Tuesday, November 30, 2010

Making the Chevy Volt

Cool time-lapse video of the Volt on the line from start to finish. One thing to notice is the use of robots in assembly - a major factor in the increase of productivity and the decrease in automotive and other manufacturing jobs over the past few decades. While our main focus has been on offshoring, no one mentions how it's the robots who have taken over the place...



ICYMI: Yesterday GM held a Volt recognition ceremony at the Detroit-Hamtramck plant, basically a media event to officially launch the car, but also as a pat on the back and a celebration for the workers and officials who made it all happen. At the ceremony, CEO Dan Akerson announced that GM will be adding 1,000 jobs in the next two years, mainly engineers and others who will work in the area of batteries and electric vehicles. Chrysler also jumped in on the game, announcing that they too will be adding 1,000 hi-tech jobs to work on their new lineup - and that they are bringing back the popular Viper.

But the day really belonged to the Volt, and the symbolism it carries. Electric vehicles are the future, whether the nay-sayers want to admit it or not. The Volt is here, all the major auto manufacturers have electric models set for release very soon or at least within the next two years, the infrastructure is falling into place (when Cracker Barrel announces charging stations, can the rest of the world be far behind?) - and the best thing of all - Michigan will be the epicenter for development as this technology continues to move forward.

Today, the state has 17 companies that help make batteries for electric vehicles, projected to create 63,000 Michigan jobs in the next decade, Gov. Jennifer Granholm said Tuesday at a Volt celebration at the Detroit-Hamtramck plant, which builds the car.

More jobs are now on their way to an industry carving a path for a greener auto industry.

On Tuesday, GM and Chrysler announced plans to each hire 1,000 new workers, mostly engineers, as they ramp up production of new models. Michigan's manufacturing-related jobs already are increasing, with 467,000 jobs in October, up 33,000 jobs from a low of 434,000 in June 2009.

"I want GM to be in the forefront of these efforts, as the Volt demonstrates," CEO Dan Akerson told hundreds of workers and visitors gathered at the Detroit-Hamtramck plant. "It would have been easy, given everything that General Motors has been through in the last couple of years, to let the Volt die, but you didn't let that happen."


GM is dedicated to making this car at a profit while maintaining quality - both very good signs that management has changed its "go along to get along" slow and stodgy attitude of the past, and is committed to being proactive when it comes to developing and maintaining a successful and profitable product line. Right now, the Volt is close to the break-even point - but they aren't including the development costs. Working to reduce the costs of components will be the focus for engineers, and a big part of that will come with the mass production of the battery. LG Chem is looking to manufacture up to 60,000 batteries at its Holland plant by 2013 to supply the Volt and the Ford Focus, and they claim that they can double capacity for production with a year's notice. They also predict that the cost will drop by half within five to ten years.

They might want to consider this "notice" - meeting demand might be the biggest problem to start. GM is running a solid marketing campaign for this car, and 240,000 people have signed up to receive information on the web. And while the company isn't releasing initial order numbers, indications are the first run of 10,000 will sell-out almost immediately.

GM plans to build 10,000 Volts by the end of 2011 and at least 45,000 in 2012. Akerson said he has a gut feeling that demand will require additional Volts in 2012, so the company is studying ways to double or triple production. The plant is currently running on only one shift, when many of GM's North American plants are using three shifts.

"I have a sense that this is going to be ... a game-changer," Akerson said.


That may end up being the understatement of the year. It already is a game-changer, especially for Michigan.

Now we just need to keep working to diversify our economy. While all this automotive success is great news (and the November sales numbers to be released today are expected to rise 15-17%) - we can't forget the inherent danger of putting all our eggs in this one-industry basket again. In the meantime though, congrats to GM and everyone who made this happen - from the government officials to company management to the development engineers to the workers on the line and in the field, take a bow. It is well-deserved.

Detroit Metro Area Rated 7th in US in Economic Growth From 2009 to 2010

This was surprising, considering the time frame. The Michigan unemployment rate hit its peak in December of 2009, and yet at the same time apparently Detroit was starting to experience a return in economic growth as well. Or, at least was doing a lot better than other metropolitan areas across the world. Check these numbers - and then stop and think about how important manufacturing is.

The Detroit metropolitan area was rated seventh among U.S. metro areas in economic growth from 2009 to 2010, according to a new global study by the Washington-based Brookings Institution.

Ranked 46th in the world in the study, Detroit was mentioned as a metro area undergoing a recovery based on a rise in U.S. manufacturing.

Detroit ranked 146 out of 150 during the recession and 147th prior to it.

The study was done by Brookings in conjunction with the London School of Economics. It examined the global economy based on the performance of the world’s largest metropolitan areas prior to the recession, during the recession and during the current recovery period.

The study reports that overall the US is lagging in growth, especially when compared with China, and that there are only a few metro areas in the US that are starting to see significant recovery - but Detroit is definitely one of them.

Detroit was rated 147 out of 150 during the “pre-recession” period from 1993 to 2007, then rated 146 during the “recession” period from 2007 to 2010.

In the “recovery period” from 2009 to 2010, Detroit was rated 46, and trailed just six other U.S. cities.

The dates of the recovery and recession periods overlap because many areas are still in the midst of the recession while others are emerging, the study reported.

Detroit and 11 other U.S. metro areas were classified as being in a road to full recovery, while only San Antonio, Texas, was rated as having a full recovery. Most cities are either still early in a recovery or still in decline.

Not sure what they qualify as "full recovery", but whatever it is, we are on the way there. Let's hope the trend continues.

Grand Rapids First Heart Transplant

Meijer Heart Center


We've come a long way, baby. From WOODTV:

The first heart transplant to be performed in Grand Rapids happened Saturday night at Spectrum Health's Fred and Lena Meijer Heart Center, sources told 24 Hour News 8 on Monday evening.

A West Michigan man who turned 50 on Thanksgiving Day received a new heart just two nights later. He's doing well, sources said. 24 Hour News 8 knows his identity but has chosen not to reveal it.

The success of the surgery will have a major impact on the new heart and lung transplant program unveiled earlier this year at Spectrum Health.

In February, the program was approved by the state to perform these surgeries.

Spectrum has to perform 24 transplants within two years to maintain its permits. The program was set-up by one of the doctors who served Daddy DeVos in England back in 1997 - a story that brought some controversy at the time, as it was rumored that the elder DeVos "bought" his transplant overseas after he found it difficult to get on American waiting lists due to his age and physical condition. From the AP story:

Wealthy people may travel around the country looking for centers to take them, (U of M Dr. Keith) Aaronson said. "That's the extent, in the U.S., that money would do anything for you. But you can't buy a heart. If you try and corrupt the system, you'd have to corrupt a whole lot of people."

No comment. UNOS has its system in place, and it's doubtful Spectrum would risk the entire program with favoritism for the wealthy... right? Right. But as they say, "Trust, but verify". That's what regulations are all about - fairness.

Have some faith, and congratulations to my little town for hitting the big time.

UPDATE: The transplant recipient is identified, and coincidentally there is a DeVos connection...

The patient is Rahn Bentley, 50, the brother of former Buffalo Bills football player Ray Bentley, a Hudsonville native and sports broadcaster. Rahn Bentley underwent the transplant surgery at the Fred and Lena Meijer Heart Center, Spectrum officials said.

...

In September, Bentley attended a Rotary Club luncheon where Amway co-founder Rich DeVos, 84, shared his experience as a heart transplant recipient and his advocacy for organ donation. At the time, Bentley was identified as waiting for a heart transplant, as was Perry Charleston, who was wearing a left ventricular assist device.


Congrats and all the best to Rahn and the Bentley family; may this be the first of many life-saving operations performed in the area. WOOD TV reports that after the hospital has performed ten transplants, they will be eligible for Medicaid patients as well.

Sunday, November 28, 2010

Into The Mystic



It was nine years ago, the Sunday night of Thanksgiving weekend, that I received the call...

For the greatest friend I ever had - this one is for you Scottie. I know you would have loved it.

Autism Insurance Coverage Meets the Great Republican Divide

Last year, Senator Tupac Hunter (D-Detroit) introduced legislation that would require insurance companies to cover treatment for autism. Evaluations, physical and occupational therapy, early interventions - all covered to give these children a chance at a life where they would be able to care for themselves, and in turn decrease the chances that they would be dependent on the system or others for expensive care in the future. The bills also would help relieve the financial burden placed on families who need this treatment to help care for their children now. There has been a national movement in the past few years to require that insurance companies offer this type of coverage, and as of today, twenty three states have signed on.

So, what happened to all this great legislation in Michigan? It was met with obstruction from the Senate Republicans, of course. Here is Senator Hunter, in a special op-ed to the Detroit News, April 4, 2009. (now archived)

It's baffling to me that the Michigan State Senate Health Policy Committee, where these bills were properly referred last session, has been given a pass on taking up these very worthwhile bills.

It would seem that the chairman of the Health Policy Committee, a medical doctor, would best be suited to provide a professional medical opinion on policy that could help children who have been diagnosed with autism . Instead the bills have been referred to the Economic Development and Regulatory Reform Committee, where it seems the bills have been sent to "die." Also, the Republican-led Senate failed to address my bill to establish the autism tax check-off during our last session when I first introduced it, and none of my Republican colleagues signed on as cosponsors when I reintroduced it.

I urge Senate Republican Leadership to put politics aside and think of the needs of these children and their families.


Democrats in the MI House passed autism coverage in July of 2009. HB 4476 passed with bipartisan support 83-25, with the usual anti-government (and future Senate members) Meekhof, Hildenbrand, Jones and Schuitmaker voting against it, amongst others. HB 4183 passed 84-25, same names apply - and perhaps that is why a plea has to be made right now to make one last try at moving these bills through the Senate.

Republican Lt. Governor-elect Brian Calley has a three-year old daughter who has been diagnosed with autism, and this week he is going to meet with the Senate Republicans and make an attempt to break the logjam that has been created by his own party. He made a five-minute video in a plea to lawmakers to consider that "real people" would be condemned "to a life of dependency" if they fail to act.

But Calley is not speaking for the administration of Gov.-elect Rick Snyder, who is not taking a position on the legislation, a Snyder spokesman said last week. And the legislation, opposed by a broad range of business and labor organizations, remains a long shot for final action in the lame-duck session scheduled to end Thursday.


It's unclear which labor organizations are opposed to this legislation. Given the strong Democratic support for these bills though, you have to wonder if including "labor" in that sentence is simply an attempt to portray yet another false equivalency on the part of the press. Whoever they are, they didn't stop Democrats in the House from casting their votes in favor, and they didn't speak up for this story - but the Michigan Chamber of Commerce certainly did, and naturally they automatically resort to the standard teabag talking points. Also, in what may be a preemptive strike or a tip of the hand, watch MCoC president Rich Studley throw in other conditions that they would like to see eliminated from treatment as well.

Rich Studley, president of the Michigan Chamber of Commerce, said "these questions of insurance coverage should be decided in the workplace by employees and employers ... and not by government bureaucrats."

Studley said the specific provisions of insurance plans are best determined by those receiving and paying for the benefits. They might decide their resources are better spent on additional pay or pension benefits rather than insurance coverage for autism or mental illness or substance abuse, he said.


The money people have spoken, and so it shall be. Wish Calley the best of luck on his request, but since this version of the Republican Senate adjourns for good on Thursday, in all likelihood we will see another "no" from Bishop as he completes a Senate career that is only remarkable in the ways that he has hurt the people and the progress of the state of Michigan. Good riddance.

This issue does set-up what could be a very interesting dynamic that may play out for both the Republicans and the Snyder administration in the future though: Will the extreme members of a Republican-led legislature block common-sense measures such as this from seeing daylight? And, let's say those measures do somehow reach the floor, will Democrats then be called on to help pass legislation that would still be opposed by anti-government forces, but if passed also would be considered a "victory" for a Republican governor and a public that wants to see government work for them for a change?

Can the Republicans have it both ways? Looks like we may find out.

Friday, November 26, 2010

Will Michigan Gain the Renewable Energy Jobs That Other Midwestern States Leave Behind?

Elections have consequences, some of them unexpected. If we play our cards right, Michigan may gain from our Midwestern neighbors electing right-wing leaders that vow to either stall or roll-back progress for their states when it comes to energy policy, the zeal to defy "big government" as the current excuse for embracing more drilling and fossil fuel use. Let's be clear here, this is not a good thing for them or for the country as a whole. It's a tragedy that threatens us all in the long run. It would be much better to see everyone move towards a clean energy economy and create jobs and opportunities for business and citizens alike, all across the region. That being said though, we have to focus on our state and not worry about things beyond our control - and if other states are going to drive this business away, we should be there to welcome it with open arms.

Let's start with Indiana. Sometimes it's fun to look outside our own Michigan media bubble and see how other states view us. In this case, Indiana sighs with envy at our booming renewable energy business, and laments the opportunity they have lost by not implementing a renewable energy standard. This story comes from the Post-Tribune, which serves the industrial northwest corner of Indiana:

When it comes to renewable energy, economic development officials in Michigan could be laughing all the way to the bank.

Michigan's renewable energy policy has attracted billions of dollars in investments over the last two years while neighboring Indiana sat idly by. The developments are expected to create thousands of jobs in manufacturing -- a blow to industrial areas like Northwest Indiana.

The strategy isn't a secret, although Michigan officials aren't keen on promoting something that would take away their competitive advantage: The boom started in 2008 when Michigan passed a law requiring utilities to get 10 percent of their energy from renewable sources and energy efficiency by 2015.

"Since the adoption of the renewable energy standard in Michigan, we have attracted more than $9 billion in new investment in new alternative energy manufacturing business," said Michael Shore, spokesman for Michigan Economic Development Corp.


Have to beg to differ on the "aren't keen on promoting" statement. Seems we will take the "Hey Sailor" approach to anyone who even blinks in our direction. And if anything, our RPS is too low, especially when you consider that both Ohio and Illinois have set a much higher rate than we have. Both of those states are strong in manufacturing, and they are shooting for 25% by 2025. So far we are at 10% by 2015, same as Wisconsin - but we will get to recent developments in those states in a moment.

Legislation for a renewable standard has stalled in Indiana's legislature, with lawmakers trotting out the same old arguments that held us up for so long. Electric rates will go up, we need to include nuclear, blah blah blah - but what environmentalists suspect is that the coal lobby is undermining any attempts that will bring them competition. Meanwhile, the manufacturing jobs are going to Indiana's neighbors who have instituted a RPS, and that means us and Illinois, as the story points out. Indiana is still getting some renewable energy projects of course, but Governor Mitch Daniels, while promoting the state as a green energy leader on one hand, is also doing things like fighting federal cap and trade legislation, throwing around scary buzzwords like "imperialism" and "piranha swarm of green lobbyists wangling special exemptions, subsidies and side deals" in a WSJ editorial. His goal is to make Indiana a leader in clean coal.

Most importantly, we are out to be the world leader in making clean coal -- including the potential for carbon capture and sequestration. The world's first commercial-scale clean coal power plant is under construction in our state, and the first modern coal-to-natural gas plant is coming right behind it. We eagerly accept the responsibility to develop alternatives to the punitive, inequitable taxation of cap and trade.


Sure he does. Daniels has his own "inequitable taxation" deal going on right at home, as Duke Energy's new coal gasification plant in Edwardsport, Indiana has incurred spiraling cost overruns that will be paid for from the pockets of Indiana ratepayers. The $1.985 billion project cost initially approved by the Indiana Utility Regulatory Commission is now approaching $3 billion - and accusations of an ethics scandal have broken out, as three people have recently been fired when a citizen's action committee exposed that one member of the IURC left the board to take a job with Duke Energy. Fears are that insider deals with the company mislead citizens on the costs, and that Duke has mismanaged the project. Why does it seem like every time you start pulling on these Republican "big energy" threads, it always leads to some sort of corruption?

While Indiana looks at our RPS with envy and deals with this energy scandal, the right-wing takeover of the Ohio state government may lead to the Buckeyes repealing their aggressive renewable energy standard. Governor-elect John Kasich is being urged by the extremists at the Heartland Institute to heed the "Tea Party mandate" and move the state backwards when it comes to energy policy. He has indicated he just may do that. Kasich has swaggered into office before he has even been inaugurated, vowing to cancel Ohio's high-speed rail project and eliminate those jobs in a stunt reminiscent of Wisconsin Governor-elect Scott Walker's move to do the same in the Badger state. Other states such as New York have indicated they are more than willing to take the rail money that Ohio and Wisconsin have declined - a pertinent lesson (and warning) when it comes to the energy business as well.

When it comes to Wisconsin, words has it that they also will be taking a second look at their 10% RPS, threatening to delay the time line of implementation on renewables as they turn an eye back towards keeping their old coal plants up and running, and perhaps lifting the moratorium on nuclear facilities. Pennsylvania is another state that is leaning away from green energy and back towards fossil fuel use, with a Republican-led legislature there embracing coal and Governor-elect Tom Corbett vowing to open state lands up for natural gas drilling. Need more? Iowa's Governor-elect Terry Branstad and House Republicans there have threatened to dismantle the state's "Power Fund", which was instrumental in growing Iowa's renewable energy business. In recent years, Iowa had jumped to 2nd in the country behind Texas in wind energy, drawing jobs and manufacturers to the state. Now that may be in jeopardy.

Between Indiana's reluctance to embrace a RPS, Ohio and Wisconsin threatening to turn back the clock on their standards, Pennsylvania embracing coal and gas, and Iowa putting a damper on its growth, it seems that Michigan has a great opportunity to move forward and sweep up the renewable energy business these states are going to deny. Back to those Hoosiers, and the steps we have already taken to gain ground...

Shore makes no bones about the fact that in terms of the renewable standard, Indiana's loss may be Michigan's gain.

"The renewable energy standard by itself is only a first step. It's like a high school diploma or GED. You're not ready to be a professional in any field, but you can't realistically get there, or easily get there, without it," he said.

In 2009, Michigan supplemented the standard with tax credits for renewable energy development. To get the credits, companies had to go through a review. That helped companies when the federal government later offered stimulus funding, securing Michigan $1.3 billion -- a sizable portion of the $5.8 billion total investment in advanced battery technology.


The wild-card in all of this is Governor-elect Snyder and our Republican legislature. Snyder has embraced our renewable energy law, and that is a very good sign that he will continue to explore business opportunities in that area. Michigan may find itself in a position to pick up the jobs that our neighbors turn down - if we are smart enough to recognize what is happening here, and move fast to beat other states to the punch.

Thursday, November 25, 2010

GM Ad: We All Fall Down



This is a classic ad - and it's only running today. Goes great with the news I blogged at BFM yesterday:

GM to Rehire 200 Workers for Flint South Plant, Invest $163M in the Midwest

Here is some good news to kick off your holiday weekend:

General Motors delivered good news to the city of Flint — they plan to rehire nearly 200 workers at the Flint South plant, in addition to the 160 people already hired.

The automaker is investing $163 million in three Midwestern plants, including the plant in Flint. WWJ’s Florence Walton reports that an estimated 135 jobs will be saved right in the city.

Bay City and Defiance, Ohio are also in line for the investment, as GM is going to double production on its 1.4 liter Ecotech engine to 1,200 a day.

The 1.4-liter engine is the standard engine in the Chevrolet Cruze, and a turbocharged version of the engine recently went into production that can achieve 40 m.p.g. in highway driving.

The Ecotec engine is also mated with the battery pack that powers the Chevrolet Volt. GM also plans to use it in the redesigned Chevrolet Aveo, scheduled to launch next year at the automaker's Orion Township assembly plant.

Gotta love Senator Debbie Stabenow's quote on this:

“It’s about making sure we have a long-term commitment to the words ‘Made in America’ and frankly I want it to say ‘Made in Michigan,’ ” she said.

Yeah, me too. In other GM news, the company cut a check to the US Treasury for $11.7 billion from the sale of 358.5 million shares of stock on Tuesday. Not bad for what was predicted to be an "endless bailout".

Happy Thanksgiving GM. Keep up the good work.

Wednesday, November 24, 2010

The Wild Turkeys of the Eastown


wildturkey04
The Wild Turkeys of the Eastown. Once upon a time we had a flock of turkeys that roamed the city streets around here, and I happened to cross paths with one on my way home from the store one day back in 2004. Part of the reason I always lug my camera around with me - you never know what you will see!


Hope this holiday finds you happy and safe. Some recent news to be grateful for on this day:

  • U of M's index of consumer sentiment hit a five-month high of 71.6 in November, indicating that retail sales should be strong this holiday season. The Michigan Retailers Association is predicting a 6% increase in sales this year in the state, with strong holiday hiring already taking place. Spending rose 0.4% nationwide in October and grew at a 2.8% pace in the July - Sept. quarter, the highest bump in nearly four years. All good news; consumer spending accounts for 70% of our economy.

  • Want to support home team this holiday shopping season? Check out the Made in Michigan Movement website, featuring their second annual holiday gift giving guide, now available for download. Lots of food, beverages, soaps, and other Michigan made items are listed for your consideration. Another great site for gift ideas is the Pure Michigan Store featuring all kinds of merchandise with the Pure Michigan logo. All items are made in the USA, and a portion of the proceeds will go towards funding the advertising campaign - since the Legislature won't fund it, looks like we have to do the job ourselves.

  • Motor Trend's Todd Lassa absolutely destroys Rush Limbaugh for dissin' the Chevy Volt. It's a must read. Here's a taste:

    All the shouting from you or from electric car purists on the left can’t distort the fact that the Chevy Volt is, indeed, a technological breakthrough. And it’s more. It’s a technological breakthrough that many American families can use for gas-free daily commutes and well-planned vacation drives. It’s expensive for a Chevy, but many of those families will find the gasoline saved worth it. If you can stop shilling for your favorite political party long enough to go for a drive, you might really enjoy the Chevy Volt. I’m sure GM would be happy to lend you one for the weekend. Just remember: driving and Oxycontin don’t mix.

    Oh snap. Dude, ever consider running for office? We could use a few like you.

  • Other Volt news: The EPA has rated the car at 93 m.p.g. in battery mode, and has certified that the battery pack can reach 379 miles before recharging. Question: Will we see the "miles per gallon" designation disappear in the future?

  • More electric car charging stations coming: ChargePoint will be installing 350 across Michigan, including 50 in the West Michigan area. A federal grant is helping to set-up these stations in high-traffic areas, and they will work on any model of plug-in vehicle. Individual users must set-up a ChargePoint account to activate the charger, and the price will be anywhere from free to for-profit, depending on the determination of the owner of the station.

  • Zeeland automotive supplier Gentex announced that they will be adding 240 more jobs in a new expansion, buying up the old the Invensys Controls plant. This will allow the company to increase capacity 20% in the coming year. Gentex will be holding a job fair at Holland's Doubletree Hotel on December 8th - check the link for details.

  • The state's first video game tax break was awarded to Pixofactor Entertainment, who will build a golf game for Nintendo's Wii system. "Ben Hogan Golf" will be available in time for the 2011 holiday season, and the company will be hiring 20-30 Michigan artists, animators and programmers to create the game. Video game development deals are a part of Michigan's film incentives.

  • Turns out the metro Detroit area is the new hot-spot for smart phone app-makers. Low cost office space has drawn start-ups to WSU's Tech Town, with new companies expected to reach 25 to 30 next year. Ann Arbor is also seeing demand for students with knowledge in the industry. The field might not create a large number of jobs, but helps with our brain-drain problem.

  • Consumers Energy’s Lake Winds Energy Park in Mason County is moving forward, recently signing major contracts for construction and supply, and has presented them to the Michigan Public Service Commission for approval. Under the contract with White Construction, "the majority of construction jobs and material purchases will be sourced from within Michigan". Good deal. 150 jobs is typical on this type of construction site. The park should be up and running by 2012.

  • This always make me smile: Congressman Hansen Clarke. There is no doubt in my mind that he will be a great public servant for his district and our state. Go read the story to see why.

  • How about a little Asian carp ice cream to top off dinner today. Sound good? The West Michigan Environmental Action Council and San Chez Bistro restaurant in GR will be hosting the "Fight ’Em & Fillet ’Em" dinner event this coming Tuesday to draw awareness to Great Lakes invasive species. A $40 donation gets you all the carp creations you might ever want to try - and maybe even a few you don't.

  • Speaking of donations, on this day of feast remember that hunger is a growing problem in our state and country. The Food Bank Council of Michigan reminds us that 12% of households are struggling to put food on the table, and nearly 1 in 6 children is at risk of hunger. Their goal for 2010 is to provide 4.2 million meals for hungry families and children in Michigan. You can help them reach that goal at FeedMichigan.org.

    That's it - I'm off to hide under the blankets on the couch and watch lots and lots of football, hope you have a great weekend!
  • Nothing Left to Cut: Some Facts Behind the Coming Michigan Budget Crisis

    Like the Senate Fiscal Agency report on the real numbers behind Michigan's low-to-middle tax rates, the truth behind the state budget and how much we have cut in the past 10 years has so far not drawn a lot of attention in what is left of the mainstream media. Gary Olson, outgoing director of the SFA, spoke at the recent economic outlook conference at the U of M, and brought some fiscal reality with him that the "cut government spending" crowd neglected to mention in their campaign commercials this year.

    Let's start with the hard one: Tax expenditures. Peter Luke has been hammering on these as well, and if anyone knows how we curb tax incentives and still be competitive with other states as far as attracting economic development, it's time to get those ideas out there.

    Olson pointed to a variety of statistics, notably that tax expenditures - exemptions, credits and other tax breaks - totaled $26.2 billion in the 2009-10 fiscal year, compared to $14.1 billion in 1999-2000. The current figure is more than double revenues received from state sources.


    Simply having low tax rates won't cut it, as any serious economic development official can tell you. We need incentives. Can they be trimmed back? Good question - one that can only be answered by what other states are offering. Given that many are facing the same budget problems that we are, it will be interesting to see how a bunch of Republican governors compete with each other in the coming years. Stay tuned.

    The next figure to look at is the stunning drop in revenue to the state. If Dick Headlee were alive he would probably be shocked at this one.

    He also pointed to the state being $8.8 billion under the revenue limit set by the Headlee Amendment after it exceeded the limit by $159.7 million in 1999-2000.

    "The size of the state budget in relation to the size of the Michigan economy has significantly declined in the last decade," he said, adding that he tells legislators, "If your goal over the last decade has been to shrink the size of state government, consider it a remarkable success because it has occurred."


    And still the teabaggers insist on more, even though state spending has dropped considerably below the rate of inflation...

    Olson said spending from state sources of revenue went up during the decade by $578 million, or 2.3 percent, while the Detroit Consumer Price Index went up 22.7 percent.

    He questioned those who say the state needs to eliminate entire programs to eliminate the $1.58 billion gap between available revenues for the 2011-12 fiscal year and existing spending.

    "I've heard it all before," he said. "We've done a lot of downsizing over the last decade. I seriously doubt there's a huge amount of money to be saved from eliminating state programs."


    And what does he prescribe? Keep in mind this is a guy with two decades of experience in analyzing the state budget...

    The state also needs to broaden the base of the sales tax to service and could do so in a way that is revenue-neutral by reducing the rate of the sales tax, Olson said. But the 2007 debacle when the Legislature and Governor Jennifer Granholm threw together a services tax in the middle of the night may have crushed that issue for the long-term. The governor and Legislature swiftly repealed the tax, and Granholm's attempt to revive a services tax this year went nowhere.

    "That needs to be done," he said. "I thought in 2007 after they botched that job it probably put that on the shelf for about 10 years."


    Not so sure "revenue neutral" will do the trick in the face of many cities and school districts teetering on bankruptcy at this point, but once again we see the idea of lowering the tax rate and broadening the base brought up - something that both Governor Granholm and the Business Leaders have pushed for, but unfortunately an idea that the Legislature refused to consider. (And if you want to know how the service tax debacle went down in 2007, be sure and read this diary that explains how tax rates were held hostage by Republican leadership, who intended to make Democrats pay the biggest political price they could for their votes.)

    Rick Snyder seems to think that by simply eliminating the MBT and replacing it with a flat rate corporate tax we can also eliminate the need for "tax expenditures" - but his plan seems to rely too much on magical thinking, and also would cut another $1.5 billion out of a budget that is already $1.6 billion or so short. Even if it all worked out like he thinks, it certainly would take years for it to kick in, and we need this money by next September 30th.

    What to do? The DNews gives us another clue today - perhaps we can sell off state services to the lowest bidder. The Department of Human Services is one area facing a huge crisis with the retirement of thousands of state employees - 12% of its workforce - and they are scrambling to fill positions that take a year of training to learn. Snyder once again in non-committal about replacing retiring state employees...

    Snyder said he will take a wait-and-see approach but is sensitive to demands generated by Michigan's battered economy.

    "There are a lot of caseloads out there," he said at a recent news conference in Lansing. "People have needs, and we need to be sensitive about that."

    Options under consideration include working "with third parties in the interim, or as a longer-term solution," Snyder said.


    ... or in other words, "privatization". Get ready, here it comes. It's debatable that privatizing services will actually save money, but chances are certain campaign contributors would love to promise us that it will.

    And hey, we got this great bridge we can probably sell...

    Tuesday, November 23, 2010

    Snyder's Stance on Gas Taxes Will Cost Michigan Thousands of Road Construction Jobs

    Peter Luke pointed out right after the election that the Republicans will now be forced to take responsibility for what happens next concerning budget decisions that weigh on Michigan's economy...

    The benefits of divided government for the Republicans was that they were able to defer difficult decisions with the best of them. When those decisions weren't deferred, Republicans were able to sit back while the Democrats put up the nasty votes to raise revenue. If voters were unhappy about it, Democrats led by Gov. Jennifer Granholm could take the blame. And though Democrats often bailed when Republicans cast the tough votes to reduce spending, Granholm's signature on the end product made her chiefly responsible.

    It was a win-win for the Republicans, but Tuesday's results mean the responsibility of governing will be all theirs. Democrats likely to be buried in the minority for a few election cycles appear inclined to let the Republicans discover what happens when the thrill of victory begins to fade.

    Consider the thrill fading as of... now! Since Mike Bishop and the Senate Republicans refused to address the issue of federal matching funds and road construction jobs back when it was first brought up almost one year ago...

    Matt Marsden, press secretary for Senate Majority Leader Mike Bishop, R-Rochester, said, “We do recognize that there's issues there, that we need to deal with that, and it will be dealt with before 2011. But I'm not sure that a tax increase, across the board, is the answer.”

    Oops! Ran out of time. Maybe shouldn't have made that promise, eh Senator Bishop? Even threats from the Michigan Chamber of Commerce couldn't move the Do-Nothing Republicans to act on the problem, so now the loss of nearly 8,000 road construction jobs will be put on Rick Snyder's tab. Let's thank the DNews for reviving the story today...

    MDOT is predicting funding losses of $120 million to $160 million per year from 2012 to 2015. If it can't come up with matching funds, it could mean the loss of $575 million to $800 million in federal funds for each of those years.

    "That will mean not fixing 600 bridges, the cancellation/postponement of 180 road projects covering 385 miles of roads. Plus, we will cancel maintenance projects slated for more than 600 miles of roads," MDOT's Shreck said. "In 2011, our budget will provide 15,800 construction jobs; but in 2012, that will drop to under 8,000 every year until at least 2015."

    And what is getting to be a very predictable and vague non-answer from the Snyder camp is issued in return...

    Gov.-elect Rick Snyder has repeatedly indicated he is not in favor of a gas tax hike, said his spokesman, (Bill) Nowling.

    "It's not something we need to focus on," Nowling said. "It could bog us down from making tougher tax decisions, like how do we make the overall tax situation in Michigan more palatable so Michigan is a place where businesses can locate and grow?"

    Yeah, well, you would have thought that the Republicans had an answer to the "overall tax situation" before they canned the SBT way back in 2006 and then proceeded to stall on the issue for months...

    Bishop said lawmakers have plenty of time to work on alternatives to the state's Single Business Tax, which will die at the end of 2007.

    "We don't want to rush to any conclusions, and certainly there are a lot of ideas out there," Bishop said of a new business tax. "But this is all too important to rush to a final decision too quick."

    ... but then came up with the MBT, hailed it a success, until they hated it for a campaign issue in 2010 of course, and now we find they still don't have a solid plan for business taxes and how they relate to the overall budget difficulties. So, wave bye bye to thousands of jobs and millions of dollars, and hello to crappy roads that will get more expensive to fix as time goes on. "Business" surely can't be happy with this development. Will the Chamber re-issue their threats anytime soon?

    Chickens. Roost. You know the drill. Although, we should just get this over with, secure the federal funding and all those jobs by and raising the gas tax already, it might be fun to watch the Republicans twist in the wind from their own revenue obstruction tendencies. Maybe Luke was right, and the Dems can just hold back for a bit - or better yet, start pointing the simple truth about Republicans and lost jobs out to the press. After all, isn't job creation what this is all about?

    Forever Playing D

    Visit msnbc.com for breaking news, world news, and news about the economy



    As I recently mentioned, in the past few years it has become a rare occurrence for me to watch the talking heads on cable or network news for any length of time. Odd for a person that was once addicted to CNN back in 'da day, but as the medium turned away from information and more towards the "infotainment" of turning the news into so much gawking over celebrity and sensationalism, I slowly lost interest. It's shrill, it's shallow, and I'm bored. But, if there is a topic I've taken an interest in, I can force myself to watch this stuff, however painful it may be. Michigan stories hold my attention. The GM IPO last week was one such occasion, if only to enjoy the sense of "told ya so" satisfaction, and watch them trot out smiley happy Governor Granholm to make some comments on what must have felt like such a great relief after spending much of 2009 wondering if the entire state was going to go over the cliff. Gotta take these victories when you can and enjoy them.

    When I do watch these segments, I'm always struck at how the right-wing talking points have worked their way into accepted conventional wisdom. Yes, there are sites such as Media Matters and bloggers like Digby (my new hero - how she can listen to Beck and Limbaugh and not go insane is beyond me) who point this out on a daily basis, but if you don't watch regularly, you forget how pervasive it really is.

    Three appearances in total. After watching the Bloomberg segment on GM in the morning, I felt that familiar feeling of the blood pressure rising (transcript here), so I'm going to pick on them in particular to start.

    SCHATZKER: Governor, GM is not a ward of the state anymore, as you know. It's a public company with a fiduciary responsibility. How do you stop GM from doing what is right for shareholders, but what is wrong for Michigan?


    Why is it an either/or proposition? This question automatically pits the "shareholders" vs. "the state" (or to be specific, workers in the state), when the reality is that GM should strive to work for the benefit of both. The Governor points out that the jobs saved and/or created are indeed good for Michigan and American manufacturing. Sales = production = jobs = more sales = profits = happy shareholders. Or am I missing something in this equation? Yes, if you want to infer that the "right" thing for the shareholders would be to leave American workers behind. The question only reinforces the "profits over people" mentality that has spread like a sickness over our current culture. Don't people matter anymore? Do we want a nation filled with masses of poor and unemployed folks? How is that healthy for the country as a whole?

    Moving on, we quickly jump to the now infamous "some people say" line of questioning, and funny how those "some people" are always channeling someone like Dick Shelby...

    SCHATZKER: Governor, the word partnership raises alarm bells in some quarters. We heard it yesterday from Senator Debbie Stabenow. She used it to describe the IPO and the bailout as a new partnership with industry.

    You know that there are people out there who listen to the word partnership and think this is going to be the bailout that never ends, we're just going to be giving away tax breaks and grants to GM and Chrysler, perhaps, from here to eternity. Is that what's going to happen?


    I know this might shock some people, but Governor Granholm doesn't have the ability to foresee every possible event that may happen "from here to eternity". Which is too bad, really, because we could place some bets on sporting events and be set up for life. This absurd question can't be answered of course, and was just a vehicle to raise the "endless bailout" talking point that Republicans in Congress used to try and kill the assistance in the first place. Why is it assumed that a "partnership" would be a drain? Because government is always "bad", of course!

    The next question was better, asking how we keep the jobs in America in the face of competition and GM's foreign investment, and the answer is quite simply that as long as the playing field on trade in uneven, we have to give incentives. Labor costs, tariffs, foreign governments propping up their industries with cash - this is going to be the new norm in a global economy. That's why the push for fair trade is so important, and it's something we have to do from here on out. Striving for balance is the name of the game, and it's going to be complicated.

    Moving on, here comes the big one - the specter of the big, bad, scary UAW, and all those working folks that may want to improve their lot in life on the future... the horror!

    Governor, a question for you about the unions. How are you going to handle this issue? The union members are your constituents. They're the citizens of Michigan, the residents of Michigan. At a certain point, they're going to want more from General Motors and Chrysler. And you know as well as I that as soon as they start asking for more, those companies are going to start thinking about whether those jobs should be in Michigan. How do you handle that question?


    This could be a fair question if asked correctly, but it wasn't. It chooses to ignore the sacrifices that the UAW has already made - and they made them well before the bailout occurred. Parity with foreign automakers in America was reached with the contract of 2007, something that the media loves to overlook when discussing this issue. Or, the fact that the UAW has taken over the health care costs, another important step at keeping these companies competitive. All happened years ago, before the economy crashed, but the CW still seems to be that we need to keep American workers "in their place" - or everyone will pack up and leave. It's the threat that keeps on giving. Governor Granholm gave props to the UAW and Bob King, and points out that labor is only 7% in the total cost of a new car - but the question, as phrased, tells us that the union-bashing will continue in the business media, the facts of the matter ignored.

    One more stale "some people say" meme to float again before we leave...

    "SCHATZKER: And one last question for you, Governor, about Ford. Some people are concerned that the playing field will not be level eventually, that because GM and Chrysler got a bailout, Ford is going to be at a disadvantage. Do you think there's any truth to that?


    Although Ford itself raised this question back when the argument for bailout of the others was being made, they certainly didn't push the issue because they realized that a) they would go down if GM and Chrysler went down, and b) they had the marketing advantage not receiving "taxpayer money" - putting them in the catbird seat as far as public opinion goes. You could say that Ford had a bigger advantage than GM and Chrysler - especially if this had all gone bad on us and the bankruptcy proceedings dragged out longer than they did. So, don't shed any tears for Ford. They played their cards right, and they are going to be just fine. They know it, and that's why you don't hear them complaining.

    So, that was Bloomberg, still advancing the following ideas: We need to protect the shareholders at all costs, the bailout will never end, wages of American union workers will push companies to leave the country, and that Ford was somehow a victim of this bailout.

    CNBC's Squawk Box wasn't much better. Basically, Quick started off with a positive, saying this was "huge news" and asked Governor Granholm a very open-ended "how do you see this" question. Off she goes. Smart interviewers don't do that with the Governor, because she will fill your ear and won't stop. After that, Quick tried to get Granholm to somehow guarantee GM's success, again asking to project into the future on staying profitable, and "how do you make sure that happens" - like any one person has control on that. Governor reeled off all the positives, labor contracts, good management, whips out the electric vehicle and falls back on the standard talking points she has used in the past. After all that, then Quick asked the same question again, emphasizing the words "make sure" over and over - as if one more time would bring the magic answer. Is there any company out there that can guarantee with rock-solid certainty that they will be profitable five years out? GM may deserve scrutiny for a bit to "make sure" they don't fall back into their old bad habits, but this line of questioning wanted to force the impossible - and perhaps set them up for blow-back, if something bad were to happen down the line. Message sent: Invest at your peril. But isn't every company like that?

    Then we turn to the final MSNBC "Hardball" video above - and again, it starts off with "what does this mean for you (Michigan)" and a reference to the taxpayers being paid back in full as a "fair barometer" of success. Right after that though, we go back to the "some people say" question that seeks to paint President Obama with some nefarious motive behind saving the auto industry - which the Governor smacks down with a laugh...

    You heard the President at the outset of this conversation where he said that 'Look, I'm already dealing with two wars, I don't want to be in the banking business and I don't want to be in the automotive business', and yet the suspicion lurks in some quarters that he does want to be in all of these things... address that issue from a political standpoint... (Governor interjects at this point)


    When President Obama walked into office, the house was on fire. Wall Street, autos, economy bleeding thousands and thousands of jobs, the housing crisis, you name, it was in flames. If you go back to that time (or read Rattner's book) you will clearly see that the White House never wanted to be in the auto business and emphasized that they would be as "hands off" as possible, and the whole affair seemed rather distasteful and a nuisance to him. The only people insinuating that he wanted to be involved were those that were seeking to spread the "socialist" meme - and here it still exists today, even though it was complete and utter bullshit then, and is complete and utter bullshit now. Why bring it up?

    Moving on to Bob King's segment, we will give points to MSNBC for bringing up the fact that the Republicans in Congress had blocked the extension of unemployment benefits that day, but the question then became another "some people say" moment...

    Do you believe that at any point, the perpetuation of unemployment benefits become a disincentive for individuals to find work? You know that argument and I would love to hear your response... (King interjects at this point)


    Yet another right wing talking point, that people who were taking home 3-4 grand a month would just love to drop down and live on $1200 or so and sit around and do nothing and risk losing their home. It's crap, King told him so - and then put in a pitch for public works jobs and building our infrastructure here in America. Oh yeah, he's good, and I'm glad to see him out there whenever the auto industry and media collide.

    So all in all, a day spent on defense of talking points that were established by the Republicans long ago, talking points that obviously will not die. One has to wonder though: If the framing on saving the auto industry had initially been one about saving jobs and American manufacturing, a point of pride instead of a point of shame, and these kinds of questions would have been dismissed from the start, would the White House have gained the upper hand on the entire conversation? Hard to tell, but it certainly would have been worth a shot.

    Democrats need to learn to play offense, set the tone, stand for something, anything - and hammer it home. On things like this, on other issues as well. If they don't learn that lesson and learn it soon, this will continue to get worse as time goes on, and 2012 will be a gigantic nightmare.

    The Republicans have no problem spewing falsehoods and nonsense, why is it that the truth is so hard to sell?

    Sunday, November 21, 2010

    Michigan History: Fayette Historic State Park



    A while back, John Lindstrom of Gongwer wrote an essay about the preservation of Michigan history; how it tied into the campaign promises of those running for office this year, how easily it can be lost due to such things as budget cuts (and I would add privatization), and the transitory nature of people and culture itself. He focused on the loss of the Michigan State Fair, but I immediately thought of the Fayette Historic State Park in the UP.

    Nearly 20 miles off the beaten path of US 2 on the Garden Peninsula, Fayette was a "company town" built by the Jackson Iron Company in 1867...

    The location for the village of Fayette, around Snail Shell Harbor, was chosen for its protected, deep port, the limestone, and the hardwood that covered the entire region. The limestone and the lumber was used in the smelting process and was essential. Fayette was founded in 1867 by the Jackson Iron Company. The only reason the town was built was to extract iron from the iron ore mined nearby. The settlement by Snail Shell Harbor was purchased from a local land owner in 1864. A total of 140-acres made up the town-site. The town was named after Fayette Brown, the Jackson Iron Company agent who chose the site. The town site soon housed two blast furnaces, a large dock, several charcoal kilns, a hotel, a company store, and many houses. The whole village was owned by the Jackson Iron Company, and workers rented houses from the company and bought goods from the company store. At the height of the smelting operation nearly 500 people lived in the area. Most of these residents came from Canada, Great Britain, and northern Europe. These workers produced a total of 229,288 tons of pig iron in 24 years.

    Stop and think what that must have been like - you're an immigrant in the middle of nowhere, essentially owned by a company, and you work in blast furnaces, or cutting lumber, or chiseling limestone, or any of the jobs in what must have been a very physically demanding and grueling life. No cars, no electricity, certainly no labor laws or regulations, no nearby hospitals should you get hurt doing any of this work - it was probably a pretty tough life, even though you had a tight community of family and friends and were surrounded by such natural beauty everywhere you looked.

    Like many cities and towns in Michigan, Fayette eventually fell to the fortunes of economics. Calumet with mining. Muskegon with lumber. In our modern day, Flint and Detroit with autos. They rise, they decline, the process repeats over and over again. In the case of Fayette, they had cleared the surrounding land of the lumber that was used in the process to make the pig iron, and then they discovered a cheaper way to make the iron altogether - and the charcoal kiln process became history. The company closed the furnaces and left, and over time, the town dried up as people moved on to find work. The state of Michigan made the area a park, and with help from colleges and preservationists, work began on refurbishing the buildings and bringing this ghost town back to life. Today, it is a living museum of sorts, with artifacts from the era and guided tours of the grounds, as well as diving and camping and skiing in the surrounding wilderness. You should go see it sometime, and plan to spend a day walking the area. It is stunningly beautiful.

    You have to wonder though - had we left this to the "free market", would it still exist? Hard to tell. Chances are, no. It's not on a main route, there aren't a lot of other things on that peninsula to bring people down there. Farms and hunting camps, and that's about it. Without the state stepping in, this piece of Michigan history would have been lost to us forever.

    So back to Lindstrom's question: Does the past matter? Is Michigan culture and history important to us? Are we willing to pay to keep places like Fayette from the hands of those who would let it fall to ruin, or sell it out if they couldn't turn a profit on it? For now, it is still part of the state parks system. The new Recreation Passport license tag, if successful, will help fund the effort, or perhaps the History departments of our universities will step in, if need be.

    It's something to watch though, and something we should guard if it is threatened by the "privatization" crowd coming into power now. Don't let them sell our history for a quick buck. We owe it to future generations to preserve places like Fayette, and other historical sites in Michigan. Buy those tags and help the state park system, and keep your fingers crossed that greed doesn't destroy our heritage.

    Saturday, November 20, 2010

    Duck and Cover



    Hard to believe that the Republicans would mess around with our national security... oh, wait. No, it isn't. They are just that determined to cause as many problems as they can for President Obama, rest of the country be damned.

    What was nice about this address is that the President is willing to name names here. He's waving around those flaming liberals like Ronald Reagan and Dick Lugar as proof of the nuttiness being displayed by Senator Kyl. You go, Mr. President...

    Indeed, since the Reagan years, every President has pursued a negotiated, verified, arms reduction treaty. And every time that these treaties have been reviewed by the Senate, they have passed with over 85 votes. Bipartisan support for New START could not be stronger. It has been endorsed by Republicans from the Reagan Administration and both Bush Administrations – including Colin Powell, George Shultz, Jim Baker, and Henry Kissinger. And it was approved by the Senate Foreign Relations Committee by a strong bipartisan vote of 14-4.

    Over the last several months, several questions have been asked about New START, and we have answered every single one. Some have asked whether it will limit our missile defense – it will not. Some, including Senator Jon Kyl, have asked that we modernize our nuclear infrastructure for the 21st century – we are doing so, and plan to invest at least $85 billion in that effort over the next ten years – a significant increase from the Bush Administration.

    Finally, some make no argument against the Treaty – they just ask for more time. But remember this: it has already been 11 months since we’ve had inspectors in Russia, and every day that goes by without ratification is a day that we lose confidence in our understanding of Russia’s nuclear weapons. If the Senate doesn’t act this year – after six months, 18 hearings, and nearly a thousand questions answered – it would have to start over from scratch in January.

    The choice is clear: a failure to ratify New START would be a dangerous gamble with America’s national security, setting back our understanding of Russia’s nuclear weapons, as well as our leadership in the world. That is not what the American people sent us to Washington to do.

    There is enough gridlock, enough bickering. If there is one issue that should unite us – as Republicans and Democrats – it should be our national security.

    Some things are bigger than politics. As Republican Dick Lugar said the other day, “Every Senator has an obligation in the national security interest to take a stand, to do his or her duty.”

    Senator Lugar is right. And if the Senate passes this treaty, it will not be an achievement for Democrats or Republicans – it will be a win for America.


    Anything else going on today? I'm off to see if "The Day After" (which aired 27 years ago today as a matter of fact, and you really had to be there to understand the massive national hype that surrounded what turned out to be a really cheezy disaster movie) is available on the 'net, and relive those glory days when we thought imminent nuclear destruction was right around the corner...

    Thursday, November 18, 2010

    US House Republicans Block Unemployment Extension

    Tax cuts for the rich? No problem. Don't even have to pay for them. $300 a week for millions of unemployed folks for a few months? So sorry, can't do. Ladies and gentlemen, a preview of your new United States House, already in action...

    Republicans in the House have blocked a bill that would have extended jobless benefits for the long-term unemployed beyond the holiday season.

    The most recent extension of jobless benefits expires Dec. 1. Two million people will lose benefits averaging $310 a week nationwide by the end of the year.

    The measure would have extended jobless benefits through the end of February at a cost of adding $12.5 billion to the nation's debt. Republicans opposing the measure said that the measure should be paid for by cutting unspent money from last year's economic stimulus bill.

    Roughly two million Americans will lose benefits before the end of the year. What does it mean for Michigan?

    WWJ’s Lansing Bureau Chief Tim Skubick says the numbers are staggering.

    According to Norm Isotalo of Michigan’s Unemployment Office: In “September 2010, we estimate that 47,000 workers will exhaust their unemployment benefits. In October, it’s gonna be 48,900. In November: 46,700; December: 45,000. In January: 62,600.”

    Around 250,000 through January, and I believe the number is somewhere near 400,000 by March. That's twice the size of the city of Grand Rapids, left with no income whatsoever.

    Rep. Dingell delivers the smack-down in this release:

    Congressman John D. Dingell (D-MI15) today blasted House Republicans for blocking passage of H.R. 6419, the Emergency Unemployment Compensation Continuation Act.

    “I was pleased to support my dear friends Chairman Levin and Congressman McDermott in cosponsoring this bill because the people of Michigan desperately need this extension in order to support themselves and their families while Michigan’s economy recovers. I am, however, very frustrated that Republicans in the House would block an extension of unemployment benefits. Without today’s extension 150,000-180,000 Michigan workers will be without unemployment benefits during the winter months. This is simply unacceptable.

    “We have seen steady improvement in Michigan’s economy since passage of the American Recovery and Reinvestment Act – our unemployment has declined every month thus far in 2010, the manufacturing industry has witnessed job gains consistently since 2009, and Michigan continues to attract companies in new and promising industries like wind turbines and advanced battery manufacturing. However, many Michigan workers are still hurting and struggling to find employment. I find it just horrifying that Republicans would block aid for families desperately in need, especially near the holidays and the cold winter season.

    Merry Christmas, signed, The Republicans.

    Good luck America, you're going to need it.

    UPDATE: From the Roll Call, we have MI Reps. Camp, Miller, Rogers, Upton, and Hoekstra all flipping the bird to their unemployed constituents. Ehlers and McCotter voted yes.

    A Shiny New GM



    Back when I first turned my attention to writing about state issues, I remember thinking, "I hope I can stay away from the auto industry". Ha ha ha! That was a good one.

    And here we are today, two years through the fire and rising from the ashes, a shiny new GM is born. Kids, this has been one helluva ride.

    General Motors is returning to life as a public company Thursday with a stock offering worth potentially $23 billion, ending the government's role as majority shareholder and closing a remarkable chapter in American corporate history.

    The U.S. government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 percent to about 33 percent.

    The IPO could wind up as the largest in history. GM set a price of $33 per common share on Wednesday, a day after it raised the number of shares it will offer to satisfy investor demand. When the U.S. government and other owners sell their shares, they'll raise $18.2 billion. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.

    Together, the sale of common and preferred stock will bring the deal's value to a record $23.2 billion.


    As of now, a phenomenal success story - but it came at such a price. The loss of thousands and thousands of jobs across the Midwest doomed the Democrats in the elections as the economy is just now starting to recover, and the shell-shocked and economically battered voters turned their states over to the people who would have let the industry die in the first place. Hard to figure. People looking back at this time in history will probably scratch their heads and go "Huh?", and anyone who lived it will shrug their shoulders and say, "Timing".

    As of now, I have a very real fear that the Republicans will try and tank the economy so they can blame Obama in 2012. It will be Michigan Writ Large in Congress starting in January, a bit more complex of course, but already the signs are starting that the "Just Say No" crowd has been rewarded for their obstruction and will only accelerate their efforts. No more aid to states that are still bleeding, Republican governors vowing massive cuts this coming budget year, no more extensions of unemployment to millions that will now turn to those states and find little to help them, this so-called "austerity movement" threatens not only a fragile US economy, but a fragile world economy as well.

    What will that do to auto sales? Who knows. One can only hope we have enough forward momentum to rise above those who seek to destroy so they can regain power.

    For today though, smile at this success, and wish GM all the best. The lessons learned from this difficult time should serve them well.

    rencen4278
    Ren Cen, Summer 2008

    Wednesday, November 17, 2010

    Auto Industry Bailout Saved 1.14 Million Jobs

    This comes from the people who know about such things, the Center for Automotive Research in Ann Arbor.

    Government assistance to General Motors and Chrysler enabled orderly bankruptcy proceedings and led to the saving of more than 1.14 million jobs in 2009 alone, according to a new study from the Center for Automotive Research, an Ann Arbor-based nonprofit research organization.

    The research also showed the bailout averted huge unemployment and welfare payments and as a result is already more than a quarter of the way to break-even status.

    CAR researchers modeled the impact of the $80 billion in federal aid to General Motors, Chrysler, GMAC and Chrysler Financial using actual economic performance for 2009 and 2010 to date. In addition to the jobs saved in 2009, 314,400 more jobs have been saved so far in 2010.

    The report says the government intervention prevented additional personal income losses of $71.9 billion for 2009 and $24.6 billion for 2010. The net impact to the federal government — in terms of changes in transfer payments such as unemployment compensation and welfare, social security receipts and personal income taxes — was $21.6 billion and $7 billion in 2010.


    I still think this could have been sold as a triumph for the Democrats, but because they let the Republicans set the tone of the message and then ran scared from poll numbers - call it a sales opportunity lost. Ah well, we have the jobs and the industry is growing again - just pray the Republicans don't tank the economy in their effort to defeat Obama in 2012.

    Sunday, November 14, 2010

    Best Election Analysis Ever

    Hat tip to DKos for finding this gem.

    But for those who need the grand explanation, the sweeping conclusions drawn from limited data, the themes that allow us to boil elections down to slogans, I humbly submit the following. The 2010 midterm elections were a mandate for the new GOP sorta-but-not-really majority in Washington. The American voter has clearly demanded:

    1. Social Security reform that guarantees my current level of benefits, alters someone else's, and cuts everyone's Social Security taxes to boot.

    2. A world-class national infrastructure that can be built and maintained without tax dollars.

    3. A balanced budget that doesn't sacrifice any of the government programs – especially the sacred military-industrial complex and the various old age benefits – that we like.

    4. Clean air without pollution controls, clean water with a neutered and underfunded EPA, and businesses that do socially responsible things without any regulation whatsoever.

    5. Consumer goods at Made in China prices that create high-paying jobs in America.

    6. Giant trucks and SUVs that drive like Formula One race cars, look cool, fit into small parking spaces, cost under $18,000, and get the fuel economy of a Toyota Prius.

    7. Complete freedom and complete security at the same time.

    8. An America that acts like a swaggering, sociopathic asshole on the global stage yet is beloved by all the nations of the world.

    9. Wars against every enemy, real or imagined, all of the time, with no U.S. casualties and no effect on the budget.

    10. Incredibly rich and rewarding professional lives while supporting our employers' right to do whatever they want to us without recourse.

    11. A vibrant, consumption-based U.S. economy with good jobs for anyone willing to look for one resulting from free trade policies that encourage money and capital flows to cheap labor markets.

    12. A highly educated workforce produced by a school system that requires no tax dollars to achieve excellence, students who have no interest in learning, and a virulently anti-intellectual society.

    13. Closed borders and an endless supply of cheap labor to keep prices low.

    14. To buy whatever we want irrespective of what we can afford while maintaining the drumbeat of personal responsibility.

    15. Health care that is cheap, superior, and readily available to me without the danger of the same being enjoyed by anyone I deem undeserving.

    It couldn't be any clearer: we want a government that will resolve every problem we currently face with solutions that require no effort, no sacrifices, and no money. And I have no doubt that we have elected a group of people brave enough to promise exactly that.


    It's the Free Lunch that Ronald Reagan promised us long ago. We're still waiting. But if we double-down and just try harder THIS time, it will work... honest.

    Saturday, November 13, 2010

    Republican Senator Nancy Cassis Takes One Last Shot at Killing Michigan's Movie Industry

    See that tag, "Republican"? Be sure and use it often. That way, when search engines pick up on this story, everyone will know right off that bat who is responsible for the desire to eliminate jobs and investment in Michigan and drive the creative class to other states. Re-pub-li-can. Mlive is using it, you should too. It's only fair to give credit where credit is due.

    Cassis is wasting our time and tax dollars by introducing this legislation when she knows full well that there won't be any action on it this year, but if she wants this publicity - by all means, let's give it to her.

    The Michigan Film Festival kicked-off Friday as uncertainty swirls around the lucrative film credits luring the industry to the state.

    Michigan passed the nation's most generous movie production incentives two years ago -- refundable tax credits of up to 42 percent of direct production costs in core communities such as Grand Rapids. But a new bill would slash that credit to 28 percent in 2011, 14 percent in 2012 and end by that Oct. 1.


    Slash it to 28%, and chances are the bulk of the industry will pack up and leave. That puts us behind Louisiana and Georgia. We may still get a few projects here and there, but the studios being built now, and the thousands of permanent jobs they bring with them, will be gone. Not to mention the bad reputation that Michigan would receive for enticing these people to build in the first place, only to yank the credit away. I've often wondered if a lawsuit was possible in that case - no one wants to invest millions, only to get it finished and then be told "sorry, we are going back on our deal!" Doesn't seem very "business friendly" at all now, does it?

    So, we lose the jobs, we lose the money, we lose the kids, we lose the positive publicity and buzz being created about the state of Michigan, we lose our credibility with "business" - and the most infuriating thing is that Cassis simply refuses to look at the big picture of all the tangible and intangible benefits here. She still points to the Senate Fiscal Agency report as proof positive of the reason behind her crusade - when even they admit their report is incomplete. Once again:

    "Estimating the revenue impact of the film incentives adopted in 2008 has been difficult and will remain vulnerable to a wide margin of error until the State has enough experience to discern the correlations between projected media activity, the claimed credits, and wider economic conditions. In addition to major uncertainties, such as those created by the current weak economic climate (and associated lending crises), the ever-changing landscape of competing film incentives in other states and countries, and the wide variation in the costs associated with different productions, a variety of more administrative issues have complicated the estimates," the paper said.


    They just don't know. Maybe the agency should look at all the areas they have missed, and come back again with a complete study before we pass judgment, yes? And as far as the public goes, the last EPIC poll taken on the film credits was very illuminating on how the people of Michigan feel about this industry. The first question on the issue, read to respondents without the arguments behind it, showed 58% in favor. When the particulars of the criticisms and the benefits were presented, the total in favor of the credits actually increased to 66%. The benefits clearly outweigh Nancy's attempt at deflection here. Her argument just doesn't fly with the majority of citizens.

    All of this could be why Snyder is backing off his previous stance of ending the credits and is now promising to look at them again. The fact that big-money Republicans such as John Rakolta and public officials like L. Brooks Patterson have a stake in the industry could have something to do with it as well. Rick Haglund seems to think that Andy Dillon can help out with this, and if he can, that's great, but the memory of losing Pure Michigan and the Promise Scholarship under his watch kind of takes the air out of that balloon. Best not to look to Dillon to step up and make the case.

    At this point, what happens next is all on the Republicans. They will be responsible for either keeping this growing industry here, or driving it to some other state. One would hope that all of these new promises to be inclusive and look at other viewpoints are true, but given the past behavior of insisting on getting their way, regardless of facts or public opinion - don't hold your breath.

    Friday, November 12, 2010

    Cubs Owner Who Funded Tea Party Group Now Wants State Aid for Wrigley Renovation

    * sigh *

    Here is Cubs owner Joe Ricketts, and a description of his election activities. He did disclose, so give him credit for that.

    There's also Taxpayers Against Earmarks (TAE), a new nonprofit "dedicated to educating and engaging American taxpayers about wasteful government spending and the misguided practice of earmarks." While its mission is educational, it has an affiliated political arm -- what's known as a "super PAC" for its ability to raise and spend any amount it wants -- called the Ending Spending Fund, which just put nearly $600,000 into the Nevada Senate race against Majority Leader Harry Reid (D). The "taxpayers" against earmarks is actually just one man named Joe Ricketts, founder of Ameritrade and owner of the Chicago Cubs, who is also the sole financier of the Ending Spending Fund.

    And here is the Ricketts family now, coming to the state of Illinois with their hands out for help from the government. Watch for the fine print...

    The Cubs' proposal calls for the Illinois Sports Facilities Authority, which owns U.S. Cellular Field, to float $250 million to $300 million in bonds. The bonds would be paid over 35 years through amusement taxes that Wrigley Field customers pay. Ricketts and his family also pledge to match the state's investment in the ballpark with their own investments in redeveloping land outside the stadium.

    In 2009, the Cubs paid $16.1 million in amusement taxes to the city of Chicago and Cook County through a 12 percent levy on each ticket. The team proposes that the city and county would be guaranteed this amount for the duration of the bonds. But the incremental growth in amusement taxes beyond $16.1 million, either through increased ticket sales or increased ticket prices at Wrigley, would pay the bonds over time, Ricketts said.

    Just in case "increased ticket prices" don't meet those needs... well... the people that are hell-bent on destroying the taxpayer-funded safety net for others are certainly going to need a taxpayer-funded safety net for themselves. It's just business, you understand.

    The Cubs owner, though, is seeking a safety net in case the amusement tax does not cover the bond payments. Ricketts would like the bonds to be backed by revenue streams that are assigned to the facilities authority, including a 2 percent hotel tax.

    Illinois is facing a budget crisis that makes Michigan look like a small-state backwater - $15 billion and counting at last report, with Governor Pat Quinn floating an income tax increase as part of a plan to balance the budget (and yes, he won re- election, but just barely). This proposal is news to Quinn, but apparently the Ricketts family has been floating the idea with members of the administration and Chicago city officials. Reactions so far have been mixed.

    This isn't new taxes though. Oh no. This is the Ricketts family wanting the state to borrow the money, provide a safety net for the family - and then they get to keep any extras. See how that works?

    "The state has no credit risk here," Ricketts said. "No one is losing anything. It's not a new tax, and it's not increasing taxes. It will allow us to keep some of the growth in a tax."

    It is good for the city, the state, and the team to keep Wrigley in tip-top shape and make improvements to the surrounding neighborhood. All for that - if it wasn't for the screaming hypocrisy of the Ricketts family using their family fortune in an attempt to influence elections to try to deny "spending" on others.

    And coming on the heels of Ryne Sandberg leaving and Aramis Ramirez staying, it just leaves a bad taste in your mouth when it comes to continuing to support the Cubs in the future. Dammit.

    Wednesday, November 10, 2010

    The Only Living Boy in New York



    Honda commercial driving you crazy? This is the song...

    GM Posts $2B 3Q Profit

    Senator Shelby, care to comment?

    General Motors today posted a $2 billion third-quarter profit off revenue of $34.1 billion in its last financial report before its planned Nov. 18 return to the stock market.

    GM previously said it would report a $1.9 billion to $2.1 billion gain for the quarter and promised its first full-year profit since 2004.

    Through its quarterly earnings, GM’s third in a row, the company is seeking to convince investors it has eliminated the problems that led to four-straight annual losses totaling $82 billion before its 2009 bankruptcy. GM restructured on $50 billion in federal aid, and the stock sale will allow taxpayers to start recouping the $40 billion that was converted into a 61% stake in GM.

    “Eighteen months ago, nobody expected any taxpayer money to get paid back,” said Rebecca Lindland, an analyst with IHS Automotive.

    Well, that's what you get for listening to the Republicans. They were wrong, wrong, wrong. The hopes are now that the taxpayers will be paid back in full by the time this is over.

    The automaker has said annual profits will continue. Chief Financial Officer Chris Liddell said last week in an online investor video GM will be able to make $11 billion to $13 billion before interest and taxes in a moderate sales year and $17 billion to $19 billion when sales are at their peak.

    That’s largely because GM’s bankruptcy restructuring lowered its break even from at least 15.5 million in U.S. sales to sales of 10.5 million to 11 million vehicles, Liddell said. U.S. light-vehicle sales totaled 10.4 million in 2009 but were often in the 16 million range before the recession.

    In the initial public offering next week, the U.S. Treasury is selling about a third of its 61% equity stake in GM at a loss. The government is hoping the stock’s value rises enough in the future to allow taxpayers to break even on the total investment when it sells the rest of its shares.

    Are we counting the cost of the potential loss of a million jobs nationwide, had the Republicans let the domestic auto industry completely collapse? Are we counting the cost of the state of Michigan being "insolvent", and whatever financial horror that would entail? Are we adding those costs to the taxpayer ledger? No, unfortunately not. But when you add those factors in, we are going to more than break-even on the taxpayer's dime - we are going to thrive.

    Assuming we can keep the Republicans from crashing the economy again, that is. Pretty big assumption to make, given their penchant for destruction, but you always have to hope for the best.