  Lilpup Member Username: Lilpup Post Number: 1300 Registered: 06-2004 Posted From: 69.129.146.186 |
Now that the rest of the country's economy is starting to slow is there a snowball's chance in hell of Michigan's picking up a little? We always seem to be the opposite of everybody else so I'm hoping (and really tired of struggling). | ||
Tkshreve Member Username: Tkshreve Post Number: 14 Registered: 07-2006 Posted From: 12.32.128.68 |
Once Google and it's 500 jobs get here, all your prayers will be answered. | ||
Ndavies Member Username: Ndavies Post Number: 2137 Registered: 10-2003 Posted From: 129.9.163.234 |
If you think things were bad up to now, wait until car sales drop across the country. Between an overall drop in vehicle sales and the increase in foreign manufacturer's market share, It will be 1979 all over again. | ||
Blaw82 Member Username: Blaw82 Post Number: 107 Registered: 02-2005 Posted From: 132.47.128.201 |
I hope your being sarcastic about the Google thing. 500 jobs is not going to boost our economy. Especially with the way the car companies have taken a plunge. I'm not sure what the big answer is to repair Michigans' economy. | ||
Mackinaw Member Username: Mackinaw Post Number: 2081 Registered: 02-2005 Posted From: 69.220.62.136 |
Clearly a single state's economy can go in the opposite direction of national trends. However, it is much easier for one state to mess things up while the rest of the nation flourishes than vice-versa. If our goal is to diversify our economy, then we need to attract employers whose sector is expected to remain strong over the coming years. Clearly, while real estate and inflation-adjusted per capita income seem to be headed towards a decline in the overall American economy, that does not mean that all sectors and all 50 states will be going to shit. If Michigan can go high-tech and get its work force to transition from the manufacturing to service sectors, then we'll be fine. It also would help if our leading corporations--auto companies--do whatever is neccesary NOW to remain solvent in the future, and prepare for the future by gearing up for new fuel technologies and cars that will compete with what other nations produce. | ||
Perfectgentleman Member Username: Perfectgentleman Post Number: 110 Registered: 03-2006 Posted From: 170.153.65.23 |
Of course not, Michigan's economy will get worse than it is now should the country fall into recession. There is nothing related to the local economy that will offset and run counter to the national economy. Pawn brokers, divorce lawyers, and bankruptcy attorneys will do well. We are still dependent on the domestic auto industry, their sales will go down even further in a recession. Their main source of profits, SUV's, are no longer selling well as gas prices are high. This will hurt them more. Unless the rest of the country decides all of a sudden to "Buy American" when they go to the car lot we will not see a recovery for a long time. There is no evidence that this will happen as most people feel domestic cars are inferior to Honda Accords, Toyota Camrys and Nissan Sentras. We need to diversify the state's economy and convince foreign automakers that Michigan is a good place to expand. This is proving to be difficult for many reasons as foreign automakers prefer to operate in a non-union environment, something that would be virtually impossible to do in this state. It is easier for them to locate in the south, where they can pay lower wages and probably face less regulations, taxation and labor problems. Granholm’s attempts at attracting new business is mostly a failure and comes too late for the current economic cycle. The “Cool Cities” initiative has not generated any meaningful results in terms of real economic expansion. Her reluctance to engage with Japanese automakers due to her allegiance to the UAW is another issue. The Google announcement was fraught with exaggeration and supposition, the “1000 jobs” announcement was mostly hype and will not materialize for many years if at all. Not intending to be a downer here, but we need to make sweeping changes in our approach as well as put forth a gargantuan effort into improving the state’s image world-wide. It is all very sad because Michigan is one of the most beautiful areas of the country, we have tons of natural resources, a great work force, affordable housing, decent infrastructure, good universities and schools (in some areas) yet we are being out-performed by other rust-belt states who have far less to offer. | ||
Mikeg Member Username: Mikeg Post Number: 246 Registered: 12-2005 Posted From: 69.136.155.244 |
Well first off, I'm not sure I agree with your broad premise that the US Economy as a whole is starting to slow based on the results of just one quarter. It's true that the rate of growth of the US GDP is slowing - but it is still expanding at a 2.9% annual rate (vs. the 5.6% rate in the first quarter). Compare our GDP growth rate to France's recent 1.6% rate and Germany's 2.1% rate and I think things are still going pretty good here in the USA. Yes, the national unemployment rate did rise in July to 4.8 % and the hot housing market has cooled, but wages continue to rise nationally. To answer your question about Michigan, I don't think there is a snowball's chance of Michigan's economy improving until the Delphi-UAW-GM bankruptcy issues get settled and the UAW successfully negotiates new contracts next year with Ford, GM and DCX. Until then, everyone is holding back on discretionary spending due to the uncertainty of their own conomic situations. I'm not an economist, but I did recently stay at a Holiday Inn Express...... | ||
Firefly Member Username: Firefly Post Number: 66 Registered: 06-2006 Posted From: 198.30.81.2 |
"It is all very sad because Michigan is one of the most beautiful areas of the country, we have tons of natural resources, a great work force, affordable housing, decent infrastructure, good universities and schools (in some areas)..." I can agree with that wholeheartedly. Michigan is definitely a beautiful state that does not need to go the way of say a Mississippi. Mississippi has no redeeming values (IMO as I am not a "Gulf Coast" person). Also, Michigan has one of the most interesting and complex core-cities in America. Detroit definitely operates on its own terms--albeit to its detriment at times. Such a shame that Michigan continues to dwindle into insignificance based on a poor business climate. | ||
Tkshreve Member Username: Tkshreve Post Number: 15 Registered: 07-2006 Posted From: 12.32.128.68 |
The local economy would have some very large hurdles to overcome if it were to perform better than the National economy. Consider: The housing market - It is impossible to sell a house right now unless you prefer being lowballed. If you're buying, better not plan on moving for several years. Unemployment - Layoffs everywhere, plants closing, City employment being cut for budget reqirements. When I graduated 4.5 years ago, it was worse. I finally found a job, but my guess is it is still going to be hard for lots and lots of people. The state of the US/MICH automakers - Deeply engulfed in pensions and surplusses of SUV's, it is hard to see them expanding in the near future. The only thing to keep the wheels moving is mergers with foreign automakers. Disposable income/consumer spending/cost of living - What staple hasn't gone up? Insurance - through the roof and under servicing its customers. Health / Auto / House / Life / Flood Gasoline - period. I keep hearing how Fuel supples were never even interupted from hurricanes, middle east wars or pipelines being closed. Maybe Exxon really did just rape the public for what it's worth as opposed to the excuses I kept hearing. Natural Gas - even blankets have gone up in price. Natural Gas has doubled in price in one year. A friend in the business told me "don't plan on it going down for a while" Electricity - when is the last time your energy provider stated on a bill.................due to the surplus of energy and the decreasing price of generating this power, we have made an adjustment to decrease each unit of power by $X.XX Minimum wage - tell me how many people out there are supporting families and buying houses on minimum wage. Just wait for the inflation to hit from that blunder. Every business is tied to minimum wage labor, but most minimum wage jobs are tied to young, single people who spend their money on a good time. Taxes - I've never had this many hands in my pockets in my life. I don't even drive through Detroit to and from work in fear of being taxed. Minor, but look at the facts, taxes are not getting any less. Quite pessimistic, but can you really argue the facts. | ||
Royce Member Username: Royce Post Number: 1788 Registered: 07-2004 Posted From: 69.209.137.86 |
Michigan, like a leopard, can't change it's spots. Manufacturing has been the backbone of this state for over 100 years. Even before the auto industry grew, Michigan was home to ship builders, furniture makers, carriage builders, bicycle makers, and stove builders. Today the auto makers remain, but are hurting because of foreign competition. Manufacturing in related areas is going oversees to countries whose workers will accept a lower wage, yet the U.S. government does nothing to help the American auto companies with health care costs, which foreign countries cover. Diversifying into the service sectors jobs lowers workers wages. Lower wages mean less buying power. Less buying power means workers have less money to buy items in the economy to keep the economy going. Buying on credit is only a short-term solution. When an individual's credit cards are maxed out they will be forced to stop spending, which slows down the economy. Michigan has three, maybe four, good months of weather. For the remainder of the year it's cold. How many people prefer taking vacations in cold climate states as they do in warm climate states? How many retirees from warm climate states move up to cold climate states? Michigan can't attract tourists like Florida can and as a result tourism is not going to replace the loss of auto and other manufacturing jobs. All this talk about Michigan creating more service sector jobs is tiresome. What high-tech jobs are going to come here? With the exception of Google with its maximum of 1000 jobs, it is not going to replace 300,000 manufacturing jobs lost in Michigan since 2000. To retrain blue-collar workers for high tech jobs will take years. Training their children will still take years. Service sector jobs, except for doctors, lawyers, and financial brokers, are slave labor jobs. Service sector jobs ask the worker to get drinks for a bunch of old folks wasting their savings while gambling at the casino. Service sector jobs ask the worker to baby sit someone's dog while their at work. These kinds of jobs are the great jobs that are available according to those who are saying the economy is so great. Yeah, right. Las Vegas is probably the capital of the service sector industry. Yet many of those running out there to live and work are working two jobs to make ends meet. A person might be a showgirl by day and a bartender at night. Sounds exciting. I don't think the service sector is going to make a lot of people happy. If manufacturing dies and tourism can't replace those jobs, then what kinds of jobs can Michigan offer its citizens? Not much in my opinion. Not much. | ||
Perfectgentleman Member Username: Perfectgentleman Post Number: 111 Registered: 03-2006 Posted From: 170.153.65.23 |
Royce - You make some good points. But there are other states whose weather sucks as bad as ours but are doing better economically. We do have many recreational possibilities during the winter months that many states do not have. Many warm weather states like California have many disadvantages and yet the seem to overcome them. High cost of living, high taxes, floods, fires, droughts, gang violence, overcrowded freeways, pollution, etc... They still seem to attract business. They are able to portray themselves more positiviely then we have been able to do. I agree service jobs are not as high-paying as manufacturing jobs, this is going to have an effect on the overall economy in the US. It is folly to think that a super-power like the US can get rid of all of its manufacturing capabity. The service sector in large part depends on the manufacturers! We are exporting jobs, capital, intellectual property and becoming dependent on nations who love us not... | ||
Ray Member Username: Ray Post Number: 775 Registered: 06-2004 Posted From: 12.108.190.1 |
Perfectgentlemen, The Free Press today has published an article addressing your question. http://www.freep.com/apps/pbcs .dll/article?AID=2006608300319 The relevant quote: "I hate to superimpose worse news on top of bad news, but this is not a cycle," said David Littman, a senior economist for the Mackinac Center for Public Policy, a Midland-based think tank. "We're in a secular decline here in Michigan. As the economy slows nationally, we're going to sink much farther relative to the other states. We've only just begun. "We're going to see Michigan sink to levels that no one has ever seen. We're going to be looking at the highest unemployment rates in the nation for the next five to 10 years." This is sad beyond words because it's totally self inflicted US industrial output and exports are at or near an all time high (contrary to the propaganda you read on the forum). Onatrio and Chicago share Michigan's weather and manufacturing tradition. Yet they are prospering and attracting service and knowledge jobs. Ontario in particular has landed a number of transplant OEM auto factories. The global auto industry in a long-term period of growth and innovation. With our flagship industry and peer states booming, why is it Michigan should flounder? These should be glory years. The answer is: (a) the unions and the union mentality; (b) our anti-business state government; (c) fifty years of gross mismanagment of our flagship city Detroit; and (d) our peculiar culture of entitlement, anti-urbanism and racial conflict. That state and its people (both conservative and liberal) have totally fucked themselves. What drives me to distraction that from the top to the bottom, Michigan is in a complete state of denial, unwilling to consider for even a momment that its people and its policies have created the quagmire in which it now sinks. You would think that a catastrophic 40 year record of decline would at least shake the faith of both the Republican and Democratic leaders in the state. But both camps remain completely committed to their respective policy failures, namely subruban sprawl (Republicans) and anti-business government (Democrats). Kiss your home equity goodbye. | ||
Bibs Member Username: Bibs Post Number: 556 Registered: 10-2003 Posted From: 152.163.100.8 |
Since the media normally reports negative and sensational stories, we all have a jaded opinion of the regional economy. Concentrate on hard econcomic figures rather than the story du jour. The economy in this region is very cyclical. Each time there is a recession, people open new businesses and some are not autocentric. This helps to diversify the economy in the region and makes the region stronger. If forces people to change! What happened to Texas in the 80's after the oil boom went bust? Texas is doing great now. Also, government agencies don't create jobs. If they did, we would all be working for the government. Keep that in mind the next time you see a campaign ad. The goverment is in the business of redistrubting wealth and taking care of the infrastructure. Taking your hard earned money and blowing it on roads and blue bridges. The state goverment has only two economic tools: tax breaks and grant money to attrack or keep companies in Michigan. The first one is debit and second one is a credit so the net effect is zero! | ||
Futurecity Member Username: Futurecity Post Number: 336 Registered: 05-2005 Posted From: 69.212.213.206 |
Imagine for a moment if domestic car companies built vehicles that people actually wanted! No regional economic tailspin. No mass layoffs. No plants shutting down. Jobs aplenty. Nothin but dollars-a-flowin' thru the local economy. | ||
Lilpup Member Username: Lilpup Post Number: 1301 Registered: 06-2004 Posted From: 69.130.18.100 |
IIRC American manufacturers are building and selling as many cars as they ever have. Their decline in market share is because as the market grew their sales didn't. The job losses are due to modern manufacturing efficiences and plant relocations. | ||
Futurecity Member Username: Futurecity Post Number: 337 Registered: 05-2005 Posted From: 69.212.213.206 |
If you substract all of the buyers who buy because they are obligated (such as employees, retirees and their families, suppliers and their families), then subtract all of the buyers who buy because they get a fabulous discount (employee pricing for everyone!), and then subtract all of the buyers who feel too guilty to not buy domestic, I bet the domestic car companies would be down to about 25% market share total. | ||
Perfectgentleman Member Username: Perfectgentleman Post Number: 112 Registered: 03-2006 Posted From: 71.227.26.121 |
Futurecity - It is true that the Big 3 are laying off their best customers! The employees of these companies and their families account for a huge share of the sales. I am in the group of feeling guilty about buying foreign cars, I have bought 10 or so GM cars over the years and now I drive a Chrysler. Even though they are foreign-owned my Jeep is 85% US content built in Toledo. I actually think the Daimler thing has made them more viable. I cannot bring myself to buy a Toyota, Honda or Nissan even though the big 3 are pushing foreign made product themselves. When I travel to either coast, it is very alarming because all you see is foreign cars. Folks in CA and NY don't like Detroit much or its products. I am not for government intervention in the free market, but I find it strange that we are facing total devastation and the federal government does not seem to care. The airlines were given billions after 9/11, we have massive farm subsidies, there was billions in federal aid allotted for NYC, New Orleans and other disaster areas, billions for Iraq and Afghanistan yet we are undergoing a slow, agonizing death and nobody cares. I am a conservative but this is one of many issues that Bush is wrong on. If the big 3 fails the effect on the national and global economy will be huge. If the government has to assume the pension liablities that will be huge. Again, nobody cares but us here in Detroit. At least we should look at our trade policies and make sure we are on a level playing field, which I think we all know we are not. The Japanese auto industry is helped greatly by their government, and they are quite protectionist in their approach to trade. The free traders would have us believe protectionism is bad yet it seems to be working for China as they are seeing double digit growth in their GDP annualy. (Message edited by perfectgentleman on August 31, 2006) | ||
Bob Member Username: Bob Post Number: 1098 Registered: 11-2003 Posted From: 205.188.116.137 |
Bibs does make a good point, after the MI downturns of the 1980s, people did open lots of small business, and MI economy diversified. Now, it still is not on the scale where it can make up for the downfall on manufacturing/auto industry problems, but remember what the unemployment rate was during the 80s, much worse than now. With that said PerfectGentleman makes some great points about how the foreign automakers are helped by their government (hey the French government owns a piece of Renault). | ||
Wazootyman Member Username: Wazootyman Post Number: 117 Registered: 02-2006 Posted From: 68.75.220.9 |
It's purely a gut feeling, but I really don't think it's a foregone conclusion that Michigan is screwed. Despite all the doom and gloom, there is a lot of good happening right now. I don't think there would be nearly as many outside investors putting their dollars into Detroit if they thought the area was only going to suffer further decline. There are a lot of brilliant, motivated people in this area. Some might flee, but I think there are a lot of people that will really step up and put effort into turning the state around. I know I will be. | ||
Danny Member Username: Danny Post Number: 4927 Registered: 02-2004 Posted From: 141.217.174.229 |
While the whole U.S. is enjoying a 4.1% GPD growth. Michigan is being seriously left out of the ecomonic employment market. Granholm better do something to bring more jobs back to Michigan before DeVos steps in and turn Michigan into a gentrified job market with a serious budget deficit. | ||
Mikeg Member Username: Mikeg Post Number: 249 Registered: 12-2005 Posted From: 69.136.155.244 |
Spending provides cheer on US economy More information that should dispel any notions that the US economy is tanking - in spite of the drag Michigan is imparting on it. | ||
Bibs Member Username: Bibs Post Number: 557 Registered: 10-2003 Posted From: 205.188.116.137 |
Economic activity is very difficult to monitor and economics is not an exact science. Just imagine trying to keep track of all the economic activity that occurs in the US on a single day! What about all the black market activity such as solen goods, non-declared wages and the billion dollar drug trade. This explains why the Federal Reserve will raise the interest rate and studies the economic activity to see what happens. Also, keep in mind that two thirds, two thirds of the ecomonic activity in the US is consumer spending and I don't think that figure includes durable goods such as car sale etc. Wow! The majority of that two thirds of consumer spending ends up in restaurant sales! Hun! If you analyse your credit card bill, you'll more than likely find that 20% of the charges are prepared food items. So rather than trying to make cars, perhaps we should start making food and beverages such as Hansen, Jolt, Pelican Mustard or Morleys Candy! |
