In a speech broadcast live Friday on WWJ Newsradio 950,  Governor Jennifer Granholm asked a standing-room only crowd at the Mackinac Policy Conference to help her on three initiatives: pulling together a skilled and educated workforce; diversifying our state's economy; and lowering the cost of government.

The Governor talked about where we are at specifically in each of the areas and said lawmakers must pass a renewable energy portfolio standard to create more jobs in alternative energy in Michigan.

"We have an opportunity to seize this moment.  That package will do a whole lot of things, but for me the most important part of that is the job creation and adding a whole new sector," the Governor said.  "America's energy problem is our economic opportunity." 

Listen to the Governor's speech:

Part 1, click here.

Part 2, click here.

Granholm began by reviewing Michigan's economic challenge -- the loss of 330,000 manufacturing jobs since 2000 as part of a national flight of manufacturing jobs overseas, and Big Three market share falling from 70 percent in 1990 to 45 percent today.

But she also pointed to dozens of big investments in the state in recent years by companies in her targeted areas of alternative energy, the life sciences, advanced manufacturing and homeland security. And she touted her continuing overseas investment missions, especially alternative energy efforts in Sweden.

She proposed a "21st Century School Fund" to create 100 small, academically challenging high schools across the state.

Granholm said the small high school plan is part of an overall effort to "attack, declare war, on the dropout problem." She said Michigan "must replace those large, impersonal high schools that fail with small, challenging high schools that work." She also backed more "middle colleges," five-year high schools that graduate their students with an associate's degree or other usable career credential. She said the 21st Century Schools Fund would require no new taxes, only a redirection of existing revenue.

More broadly, Granholm said of education, the state needs to flip education on its head to meet the needs of employers. "We don't want people to get degrees in French or political science," she said. "Those are my degrees, so I can say that. We want people to get degrees in areas we need," such as health care.

Granholm also asked -- as she did last year -- for the renewable energy standard, which has been tied up in the Legislature over complaints that it remonopolizes the state's electric market, and doesn't go far enough to mandate renewable energy.

However, Granholm said the lack of the standard means Michigan is losing out on massive investments that are occurring elsewhere in renewable energy.

Granholm also touted her record as a cost-cutter, pointing out that she's cut more out of state budgets than any Michigan governor in history, that Michigan is now 46th in state employees per capita, and that the state is leading the nation in putting state business online.

But she said one area of state government is skyrocketing in staff and costs: corrections. She said Michigan's corrections staff has grown from 5 percent of state employment to more than 20 percent, and that Michigan incarcerates its citizens at a rate far higher than its neighbors -- with no appreciable effect on crime rates.

Granholm, a former prosecutor, said that "I will not allow violent criminals to be released into society, period." But she said there are ways to trim the prison population by selectively releasing low-risk inmates. And she proposed sharing any savings on a one-third basis between law enforcement, higher education and a reduction in the Michigan Business Tax surcharge.

In opening her speech, Granholm joked about her recent surgery for bowel obstruction, saying she pleaded with the doctor not to use the word "bowel" in public comments, and that state Republicans were in no way responsible for the "obstruction." 

And, she said, the last thing she remembered before the anesthesia took her under was her surgeon saying, "You know, I'm a Republican..."

Just before her speech, the Governor addressed several hot issues including the Michigan Business Tax and Cobo Hall expansion project during a live interview with WWJ's Jayne Bower, Joe Donovan and Roberta Jasina. To listen, click here.

To download a copy of the governor's Mackinac presentation, click here.