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November 14, 2008


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As a fellow Michigander I can certainly feel your pain. However, I do not think that the Governor alone could have done much to avoid the crisis we are in right now.

1) We are a single industry economy (autos) and those have taken a beating in the last 7 years or so.

2) Statistically, Michigan ranks right in the middle of the pack for both personal and corporate taxes. Source:

3) Obama (or Bush) could save our state by authorizing the federal bailout funds to the Big 3. Yes, they have a history of poor management, and most of the executives deserve a swift kick out the door, but the fact is, if you let them fail, the middle-class in Michigan will suffer the most. We would fall into a single-state depression that would be devestating to the workers of Michigan.

4) Additionally, the Big 3 have taken on massive restructuring efforts since 2001 and have aligned their costs pretty much with demand, however, the credit crisis and national economy was just too much for them to handle this early in their turnaround.

I live in Iowa but travel through Minnesota, Wisconsin and the UP every year and was in lower Michigan last year. What I notice about Wisconsin, Michigan and Minnesota compared to Iowa, Illinois or Indiana is the roads are much better and the parks are much nicer. My guess is that is related to higher taxes.

The rivers are cleaner (I do alot of canoeing in the summer) but that may be a fact of geography, lots more hard rock bottom streams and less agricultural runoff. But at least compared to Illinois, Indiana and my home state I would rather visit those 3 high tax states than the lower tax states like Illinois and Indiana. The quality of life appears better to me.

Michigan, Wisconsin and Minnesota also have many, many more state supported universities than Iowa. Of course there is much more population, but I consider that a real plus for those states.

The only thing I know about Granholm is the interview she gave on one of the NPR talk shows earlier this week. She pleaded for federal help for the auto industry. I don't know about her overall record, but I would have to agree with Mark B. that it seems unfair to place at her feet the blame that the demise of the auto industry has meant to Michigan's economy and psychological well being. I don't know what any governor could do in the short term to change things for the better.

I think the U. of Michigan is a world class university, one of the best public schools in the U.S. But I'm not sorry they're 3-7 this year. 0-10 would be better:) I wish Iowa played them this year.

We are certainly impacted by the economy:

1) My Dad had to retire from his physically demanding job because of a heart condition. Now he cannot even find a part-time job to supplement his pension (not even McDonal's is hiring in our area).

2) My Mom works for one of the Big 3. The stress of not knowing what is going to happen is tremendous. A bankruptcy would be devastating.

3) So, in short, if the Big 3 go bankrupt, my parents will be living on a tiny pension in a town with no jobs in a house they can't sell because it has lost over 30% of it's value.

YES, my family has been impacted, and it could get much worse. Now multiply that by similar situations occuring all over this area. We are hurting bad.

The rest of the nation does not understand how bad it really is now in the Detroit area, these are VERY hard times right now.

I've been talking to people I know across the country. Here's the rough status:

DC - I know of one person who just had thier home go into foreclosure
NC - One fellow is self-employed, getting less business, times are tough
IN - One fellow doing well, a little concerned but holding steady
WI - One lady slowing getting eaten up in rising costs with stagnant pay. Job future uncertain.
MN - One lady moving back to CA to live with family; lost job and has little options


- Husband lost job, wife still working but job uncertain, just accepted welfare (two kids to care for)
- Fellow doing okay, job uncertain, looking for work out of state
- Fellow lost job, looking for any work at all, looking to move back home
- Fellow lost business, moved to Kansas to take over a family shop
- Couple divorced over husband's unemployment, man moved out of state, woman moved to Kentucky to a new job

I haven't spoken to folks I know from MS, HI and MA yet, but plan to soon.

How exactly can Obama save Detroit when he is 1) 100% pro-union and as everyone knows, 2) Detroit cars are garbage because, among other things, too much money is spent on wages and legacy costs including pensions for semi-skilled workers?

I think people in my area aren't feeling an economic pinch as much as they are a perception of economic pinch. I live in a wealthy area and the people around here are really reigning in spending and increasing saving due to media hype. We aren't seeing the housing crisis and job crisis that much of the country is experiencing.

@ Pop:

Good point.

If high taxes and unions are the way to go, why isn't Detroit a paradise? What frightens me is that the policies of Obama and the democrats will take the rest of the country and send it down a parallel road to Michigan and the "rustbelt". Check out this article:

It's a really fascinating look into the problems of Detroit and the area.

RWH --

I'm originally from Iowa, but now I'm a fan of the Wolverines. Tough year this year.

@ Pop:

Good point.

Ahh, FMF, Michigan's pain is not kept to your state only. Look at Rhode Island, where we have a higher unemployment rate, higher taxes, a higher foreclosure rate and a Republican Governor whom we cannot get rid of.

You cannot drive a semi through RI because our bridges cannot handle the weight - on an interstate highway. Our drop-out rate is through the roof and local school districts are forced to lay-off teachers. Public universities are raising tuition mid-year and money for scholarships has been slashed. Those kids that actually do graduate run as far away as they can.

And the state economists said last week the the downward trend will continue for the next 12-18 months. Wow...

Granholm is a terrible governor (from everything I've read) but on the other hand, I agree with the sentiment of others that it's not really fair to lay all the blame for Michigan's economic troubles at her feet, but she does deserve some blame. Certainly, Michigan could have invested long ago in a more diverse economy (blame goes to some before Granholm for that). Michigan could have learned a lot from Texas circa the mid 1980's. Texas was once over-reliant on a single industry as well (oil). When the price of oil plummeted in the mid 1980's, the Texas economy was devastated for years. Texas managed to diversify significantly into a bunch of other industries - telecomm, technology, aerospace, manufacturing, transportation, finance/banking, etc - Texas invested in attracting companies from all of these industries and now has a well-diversified economy. Michigan would do well to emulate that, otherwise they are always going to be clamoring to the federal government to "please help the poor auto industry or we're all hosed."

@ Pop,

Your statement is very ill-informed.

1) Yes, Obama is pro-union, but the union has given away tons in recent concessions to the point where a new UAW worker is about equal to their Toyota and Honda counterpart.

2) Ford is now statistically equal to Toyota in quality, they are no longer building junk, take a look at the most recent Consumer Reports, a Ford Fusion is on the front cover. GM has improved a ton. As for Chrysler, well they should just close their doors, but that is a different story altogether.

3) The Big 3 have shed most of those legacy costs, but they will not realize the savings until 2010, hence they are asking for help to make until that time.

We used to live in Michigan but were SO blessed to be able to get a job outside of the State right before the huge meltdown. Every time I think of it I am so grateful to our Heavenly Father for His tender mercies!

We're in TN, and this place is really growing. We've been here a couple of years now and even in that short time I've seen the area expand. If you need a job, move south.... =)

Keeley --

We were just the opposite -- moved from Nashville to Michigan. We loved Nashville and hated Michigan at first (it snows a TON here), but now it's actually growing on us. That said, the economy is certainly in the dumper.

@ Keeley,

The Heavenly Father must have a different idea of mercy for those of us stuck here in Detroit. Oh well, what is meant to be will be.

"Are you/those you know starting to be impacted by the economy?"

Nope. However, I'm sure some of the impact will head our way in time. In small towns we get movies long after everyone else, maybe recession gets here later as well.


Do you have a job that is fairly easy to find somewhere else? If so, you may want to seriously consider moving where "high taxes, foreclosures, businesses failing, etc." aren't as big of a problem. I know you advocate moving to less expensive parts of the country to help make ends meet. It seems like Michigan is becoming a harder place to live, and you may want to get out while the getting is still comparatively good.

One governor didn't ruin Michigans economy. Michigans woes are primarily due to the dying US auto industry. Changing the governor won't fix GM, Ford and Chrysler.


Jim --

It's a solution I'm willing to try...

@ Mark B.

The differences in Labor Costs are obvious, and the closing of the gap as you mentioned will not be apparent in GM's books for many years if not decades, after the company files for bankruptcy. The present health care and pension accounts for the almost half a million retirees is killing GM. Unlike GM, Toyota pays $0.00 for their pensions, they invest in individual retirement accounts. GM is facing an $80 billion liability in it's retirement health care costs. Legacy costs have gone down, but they have not been shed.

The Big 3 have been dumping money into the UAW for far too long. They neglecting the need to retool their manufacturing ops because of such heavy labor burdens. Meanwhile, foreign auto companies came to the US and more or less held competitions on where their plants will be built. GM paid too much attention and money to Union contracts and not enough to innovations, technology advacement, quality and lean manufacturing. Yes, all of these have drastically improved over the last 20 years, but it's too late.

No matter how you slice it, the UAW should be front and center in this mess alongside Wagoener and the other Big 3 leaders.

Phil --

Yes, I have a job that has lots of opportunities. Thing is, I love my current job, the people, the company, etc. And we're doing well (the bad economy is actually helping our business as people look for low cost alternatives to other products.) My preference would be for Michigan to get its act together.

This economic crisis is global, whatever your opinions of your Governor may be. I think the worst thing that could happen to MI would be the bankruptcy of GM (or even all the big 3) because from what I have been reading, it would not be chapter 11, it would be chapter 7. Complete liquidation. Because they rely on credit to buy parts and Ch. 11 would not give them enough leverage to keep going. No parts no cars. No cars no parts makers. Possibly -3,000,000 American jobs in a matter of months.


Good luck getting rid of her... she's an economic advisor to the Obama transition team! I don't know about you, but if they are asking for her advice, I'm not too optimistic about our economic future.

@ Chris,

You said it perfectly. People think that this could be just like the airlines bankruptcies a few years ago, where they came out of it leaner and stronger. But, this is not true. As you said, the GM creditors are the suppliers, you can't just write off that debt, they need that money to make their parts.

@ Tom,

Are you saying that retired workers that were promised a pension and healthcare should have all of that taken away? How is a 60 year old supposed to make up for that loss?

Granholm has got to go. Not just her though, a lot of leaders need to step up their game. Detroit has been milking the auto industry for a very long time and has made a lot of people a lot of money. It's time to let go and diversify.

The other parts of Michigan that do not depend on the auto industry are not suffering nearly as bad. It's a big state.

Not too mention that the standard of living in a lot of areas outside of detroit are very high (farmington, troy, west bloomfield etc) and the "suffering" isn't really that bad in the grand scheme of things.

There are a lot of smart hard-working people in Michigan. Hopefully, we'll finally get off our behinds and make some changes rather than sitting around pointing fingers and hoping Obama will save us.

Mark B.

Absolutely not... my wife's grandparents are living off that pension and healthcare. I am saying that GM and the Union screwed themselves a long time ago. GM should never have let the Union monopolize the US auto labor market and the Union should have thought twice before demanding and continuing to demand such ridiuclous entitlement programs. After that monopoly was established the Big 3 spent the next half century pandering to their needs in every contract. Unfortunately we cannot let the automakers just file for bankruptcy as millions would lose their jobs. It is truly an unfortunate situation because the Volt is a revolutionary car that needs to be built and sold at an affordable price.

"Yes, Obama is pro-union, but the union has given away tons in recent concessions to the point where a new UAW worker is about equal to their Toyota and Honda counterpart."

OK, how about a 40 year old who plans to work another 25 years and then get a fat pension? What has the union given up for those people? And how many of those people are there?

"Ford is now statistically equal to Toyota in quality"

If you truly believe that, I feel for you.

It's a vicious cycle for GM & Ford, starting with their poor quality cars of the past (maybe present too, who really knows). I think people that currently hear about them losing money hand over fist, quarter after quarter, and still equate that with the poor quality cars and fear that if they go out of business, it will more expensive to repair those cars.

I own a Jeep and it's been great, but I can remember Ford and GM being poor quality for 15 years now. It will take a long time to reverse that trend, for now it's just easier for people to go with Toyota or Honda and not worry about it.

What I don't fully understand is why Obama put JG on his transition team. One would think a person with a demonstrated record of solving tough problems would be a requisite in such a time as this. Pretty sure she has done little (other than begging for money for the big 3) to help the ailing economic woes Michigan has been facing for the past 4-5 years. I also agree that she cannot shoulder all the blame--this crisis was a long time coming.

Ford equal to Toyota????

You are kidding, right?

Michigan citizens, suffering from something that must be akin to battered wife syndrome, keep allowing liberal politicians to run the state and Detroit, even after years of abuse that is clearly showing. Whats it going to take to get them to the nearest abuse shelter and allow someone else a chance to have political power?

Hi, I'm a college grad in Northern Michigan (All of MI is hurting and in trouble, for years now) and I'm looking to move. I'm looking at Austin, TX; Raleigh, NC; Portland, OR; anyone have any comments or advice for me?

I grew up and was educated in Ohio. I now live in Houston, Texas. We have been shielded by the economic mess because of a diverse economy, low taxes, and an unmeddling government. Granted the current President who is from Texas did not help the current economic situation.

"Ford equal to Toyota????

You are kidding, right?"

It's true. I think Buick is also ranked equal to Lexus in the yearly rankings that come out.

Hey FMF,

I don't think Obama is going to do anything with Granholm, especially considering the fact that she helped Biden practice his debate skills by pretending to be Palin in practice debates. Is Michigan's problems Granholm's fault? I know she's not the best governor, but she took over a huge deficit from Engler and somehow the auto industry's economic woes have been pinned on her. Don't worry, 'you're going to be blown away' sooner or later here.


@ Jeff-

Don't limit yourself to those locations. Look EVERYWHERE.

GE Miller,

She sure as hell hasn't done anything good. Taxes are high, the deficit hasn't come down. She has not had the foresight to see that the union contracts over the past 6+ years are going to kill the auto companies. She just hasn't done anything. She's had 6 years to make an impact and didn't. The only beneficial bill she passed was the Energy Bill signed in the past month or so. So yeah, I'd say at this point, she's formally adopted Michigan's and the Big Three's woes.

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