Friday, December 22, 2006

Michigan is in Deep Trouble

Economically speaking, Michigan seems to be spinning down the drain. We have the highest unemployment in America and things just seem to be getting worse, with even more job losses coming in 07. Right now, Michigan is losing people instead of gaining them as people leave this state looking for greener pastures. It's a trend that is going to continue until God knows when.

What Michigan needs worse than anything right now is for businesses to invest in this state and it's not going to happen, at least not at the level we need. The reason that businesses don't like to come here is three-fold: taxes, regulations, and our labor situation.

Taxes have us now in a "damned if we do, damned if we don't" situation. Michigan is facing a huge deficit next year and if we increase taxes to cover it, we will lose even more businesses and not attract many new ones. No business = No revenues to tax. If we don't increase taxes we will have to cut vital services. Neither answer is acceptable and I see no other options. And the situation is going to get worse before it gets better.

This situation is not the fault of either party or any politician. I have said before and will say it again, this is a cultural problem brought on by unrealistic expectations and demands by labor, management and investors and will not change until the people of Michigan face the fact that we have to make some changes. Everyone in this state is both the creator of and victim of this situation; we created it and now we must live with it.

Other states, not to mention other countries, have lower taxes, less regulation and lower labor costs and this is what the people of Michigan need to look at and think about. When most people make a purchase they will buy it from the least expensive source that has what they are looking for at an acceptable level of quality; businesses do the same. Why do business in Michigan when it is much cheaper and easier to do it in Georgia or Kentucky? The people of Michigan need an answer to that question.

What is really troubling is that we have more natural resources than most states. We have abundant water, lumber, agriculture, minerals, ores, crude oil deposits and wildlife like few other states do, and possibly no state east of the Mississippi can match our resources. We have a lot going for us and only our own attitude is keeping us from taking advantage of it.

Steven, who has been commenting lately here, also talks about it.


Blogger Skip said...

Well as long as we are losing people, no one is building and it is a trickle down theory, it hit home for me today, check out my blog

10:05 PM  
Blogger Gayle said...

Sounds terrible, Shoprat. It doesn't sound very hopeful at all. My prayers for things to turn around in your state. I've been there, and it's an absolutely gorgeous part of this country.

Blessings and hopes that you have a wonderful Christmas.

10:56 PM  
Anonymous Anonymous said...

Thanks for the plug. Until one or two of the "America car makers" go belly up, I doubt there will be any significant change in the economics in this state, the worst before better scenario. I see the UAW as the largest impediment to this states economic recovery. Contracts ratified in the past are akin to the Social Security system, expecting this generation to pay for the last two.

7:30 AM  
Anonymous Anonymous said...

Only way to get business in there is to ease up on regulation, and offer short term incentives to get them going. A lot of other states are very aggressive in that department with some offering up to 10 year packages. I know where your coming from, as we went through this when the feds tried to socialize the oil industry, and it killed us dead. It's a long road back, and it sounds like you have a ways to go before you turn the corner. There will come a time when there is no choice. People will either have to dig in their heels and deal with it ....... or leave. Sorry you have to go through this, I don't wish this situation on anyone. It's even more frustarting knowing the cream at the top still has it to good to bring in the hard changes needed.

9:24 AM  

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