Michigan Residents Must Really Believe Denial Is A River In Egypt
Several months ago, I wrote a blog about how Detroit’s problems and it’s bankruptcy are just a symptom Michigan’s bigger problems. I compared Michigan residents to the morbidly obese guy you see at Walmart with an amputated foot, heart disease and renal failure wearing a colonoscopy bag and carrying an oxygen tank in a man purse while shopping in a scooter chair because out of his own arrogance, he ignored his doctor’s advice 35 years ago to take better care of himself.
“I see NOTHING! I know NOTHING!” -Sergeant Hans Schultz
Boy, did I get the hate mail from Michigan residents. The consensus was that I was an asshole because Michigan will come back if everyone prays and God will prove me wrong. One guy claiming to be a good Christian from Northern Michigan on his Facebook page emailed me telling me, “take your faggot ass back to Miami so you can get AIDS and die!”
I guess I hit a nerve.
The problem really boils down to the fact that Detroit’s financial problems are the only precursor of what will happen statewide and what is already happening in some communities and school districts across Michigan. Six other municipalities and seven school districts are under state control and another dozen are on the Governor’s watch list.
Michigan’s tax base will continue to erode. Michigan’s best and brightest have been departing the state in droves for decades leaving only unskilled assembly line workers, farmhands, government workers, welfare recipients and old age pensioners. Like the automobile industry, Michigan’s best and brightest are leaving the state in droves and don’t plan on going back and along with it potential tax revenue.
The freeways in southeast Michigan are filled with miles of potholes and broken concrete that make the freeways through war-torn Sarajevo look like a model of freeway construction because there is no revenue to fix it. The Director of the Michigan Department of Transportation last month admitted that his department was so broke that they didn’t have enough money to cut down the six foot high weeds growing on the I-696 service drive in suburban Detroit.
As anyone who watches cable news during the day in Michigan can tell you, it’s apparent Michigan residents are aging because nearly all the advertisements are for scooter chairs and disposable catheter tubes. Matter of fact, advertisement geared toward aging baby boomers.
Forbes Magazine’s annual The Best States for Business list, published online Wednesday, ranked Michigan as the fourth worst state in the U.S. to do business in. Areas that hurt Michigan’s rating included business cost (ranked #38), labor supply (ranked #48), economic climate (ranked #47) and growth prospects (ranked #47). States with politically liberal politicians and non-Right-To-Work laws like Massachusetts (ranked #13), New York (ranked #21) and Pennsylvania (ranked #27) rank higher.
Business cost is based on Moody’s Analytics cost of doing business. This analysis includes labor, energy, and taxes. Labor supply is measured by educational attainment based on Census data and factors in migration and population projections. Economic climate measures economic output as well as unemployment during the past five years. Growth prospects measures job, income and gross state product forecasts.
Wall Street is paying attention to what is going on in Michigan and to what the finance media is saying and they’re not liking it contrary to what Michigan Governor Rick Snyder and his GOP colleagues are saying.
At least three Michigan municipalities postponed bond sales (Genesee County, Battle Creek, and Saginaw County) because interest rates were higher than they were willing to pay. Once posh Oakland County, who still maintains an Aaa rating from Moody’s had to delay a bond sale. Although it was announced yesterday that Oakland County taxpayers after extensive lobbying by county officials, will only be paying 3.62% on that bond.
Even the state of Michigan is having trouble selling its bonds. As Robert Amodeo, head of municipal bond trading in New York at Western Asset Management Co., which oversees about $30 billion of municipal bond debt for municipalities in Michigan told Crain’s Detroit Business, “It’s a healthy reaction by the municipal market to take a pause and reassess the risk” in Michigan. There’s a lack of appetite at the moment.”
Yet, with all that is obvious, elected officials in Michigan and Michigan residents refuse to see the hard reality that Michigan is dying. They dismiss economic recovery going on in other markets like Miami as “only pockets” in order to dismiss claims that Michigan’s slow agonizing death and bad public policy over the past 40 years.
Michigan cheerleaders mostly from Governor Rick Snyder’s office or the Michigan GOP will point to Toronto-based real estate tycoon Andreas Apostolopoulos’ acquisition of several downtown Detroit office buildings that he bought for pennies on the dollar or Dan Gilbert buying up buildings with the money he earned from his cheesy Monty Burns inspired Ohio casino and from pawning his sub-prime loans and Reverse Mortgages as a sign of Michigan’s recovery.
What these men bring to the table is chump change. They’re bottom feeders looking for cheap deals and tax write-offs. Michigan needs visionaries to re-invent itself. This is something that it has been needed for the past 35 years and both political parties share in the responsibility of Michigan’s failure.
Collectively the state needs to start thinking outside the box like it did 100 years ago because the outdated dogma and strategies that made it great won’t work this time around. The first step is to admit there is a problem.