Sunday, December 04, 2005

Michigan's Economic Future

America's economy is growing and improving, with some areas entering into true prosperity, but as the Detroit News points out in an article today, Michigan will continue to slide. There are some bright spots but they are not really all that bright. Michigan has lost 308,900 jobs since 2000 averaging 60,000 jobs a year. With unemployment at 7%, one of the worst in the nation, Michigan is going to lose 10,000 more jobs in '06. The good news is we appear to be nearing the bottom, but we're not there yet. The non-manufacturing and the tourist industry are growing, but these cannot carry the economy. I would like to statistics on non-automotive manufacturing in Michigan to see how it is doing.

Another article today in the same paper says that a group has a plan. As I read the article I do not see a specific plan but a series of observations which are true but will not turn the state around.

For example

The appalling state of Michigan's economy, the dysfunction of its largest city, the do-nothing squabbles in Lansing and the disparate visions of where we are and need to go to prosper in a global economy should prove that confrontational Rust Belt parochialism doesn't work.
Period. It's way past time for some fresh ideas.

All I can say is "NO KIDDING!"

What needs to happen is the Unions and management need to face reality about what they can pay. Some companys are paying quite a bit lower, but Michigan still has a reputation for being a state of spoiled, overpaid, underproductive union workers (and overpaid management and executives as well). Michigan over-regulates business; You need some regulation, but you don't need to regulate businesses to point of strangling them. I have not seen business tax charts but I have been led to believe Michigan is one of the worst states. We need to turn all of these around.

What this article seems to be saying is that businessmen and not politicians will turn this state around, and the politicians need to let them do it.

Underpinning Rothwell's strategy is a basic premise too often lost in the social-welfare rhetoric that still passes for labor-management relations in Michigan: Business creates jobs and invests in communities, not government, and investment goes where it's invited and stays where it's wanted.
The corrosive effect on Michigan of its culture of confrontation and its accelerating labor-management death spiral, now accessible instantaneously by Google over the Internet, is incalculable. Add, too, the bankruptcy of Delphi Corp. and the deep troubles of GM and Ford Motor Co. amid a booming economy.

Well they're half-right. Some of the changes that need to be made are political and cultural, and the business interests only have so much power there.


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