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Healthy Skepticism? Meet Michigan’s Main Street Economics

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If there is one positive thing that can be attributed to Michiganders, it’s that they are perennially hopeful.

I noticed this when I moved to Michigan in the early 1980s. Coleman Young was the mayor of Detroit back then, and he was full of promises of a “new” Detroit. I believed the Pied Piper of Southeastern Michigan, just as many people did. Fast forward twenty-some years and we have a new Detroit and a new Michigan, all right. Hard to believe, but it’s somehow worse than the 1983 version.

At one time, there were the glory days. Mix a rich history of explorers, the ingenuity of Henry Ford and others, scenic landscapes, bountiful harvests, four of the five Great Lakes, and you have a state grand enough to merit visiting. At least the Pure Michigan commercials (ones employing ex-Michigander Tim Allen and costing millions of dollars) lead the viewer down that garden path. Of course, there’s the other side, as told by Chris Hansen in a recent televised report (which many derided as being too harsh but I thought was accurate). Visiting Michigan and being trapped here are two different levels of consciousness.

Of course, I am a cynic. This state, while pretty and promising in some regards, has been on an unsustainable course for decades. It wasn’t readily apparent at first, but here on Main Street, the downward slide has been chipping away at a once healthy economy since 2001.

When times were flush, the autoworkers union, the teachers' union, and other government and non-government unions contracted healthy benefits packages. Good for them, except Michigan is now Greece, with entitlements eating away at the budget, a shrinking tax base, and little manufacturing left. Motown left for Los Angeles. The auto companies left first for states with lower overhead and friendlier tax structures, then for countries with cheap labor.

And the people didn’t see it coming? The government? I did. Even the eggheads had that figured out, although I think they ball-parked on the low side.

Our state government, however, does an excellent job with regard to PR as witnessed here, and an even better job of selective capitalism. Newscasts around here are extremely rosy. When “good news” of job growth is touted on the local airwaves and in the papers, I don’t embrace the parade and the ticker tape; I am skeptical. A few years ago, Governor Granholm brought out the promise of “green” jobs. I’ve been asking the question for years. “Do you have a green job? Do you have a green job?” So far I’ve yet to meet anyone with a green job. I opened a recent copy of the Detroit News where unhappy men who paid good money for green job training cannot find a job – green or otherwise – to save their souls.

There was a big hoop-de-do over Governor Granholm and Google (supposedly) bringing 1,000 jobs to Ann Arbor. I was always skeptical about the Google deal. If I had an opportunity to work for Google in Silicon Valley or Google in Ann Arbor, I know which facility I would choose. The only reason Google came here was because of significant tax incentives (20 years’ worth and like Google needs money?), free parking spaces, and God only knows what else. The actual employment at Google Ann Arbor is around 225.

Then there was the plum deal given to Hollywood movie producers who brought their movies to the Mitten. With a promise of receiving a rebate of up to 42%, who wouldn’t come to Michigan? While I wouldn’t fault anyone for taking advantage of any tax break (not even the rich and famous in LaLa Land), my question has been, what is this costing us? No one knows.

We own a small business, service related and one that is not directly part of the auto industry. Our customers are of the one-time variety – once they get what they came for, they are on the road and out of here. It all makes sense that our business is declining. If a family has no disposable income, they won’t use our service. We are the trickle down. We pay our debts and make our payroll, but we can't afford improvements. After witnessing nine years of steady negative numbers, due to residents moving away, job loss, and high unemployment, we are quite literally hanging by our fingernails waiting for the next ax to fall.

In my Internet meanderings today, I came upon a University of Michigan forecast of our state. It wasn't just rosy, the good news was in full bloom. Supposedly, 2011 will be the turnaround year.

OK.

I've come to view any promise or hope of change as fodder to keep the people believing in miracles while they are suffering. It's easy to do with a state full of hopeful people.

So excuse me if I raise an eyebrow at the latest promise made. I'm just the skeptic on Main Street.

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About Joanne Huspek

I write. I read. I garden. I cook. I eat. And I love to talk about all of the above.
  • Glenn Contrarian

    It’s all the unions’ fault?

    Uh-huh. Sure. Right.

    If that were truly the case, then Boeing wouldn’t be the biggest airline in the world, and Washington state would be what Michigan is now, because the unions at Boeing are at least as powerful in the day-to-day operations and decisions concerning running the company as the automotive unions are at the Big Three.

    If you’ve just got to blame someone, then blame those who fought against higher CAFE standards (mainly Big Oil and the CEO’s of the Big Three)…and thus drove business to Japanese autos with higher fuel efficiency. Blame those who fought against increased automobile manufacturing safety requirements…and thus drove business to Japanese autos with higher safety standards. And blame the health insurance industry, since even now more of the price of each car goes towards health insurance for the workers than for the steel to construct that car.

    To be sure, the auto unions share some of the blame – they did ask for and receive significantly more than they really needed. But the larger share of the blame by far goes towards those who resisted regulations that would have brought Detroit to a higher standard…and towards those who even now believe that the marketplace will somehow solve all the ills of our health care system.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Boeing is an airline?

  • http://joannehuspek.wordpress.com Joanne Huspek

    Dr. D. I know what he means.

    Listen, I have no problem with people with cushy jobs and nice benefit packages. They should consider themselves extremely lucky. EXTREMELY. I know autoworkers who live on a measly retirement income of $60K a year. Plus benefits. Plus they do not pay income tax. The teachers and other public workers aren’t far behind.

    I’m the last person to tell anyone how to right this. But I can tell you if something isn’t done soon, it’s going to be a disaster, and the rest of the country won’t be far behind us.

  • Glenn Contrarian

    Joanne –

    Like I said, the unions did ask for and receive significantly more than what they needed…BUT the lion’s share of the blame for Michigan’s woes lay with the CEO’s who fought against increased automobile manufacturing safety regs, the CEO’s and Big Oil who fought against increased CAFE standards, and everyone who fought against proper regulation of our health care system.

  • Clavos

    Boeing wouldn’t be the biggest airline in the world…

    While Boeing is indisputably the USA’s largest aircraft manufacturer, there are plenty of industry sources who argue credibly that Airbus Industrie is the world’s largest manufacturer.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    @ #3:

    I know too, Joanne. I was just having a Clavos moment.

    Although I kind of wish Boeing was an airline. They’d probably be a sight more customer-friendly than most of the pirates who are.

  • Clavos

    I was just having a Clavos moment.

    Glad to see you rise to the occasion, Doc…

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    :-)

  • STM

    Clav’s right … Airbus has taken over from Boeing as the largest manufacturer and seller of civil airliners.

    I must say, though, I would be very wary of flying on the A380 … because it’s new. I prefer travelling on aircraft that have had ALL the bugs ironed out over the years.

    I’d choose an old, rattling 747 anytime over the A380. Not saying the new Airbus is no good, but I have my views on these things.

    Having made numerous flights on the DC-10 in the early days when it was still dodgy, and survived, I’m a stickler for the proven.

    Mind you, I have done some foolish things: two Aeroflot flights on the Tu-154 and two on the IL-62. Aaah, the folly of youth.

    The Tu-154 had a bad reputation, largely undeserved. It was a great aircraft and most accidents were the result of pilot error, not technical problems.

  • Cannonshop

    Actually, Glenn, the influence is reversed-we’ve got the best Union Boeing could buy out from under us.

    The latest contract included a clause that eliminates the health-care provisions a lot of members went on strike to get-just as soon as “Health Care Reform” goes active in 2014, and the contract that was finally accepted offered LESS than the company’s “Final Offer” that was voted down before the strike.

    But you’re right about one thing: it’s NOT just the Unions that broke Michigan. It’s the Michigan Government that thought the gravy-train from GM, Ford and Chrysler was never going to end that broke that state.

    And it’s going to happen in Washington State, eventually-Boeing’s putting up a new factory in the Carolinas (expanding the old Vought factory mostly), and it’s non-union and not under the kind of official harassment they get from city, county, and state levels here in the PNW.

  • Glenn Contrarian

    To all –

    My bad – aircraft manufacturer vice airline.

    As far as who’s bigger, as of May 11 of this year, Airbus has delivered 159 aircraft versus Boeing’s 146…but Boeing has 108 orders for new aircraft whereas Airbus has 67…and that number for Boeing doesn’t include another 124 F/A 18s ordered by the Navy on May 14. The issue is quite debatable.

    And C-shop –

    If the ongoing strike in Long Beach – and in St. Louis where the union authorized a strike but AFAIK hasn’t yet walked out – are any indication, the unions are NOT rolling over and letting their hard-won benefits go bye-bye.

    Pointing to the new Boeing plant in the Carolinas as an indication that Boeing’s going to leave WA…well, that’s a possibility – but it’s no more a possibility than it was when Boeing opened up plants in other states including CA and MO (and moved their HQ to IL). IMO, it’s simple diversification of assets.

  • Clavos

    The issue is quite debatable.

    Not really.

    In the civilian airliner market, “orders” often are ephemeral, many times representing nothing more than the dreams of airline execs or their desire to impress stockholders.

    Since its rollout of the highly successful A320 in the 90s, AB has held a significant lead over Boeing in actual deliveries for all but a couple of years, right through 2009.

  • Les Slater

    I lived in Detroit for a year ending about two years ago. The economic situation was quite bad then and it is worse now. Chicago is much more vibrant but has its problems too.

    I just got back from being on the road for a couple weeks. A good chunk of the time I was in a Detroit suburb, Oak Park.

    When I was living in Detroit it was clear most of the whites had moved out. Even gray squirrels were gone, just the black variety remaining.

    I was staying in a vacant house that my landlord friend has not been able to rent for several months. She is having problems with her other properties too. For her things look quite bad. I tell her she is not going to survive much longer as a landlord. She agrees.

    The ones that can’t afford rent where they’re staying eventually get evicted. But the ones that are in the neighborhood where I was seemed quite successful economically. I sat on the front porch during good weather. I noticed the neighbors, mostly black, were friendly, had good cars in the driveways and get this… most of the houses had lawn-care services visiting every few days. There were even gray squirrels there.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Les,

    I’d like to email you first draft of my introduction to “social theory,” a work in progress – for your feedback. Click on my URL, my email address is listed at the navigation bar on top, on the right.

  • http://ruvysroost.blogspot.com Ruvy

    Glenn,

    It seems that you just can’t swallow the plain truth straight from the mouth of someone who knows because she sees only shrinking horizons in her future. Joanne is practically chained to a sinking ship, the USS Michigan, and all you can do is whine that the unions are not the entire cause? What a big hearted guy you are!

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, Joanne. Perhaps the best thing about your state are your educational institutions.

    How are they doing, by the way? you didn’t say. Haven’t they been affected by the pinch?

  • Glenn Contrarian

    Ruvy –

    ‘Not the entire cause’? Not even a major portion of the cause.

  • Les Slater

    Ruvy,

    I was thinking about you the other day. I was invited to a Synagogue when I was in the Detroit area. It was primarily a Cantor performance. I enjoyed it. It was quite secular, even the music. I was actually looking forward to a more Jewish experience. It crossed my mind that you would frown on its secularism.

    Les

  • http://ruvysroost.blogspot.com Ruvy

    Les,

    I’m curious. Was this a Sabbath service or a prayer service? Was it a bar mitzvá or some kind of ceremony concerning a groom or bride? Or was it some other kind of celebration or commemoration.

    Secularizing a prayer service just to impress the goyim (not you personally) is disgusting – but a secular event in a synagogue a beit knésset, a house of assembly, is quite common.

  • Les Slater

    It was billed as ‘Our Path to Adat Shalom’. It was a Thursday evening.

  • http://ruvysroost.blogspot.com Ruvy

    Is Adát Shalóm the name of the synagogue?

  • http://ruvysroost.blogspot.com Ruvy

    adát shalóm means “congregation of peace” in Hebrew.

  • Les Slater

    You’re right. I looked at the other piece of literature handed out. It was billed “Installation Ceremony for Hazzan Daniel Gross & ‘An Evening of Song'”

  • Les Slater

    Adat Salom Synagogue, Farmington Hills, Micigan

  • Les Slater

    Shalom

  • http://ruvysroost.blogspot.com Ruvy

    Well, they must have money. They can afford a Hazzán. Most synagogues I’m aware of have what is termed a shalíaH tzibúr – public representative – and most prayerbooks have in them, in the part that the Hazzán would be expected to perform, the term shalíaH tzibúr. This was true even for the relatively affluent conservative synagogue I went to south of St. Paul many years ago.

    I’ll bet the place is “reform”. adát shalóm is the kind of name I would expect to see on a “reform” synagogue….

    Very few synagogues in Israel (which are overwhelmingly orthodox) have a Hazzán, and most (but not all) conservative synagogues in the States got rid of them years ago.

    The Hazzán was the guy who gave what amounted to opera performances on Rosh haShana and Yom Kippur. It’s a tradition that is unfortunately lost, for the most part.

  • Les Slater

    It’s not just Michigan, Dow is down 300 points. Problem is worldwide.

  • http://takeitorleaveit,typepad.com/ roger nowosielski

    Stop disturbing the peace, Les. You’re giving the believers in our recovery a bad dream.

    BTW, have you heard the latest? The want to install automatic stops on trading when the index moves too sharply in either direction.

    I’m sort of conflicted about this notion, but it looks to me as though they’re trying to artificially control the financial markets and thereby mask the problem rather than allowing it to reflect the underlying anxieties and uncertainties.

    Just a way of making us believe the sky is blue.

  • Les Slater

    Circuit breakers on individual stocks? Just band-aid for deeper problems. It’s just a way to find the next weakest link.

    “…rather than allowing it to reflect the underlying anxieties and uncertainties.”

    Was that a Freudian slip? Isn’t the market supposed to reflect present or future value? How far are we removed from reality?

  • http://takeitorleaveit.typepad,com/ roger nowosielski

    Well, it ought to. But you can understand that in these perilous times some people might want to keep the markets at a steady keel. If only to prevent the breakout of a panic.

  • Clavos

    Stop disturbing the peace, Les. You’re giving the believers in our recovery a bad dream.

    Chief among them on these threads, our friend, Glenn Contrarian, Apologist-in-Chief for the Obama administration’s fiscal policies.

    There are a lot of trees to count before this country’s economy is out of the woods…

  • Les Slater

    Hi Clav

  • Clavos

    Hey Les, how’ve you been?

  • http://ruvysroost.blogspot.com Ruvy

    Les, Clavos,

    Don’t get yourselves that concerned. When the Dow goes below 9,500, then get concerned. In the meantime, the value of gold has dropped below $1,200/oz, the dollar has risen against the shekel and the euro. For today anyway, you’re on easy street….

    I sure hope Obama’s boys are paying their apologist here a decent wage for defending [Gratuitous vulgarity deleted by Comments Editor] the job they are doing [Gratuitous vulgarity deleted by Comments Editor]….

  • Les Slater

    Clav, I’ve been fine. And you? And your wife? How about boat sales?

  • Les Slater

    Ruvy, I’m not worried.

  • http://ruvysroost.blogspot.com Ruvy

    And Les, I was wrong about Adat Shalom Synagogue – they call themselves “conservative”. This is so one of their suits doesn’t show up with a legal complaint for defamation….

  • Les Slater

    Ruvy, thanks for the link.

  • http://ruvysroost.blogspot.com Ruvy

    I pulled this off the yahoo.com financial page, for those who may be interested….

    Market Summary

    Symbol……Last……….Change
    ——————————————-
    Dow……10,196.56..-247.81 or -2.37%
    Nasdaq….2,234.91…-63.46 or -2.76%
    S&P 500…1,087.67…-27.38 or -2.46%
    10 Yr Bnd(%)…. 3.2760%……-0.8300
    Oil……….$69.26/bbl…..-0.61 or -0.87%
    Gold……$1,191.80/oz…-3.60 or -0.30%

  • Les Slater

    I sense a mood of ‘shoot the speculators’ growing in Europe.

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