Monday, December 08, 2008

Recession a Year Old?

America has been in a recession for a year now.

Michigan has been in a recession for eight years. A few years ago, when the economy recovered for much of the country Michigan stayed in a recession. The main reason is how much we depend on the auto industry.

We have depended on it for too much for too long and everyone got greedy. The stockholders wanted big dividends. The Executives and management wanted huge pay and massive bonuses. The union wanted unrealistic wages with huge benefits and an unworkable retirement package. The government wanted huge corporate tax revenues. All of this, combined with too many losing models and all too often inferior products bled the Auto industry dry.

It could have continued a bit longer if it weren't for foreign competition but we'd have reached this point anyway.

Arrogance and greed. Workers had friends punch them in and out so they got paid without even showing up for work. Employees got paid to sleep if they made production. My great-grandfather was part of great sitdown strike in Flint when the UAW was born and my father always said he would be spinning in his grave if he knew what the the UAW that he fought so hard for had degenerated into.

Bottom line is this. Business is a dog-eat-dog enterprise and if you aren't tough and up to a fight with your competition you're going to lose everything. Greed and overconfidence caused our auto industry to grow fat and lazy, yes lazy. There were many hard-working people in the industry but they were overshadowed and overrun by those who simply wanted a fat paycheck, earned or unearned.

I was saying, and I still believe, that the politicians cannot save Michigan and the government cannot save Michigan. Our problems are cultural with unrealistic expectations and an unrealistic work ethic. We have come to expect massive paychecks for very little work.

There are some industries that are growing but sadly these are industries that do not help the economy, at least not enough that a state can depend on them. Healthcare, education, and temporary services do not create wealth and it is jobs that produce products that make a state's economy work.

The real shame is that Michigan is inherently a very rich state but we don't use it. When you total up our available natural resources Michigan is the most resource rich state east of the Mississippi but we are not set up to take advantage of it. We have not only water (lots of it), lumber and agricultural products but we have oil and massive mineral resources that are largely untapped. We need to look at these as a new foundation on which to rebuild our economy.

The government is incapable of helping us solve the real problem. It's up to us.

We have other problems. Our population is one of the most uneducated in the country with the highest drop-out rate in the country and fewer college graduates than most other states. Too many assumed that they could work in the auto plants and planned their whole lives around it. Those plans have gone up in smoke. We have two of the most dangerous cities in America within our state (Detroit and Flint). That too is a problem we have to solve.


Blogger Chuck said...

Shoprat, I'm of a mind that while the auto industry failing would be horrendous on Michigan, 15 or 20 years from now we might be better off. We need to get off of the auto industry rollercoaster. Up then down.

10:47 PM  
Blogger Skip said...

Seems to me that Michigan is an "eggs in one basket" state.... around a century ago we "crashed" because the lumber was gone so logging ceased , then the ship building moved on so all the shipyards sat idle. Even before that the fur trade was almost overdone, I won't even go into the copper mining ... seems like we would learn to diversify... now the news says Dow is cutting 5,000 jobs(granted not all Michigan) when will we learn???
(will the last one out of Michigan turn out the lights?)

10:57 PM  
Blogger Pasadena Closet Conservative said...

Good luck out there in Michigan. I know times are tough on a lot of people there.

2:12 AM  
Blogger Joe said...

Build a great car at a fair price and I guarantee it will sell and make the auto companies rich again.

However, when wages and benefits reach $75.00 per hour on average (compared to $40.00 for other auto makers), it is hard to get to that fair to compete with other auto makers.

Wages are not the only factor.

My GM build 1995 Saturn has required 8 new alternators. It was later discovered that a hidden assembly problem was to blame.

8:47 AM  
Blogger Gayle said...

I agree with you, Shoprat. I don't see how any bailout, no matter what the size, is going to solve the real problems, the corruption, laziness, and most of all, the greed.

10:38 AM  
Blogger Tim said...

SR- While I agree with some of what you say, I don't think that the avg. Michigander is lazy or uneducated.
I will say this:Education is sorely lacking at the post high school level, and anyone sending their children to the Detroit, Flint, or Saginaw public schools are not getting an equal education as the wealthier suburbs. I fault the state government for never holding these districts accountable. They are awful.
Do you realize that if you did not count the unemployment rate of those three cities out of the statistics, we would probably be below the national average.
Yeah, everybody has heard the stories from 20-30 years ago about people in the UAW (U Ain't Workin') goofing off and showing up drunk, etc., but those day are over. It is unfortunate that you perpetuate that old saw.
THe statistic that you DID NOT mention about MI is that Oakland County is one of the richest in America. There are plenty of educated hard workers all over the state.
The BAD THREE cities mentioned earlier are what is dragging our state down. These cities are predominately Black, have black Mayors, city councils, and city employees. I am not putting down blacks, but the elected officials in these cities have sucked the marrow out of the bones of these places. Getting elected mayor in any of these cities requires passing the color litmus test, and no Republicans need apply, either.
Blacks in Michigan's BAD THREE keep electing bad leaders and want a bailout from the suburbs. Whenever the Detroit mayor talks about "regional cooperation" it's time to hold onto your wallet.
We will make it thru this downturn (probably better than the rest of the country), and I think that even GM (probably not Chrysler) will survive. I just bought a new Ford Flex and love it. Assembly jobs will move to Mexico and the designers and engineers will stay here.
Most of the dead wgt. in the UAW will be bought out and that will give the autos a new lease on life. The low skilled workers will either be retrained or take menial postions that their lack of education limits them to, or will turn to crime.
I do not understand why someone with your education took the easy way out and worked on the line. Such a waste of talent.

11:57 AM  
Blogger christian soldier said...

My grandfather was in on the formation of the union at Chrysler Corp...I guess it seemed necessary at the time ...
A look at history - will show that socialism - by any name--never works...and putting power and $$$ into centralized hands breeds corruption...
Thank you for the excellent post...

2:14 PM  
Blogger Bloviating Zeppelin said...

It is remarkable to have an individual from Michigan make as startling and honest a revelation as yourself. If only more persons had the self-awareness and honesty of you.


2:45 PM  
Blogger Tapline said...

The big 3 has been nationalized so.....Big Brother will take care of you....Nancy wants a car czar to take care of all of them....Isn't that great a politician to govern the factories from Uncle........//sac off. Honestly,,,where is this madness going to end?????or better still will this end the madness???

10:44 PM  
Blogger dmarks said...

Tim: There is really no point in mentioning the race of these mayors.

After all, that Illinois governor happens to be white. Gary, Indiana is a major problematic city, like Flint or Detroit. They recently had a 3 term mayor who did nothing to improve the situation. He happened to be white, and the city's population is "blacker" than Detroit or Flint.

9:12 AM  
Blogger shoprat said...

tim Dmarks is right, furthermore, Don Williamson, the mayor of Flint is white, and spends most of his energy fighting the city council.

Tapline Fascism is when the businessman owns the business but the government runs it.

BZ thanks.

CS The union may have seemed like a good idea but it went very, very wrong.

chuck You may be right but it is going to be a horrible 15-20 years.

Skip history is a lesson never learned.

pcc Thanks

Joe The greed runs through all the ranks top to bottom.

Gayle Thanks.

10:01 AM  
Blogger Bob said...

You wrote the plain truth in this post.

10:42 AM  

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