded onto the island last week.

If there was anything that especially roused their ire, it was the state legislature's last-minute "balanced budget."

The kindest reaction to it might be characterized as mere disdain. Others openly held it in outright contempt. One retired chief financial officer a major Michigan corporation had one word to describe what lawmakers said they had achieved: "Fraud."

The man added heatedly that if his company had resorted to the kind of accounting hocus-pocus practiced by those running our government in Lansing, the company would be in deep legal doo-doo with the federal Securities and Exchange Commission.

Others, reflecting on efforts by former State Rep. Leon Drolet (R-Clinton Township) to recall any legislator who votes for a tax increase, also recommended recall - of the entire legislature!

Nor are the folks at Mackinac alone.

A survey by Brogan & Partners, a Birmingham-based marketing firm, found responders gave business and union leaders a "C", while elected leaders got a "D+."

When asked which "one group has been the biggest obstacle in helping turn Michigan's economy around?" a solid 56 percent majority gave our elected leaders the lion's share of the blame.

One thing is beyond argument: The big losers in the budget were our seedbeds of the future, Michigan's community colleges and universities. They saw not only state support cut, but cash payments they expected this summer deferred until at least October.

The college presidents I talked with could only shake their heads as they contemplated Lansing's preferences in spending priorities for the very short run as opposed to the long term.

When they considered how our lawmakers have behaved thus far, many on the Grand Hotel's big porch openly questioned whether the legislature will have the stomach to make the tough decisions needed when it comes to tackling the nearly $2 billion deficit looming ahead for the fiscal year that starts this October 1.

Many suggested that a crisis of confidence was brewing throughout the state's entire political culture. Some argued that the time has come to fix the legislative tilt toward inexperience by linking an end to term limits to making the legislature part-time.

No agreement on that seemed in sight. But there were two bright spots at the conference:

* For the first time in memory, big labor was invited to this particular table. Teamsters President James Hoffa and United Auto Workers chief Ron Gettelfinger both received polite responses to their calls for business and labor to cooperate to help Michigan through its time of crisis. Arguing that "you don't have to be anti-employer to be pro-union," Gettelfinger stressed how important it is for management and labor to collaborate to achieve a "high performance workplace."

* And support seemed to be solidifying for the "aerotropolis," the proposal for a massive development zone framed between Detroit Metropolitan Airport on the east and Willow Run on the west. Detroit Renaissance head Doug Rothwell called the project "possibly the single most important economic development project in Michigan." Business heavyweight and Walbridge Aldinger CEO John Rakolta is heading a high-profile, private- public support panel charged with making it happen. Experts praised the combination of air, road, rail and water logistical resources the development could command as among the world's best.

"The aerotropolis will form," said Prof. John Casarda, an expert in airport- driven economic development. "The only question is whether it will happen haphazardly or in a coordinated, planned way."

As for Michigan's elected leaders -- the top brass, from Gov. Jennifer Granholm to Senate Majority Leader Mike Bishop (R-Rochester) and House Speaker Andy Dillon (D-Redford Township) argued (somewhat defensively) that the 2007 budget deal is only the first step in getting Michigan's financial house in order.

The governor pointed out that "a crisis is a terrible thing to waste" in urging all sides to come together to move Michigan forward.

Well, she's right about that. And maybe our top leaders will find ways to focus on our long term economic health by putting together three main initiatives: spending cuts, structural reforms in the organization and cost of government at all levels, and a tax increase.

Virtually everybody I talked with on Mackinac Island agreed some combination of those factors is the obvious policy solution to the state's ills. But virtually nobody was optimistic that would really happen. And that huge disconnect is, in a nutshell, what's wrong with politics and government in Michigan today.

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Phil Power is a longtime observer of politics, economics and education issues in Michigan. He would be pleased to hear from readers at ppower@hcnnet.com. Phil Power is president of the Center for Michigan. However, these opinions and others expressed in Phil Power's columns are individual opinions and do not in any way represent official policy positions of the Center for Michigan.