Sunday, December 30, 2007

For the New Year

Wishing you and the people you love an auspicious New Year.
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Friday, December 28, 2007

Michigan's Top Economic Stories of 2007

Layoffs, closings and downsizing

From autoworkers to chemists, Michigan lost jobs steadily throughout 2007. A University of Michigan economic study tallied 76,300 jobs lost in 2007 and projected a loss of 51,200 for 2008. Ann Arbor's Pfizer began releasing employees in the summer at a rate of about 175 per month. All automakers reduced payrolls this year, even after forging agreements with the UAW that included job security measures. Plucking a familiar fear-based chord, Gov. Jennifer Granholm sent 35,000 layoff notices to state employees on the brink of a government shutdown that lasted only four hours the first day of October. The layoffs never came, but the gesture packed a symbolic punch.

Private equity firm buys Chrysler

The private equity firm Cerberus took control of Chrysler in August after Daimler shed the ailing domestic division. Named for the three-headed canine guardian of the gates of hell, Cerberus has a strategy of taking over companies in dire straits and reviving them through aggressive cost cutting. This fall marked the company's first venture in union negotiations with the UAW. Unlike GM and Ford, the new Chrysler made no promises of job security. Like GM and Ford, Chrysler announced job cuts before the ink was dry on the UAW agreement.

Foreclosure tsunami

While the "foreclosure crisis" is a national problem with international repercussions, Michigan has been among the top 10 states for foreclosures every month. According to RealtyTrac, from July 1 to Sept. 30 Detroit ranked second-highest among the nation's largest 100 metropolitan areas in the rate of foreclosure filings, with one for every 33 households. Policy makers at all levels of government are scrambling to propose solutions before another wave of adjustable mortgages resets its interest rates early in 2008.

Nation's highest unemployment all year

Michigan led the nation in unemployment all year with the exception of February and April, when Mississippi inched past Michigan by less than half a percent. Here are the Michigan numbers for the year from the U.S. Bureau of Labor Statistics: January 6.9 percent, February 6.6 percent (Mississippi 6.7 percent), March 6.5 percent (Mississippi 6.9 percent), April 7.1 percent, May 6.9 percent, June 7.2 percent, July 7.2 percent, August 7.4 percent, Sept. 7.5 percent, Oct. 7.7 percent, Nov. 7.4 percent. The national rate ranged from 4.4 to 4.7 percent in 2007.

Budget standoff stalls Legislature

Michigan's Constitution requires the Legislature to pass a balanced budget. This year that proved nearly impossible. In the 11th hour, after a four-hour government shutdown, the Legislature managed to pass a continuation budget. The gridlock lasted nearly nine months and threatened the state's credit rating. Without more structural changes, next year's budget process will likely be a replay of this year's saga.

Detroit development looking up

The Detroit Institute of Arts renovation and the new MGM Grand Casino and Hotel caught the eye of the New York Times, landing the city a spot on the "Places to Visit in 2008" list. The MGM Grand was also named one of the top 10 new U.S. hotels in 2007. In December, Standard & Poor's upgraded Detroit's fiscal outlook from negative to stable, making an upgrade of the city's credit rating conceivable. The city also attracted Quicken Loans, which plans to move its headquarters and over 4,000 jobs from Livonia to a new downtown location.

Michigan tourism promotion wins awards

Travel Michigan's Pure Michigan campaign featuring Tim Allen won kudos from the Travel Industry Association of America. The new Travel Michigan website ( gained recognition this summer as the #1 State Tourism Web Site, according to Hitwise United States (, an international company that tracks website traffic. This is good news, since according to George Zimmermann, vice president of Travel Michigan, "Visitors spend about $17.5 billion annually, which employs 193,000 people statewide and contributes $971 million in state taxes."

Friday, December 21, 2007

Benjamin Barber on Bill Moyers Journal

"Capitalism has put democracy in trouble, because capitalism has tried to persuade us that being a private consumer is enough. That a citizen is nothing more than a consumer." Benjamin Barber

Wish I'd said that.

December consumer confidence falls, will common sense follow?

It is just four days before Christmas, a religious holiday and also consumer celebration of spending. Today the Reuters/University of Michigan Consumer Sentiment Index for December came in at 75.5. November's reading was 76.1.

What does it mean? What can it mean?

Consumers -- people who buy things in order to live -- are less confident about their finances and for good reason. The global financial house of cards has turned consumers' houses into poker chips. The consumer confidence index is often explained as indicating the prospects for consumer spending -- two thirds of economic activity -- without questioning the premise that unbridled consumer spending is good. Consumer spending has been enabled by an artificial inflation of residential real estate prices. Consumer spending has been a speculative excess of sorts.

Now, reality is sinking in and consumers, who earn money presumably through productive activity, are seeing a bleak near-term future.

Time for a little less debt-fueled spending. Time for a little reality-based home economics. A house is a home if you can make the mortgage payments. And you can make the mortgage payments if you resist buying cheap junk you don't actually need. Go for it. Make a new year's resolution to spend less than you earn.

It's okay. You, the consumer, are not responsible for sustaining the economy while slitting your own pockets.

Stabenow law offers debt help but foreclosure crisis rages on

U.S. Sen. Debbie Stabenow's Mortgage Forgiveness Debt Relief Act has now been signed into law. The Michigan Democrat's legislation frees individuals from paying income tax when they have had a part of their mortgage loan forgiven or have been forced to foreclose. It is a measure to remove the insult of additional taxes after the injury of foreclosure.

Even with this legislation, there is more work ahead to help borrowers stay in their homes, keep credit affordable and stave off a recession. There is plenty of blame to go around in Michigan's foreclosure crisis and not all of it in Michigan. Politicians are scrambling to respond to a crisis that was years in the making and could have been prevented through sensible regulation and appropriate oversight. Other recent actions include:
    • The Bush Administration announced an entirely voluntary plan for mortgage servicers to consider instead of outright foreclosure when borrowers fall behind on payments.

    • The Federal Reserve Bank has approved a set of rules that resemble pre-1980 lending practices - that require evidence of borrowers' income and ability to repay loans and full disclosure of the terms of a loan to borrowers before closing the deal.

    • Congress is considering legislation that would allow the Federal Housing Authority to refinance sub-prime loans due to reset at higher interest rates. The FHA would reduce down-payment requirements and increase loan amounts to accommodate the loans.

    • The Michigan Legislature is considering a sheaf of bills that would require licensing for loan officers and prohibit predatory lending practices.

    • Michigan Attorney General Mike Cox last week sponsored a foreclosure prevention forum at Cobo Center that attracted thousands of borrowers behind on their mortgage payments.

Michigan has recorded over 135,000 foreclosure filings this year. The Detroit area ranked second highest in the third quarter for the rate of households in foreclosure -- one out of every 33 households. Wednesday, RealtyTrac announced that nationally 201,950 foreclosure filings were reported last month, compared with 120,334 in November 2006. Nevada, Florida and Ohio had the highest rates of increase over the year.

While the situation in Michigan is not unique, it is exacerbated by our declining manufacturing economy. Here are some of the ingredients that went into making Michigan's mortgage mess:

    • Repeal of the Glass-Steagall Act in 1999. In 1933, this federal act was created to separate investment and commercial banking activities in order to prevent the speculative excesses of the type that preceded the Great Depression. Sixty-six years later, the walls protecting mortgages from becoming fodder for financial speculation finally came down.

    • Not enough mortgage examiners. The Michigan Office of Financial and Insurance Services (OFIS) is responsible for regulating the mortgage industry in Michigan. OFIS has an insufficient number of examiners - 12 to regulate over 2,800 companies making mortgages.

    • Mortgage loan officers in Michigan are not licensed. Nor does the state require background checks. Convicted criminals can become loan officers.

    • Inadequate consumer education. At the epicenter of the foreclosure crisis, Detroit HOPE, a coalition of lenders and consumer advocates, was formed in 2005 to reduce foreclosures in the metro area. In 2007, by September, the group had only held three foreclosure-prevention workshops. Only about 75 people attended each seminar.

    • Unethical, but legal, practices. Offering adjustable-rate mortgages to sub-prime borrowers is not illegal. Lax federal and state regulation has permitted giving loans without verifying income or ability to repay.

    • Unclear jurisdiction. According to the Conference of State Bank Supervisors, matters of jurisdiction are still being worked out between the states and the federal government in the courts. This April, in Watters v. Wachovia, the U.S. Supreme Court ruled that state-chartered subsidiaries of national banks are exempt from state regulation. OFIS Commissioner Linda A. Watters had advocated for state regulation of state-chartered subsidiaries. Numerous organizations filed amicus briefs, as well as every state attorney general in the nation including Washington, D.C., and Puerto Rico.

Wednesday, December 19, 2007

Michigan Restaurants Suffering

cross-posted at Michigan Messenger
The state's restaurants are facing belt-tightening in 2008.

The Michigan Restaurant Association has forecast growth of only 3.2 percent for 2008, down a half percent from the 2007 forecast. The modest growth rate places Michigan's food service industry dead last in the country in growth for the second year in a row.

"The industry is certainly struggling here," said Andy Deloney, vice president of public affairs with the Michigan Restaurant Association. He said that most states see restaurant sales grow by 5 to 7 percent annually.

As the state economy goes, so goes the food service industry. "It's not news to anybody what the state of the Michigan economy is. People just do not have as much money in their pockets anymore," Deloney said. In addition to the nation's highest unemployment, people who do have work are experiencing periodic layoffs and less overtime.

Michigan's economic stress affects all sectors of the food and beverage industry. "Some people think fine dining is immune to recession because the people who are still going there are the ones who have money," Deloney said. "But don't forget about the ones who would go out to celebrate an anniversary or promotion. There are fewer promotions now."

During Michigan's extended economic slump, restaurant profit margins have been extremely slim, making it increasingly difficult for them to stay in business. "If you are doing 2 percent, you are doing well," Deloney said. "There have been a number of restaurants this year that have closed due to the economy."

Even long-standing establishments are calling it quits. The Embers in Mt. Pleasant closed its doors this summer after nearly 50 years in business. After a run of almost 80 years, the Fox and Hounds in Bloomfield Hills also closed this summer.

Michigan's statewide restaurant sales in 2006 were $12.3 billion. The association projected $12.8 billion for 2007, which has been borne out by business this year. The forecast for 2008 is $13.1 billion in sales.

"Folks have been waiting for a couple of years for a turnaround to come, and they are running out of gas. They are trying to pinch as many pennies as they can," Deloney said.

Modestly priced eateries catering to the needs of busy families are still holding their ground. "One segment doing well right now is 'fast casual.' Places like sandwich shops are providing what people are demanding," he said. Innovations like curbside pickup and phone-ahead ordering help restaurants stay competitive.

Monday, December 17, 2007

Miscellaneous jaw droppers

Congressional Quarterly reports that presidential candidate Ron Paul has outdone his $4.2 million, one-day fund raising record. Marking the anniversary of the Boston Tea Party, Paul's campaign has raised a new one-day, online total: $6 million.

Lieberman endorses McCain

Harry Reid's betrayal on FISA in the Progressive. Retroactive immunity for law-breaking telecommunications companies is just around the corner.

The FCC will vote tomorrow whether to allow newspaper-broadcast cross-ownership...translation, a green light for more media consolidation.

Sunday, December 16, 2007

Say 'No!' to negative news

This dog is all about attitude.
He bids you well and happy holidays.

Some curious statistics this week

Did anyone else notice:

1. that the CDC announced a 20 percent increase in suicides for people aged 45-54 from 1999-2004? They also announced that this is the highest rate in 25 years. They could not offer any reasons for the dramatic increase.(source)

2. the Congressional Budget Office release a report concluding that from 2003-2005 the increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans. (source) President Bush said that the shift had actually been occurring for at least the last 25 years.

Hmmm. Is it at all possible that financial stress and despair could be behind the some of the increase in suicides among middle-aged people? These are people who have moved past the sense of immortality of youth. They are struggling to make it, raise children, save for retirement, pay off mortgages, pay for college tuition while still paying off their own college loans. These are people pop culture tends to leave behind. They are not the young and the beautiful. These are the tired and responsible laid-off line workers and outsourced middle managers. They might be stuck in dead end jobs precisely because they are afraid there is nothing else for them. They have seen their real income stagnate as their living expenses continue to rise. A little discouragement in the economy of the last seven years definitely makes sense. It will be interesting to see if there is another increase in suicides coincident with the bust of the housing bubble.

In the meantime, if you are middle-aged, down on your luck and trying to make ends meet, know that you are not alone. You did nothing wrong. These really are tough times no matter what the corporate spin masters say about globalization. You have not failed if you have not met your financial goals. In the end, all will be well. And ultimately there will be justice.

Saturday, December 15, 2007

Divesting from Sudan, Michigan style

Crossposted at Michigan Messenger
Is divestment a strategy to combat genocide in far away places or a tool to fight terrorism? Is it a matter of homeland security or an assertion of social conscience in a global community?

Michigan's House and Senate are working on divestment legislation, but differences in approach and philosophy have created conflicting results that need to be reconciled before any legislation can be enacted. One side favors a sweeping anti-terrorism model, the other a focused strategy targeting genocide in Darfur. In spite of their differences, both sides expect to come to agreement and pass legislation in January after the holiday recess.

Some in the Senate support a broad anti-terrorism approach aimed at all countries on the U.S. State Department list of "state sponsors of terrorism." "We shouldn't be investing Michigan dollars in countries who intend to hurt us or are our enemies or who import terrorism," said Sen. Valde Garcia (Rep. Dist. 22) a member of the Homeland Security and Emerging Technologies Committee, which in October took up review of Sen. Cameron Brown's (Rep. Dist. 16) "Divestment from Terror Act." That committee met Tuesday to consider changes to several laws that would be affected by Brown's legislation.

Others prefer a highly specific divestment strategy focusing on a narrow list of companies in a single country. Legislation sponsored by Rep. Alma Smith (Dem. Dist. 54) follows the targeted divestment approach adopted by 54 universities and 15 states, and is based on the work of the Genocide Intervention Network. "In contrast to other divestiture legislation, this bill, and this effort to bring an end to the genocide in Darfur, is a about taking a moral and ethical stand on perhaps the greatest humanitarian issue facing the world today," Smith said. "It is not about politics or social posturing. Simply put, it is about doing the right thing."

The state of Michigan has engaged in a divestment campaign once before. From 1979 to 1988 the state passed three acts divesting state funds from South Africa in protest of apartheid, which had divided that country by race since 1948. Divestment by states, colleges and universities is credited with catalyzing change in South Africa. Michigan ended its South African divestment in 1993, when South African leaders arrived at an agreement to create a Government of National Unity -- a bridge to democratic elections. This precedent inspires current efforts to make change in Sudan.

Brown's legislation seeks to divest from Cuba, North Korea, Syria, Iran, and Sudan -- the complete State Department list of "state sponsors of terrorism." Brown's legislative director Kendra Butters says state pension funds and other investments would be examined to determine if their money is invested in "scrutinized companies" -- those doing business with any state sponsor of terrorism. Companies would be notified that they have to end their business relationship with the country in question. If they do not, "state dollars will be pulled out and then the fiduciary will have to reinvest in another company."

Critics of Brown's legislation say it is so broad that it will have unintended negative consequences on economic, social and political conditions in Sudan. They say it has the potential to drive out businesses that are making a positive difference in the country.

Butters defends the legislation, saying it provides a humanitarian exemption. "We have defined a 'social development company,' which exempts products that are helpful to the people -- things like agricultural supplies, food, medicine and other consumer products. These things are exempted," she said.

Smith contends that Sudanese divestment should be a stand-alone bill. Proponents of her bill say this narrow focus ensures positive change in the country, not just the meting out of economic punishment. The House legislation "only targets companies in Sudan and specific sectors that are deeply problematic. It encourages them to adopt responsible business plans instead of leave the country," said Scott Wisor, senior field organizer for the Sudan Divestment Task Force.

Another weakness of Brown's approach, say critics, is that it could be struck down as unconstitutional -- a state foray into foreign policy, something forbidden by the U.S. Constitution. Basing the legislation on a list of countries and implementing a single procedure for those countries puts Michigan's policy at odds with U.S. State Department foreign policy, which varies by country. "Unless you make sure every component of state legislation is consistent with federal guidance on the issue you run the risk of having an unconstitutional piece of legislation," Wisor said.

In the past three years many states have initiated divestiture from Sudan. All successfully enacted state divestment legislation has been specific to a single country -- Sudan or Iran -- not the entire State Department list. According to the National Conference of State Legislatures only a few states -- Georgia, Florida, Missouri, New Jersey, Oklahoma -- have considered divestment legislation based on the State Department list of "state sponsors of terrorism."

Sen. Hansen Clarke (Dem. Dist. 1), who introduced legislation to divest from Sudan months ago, has another bill incorporated in the Republican anti-terrorism divestment package. His pragmatic perspective may represent hope for compromise in the coming weeks. "I don't think taxpayer dollars should be used to kill innocent people in the Sudan. The Republicans are taking a broader approach, but essentially those bills would do the same thing, so I would support their effort," Clarke said.

He hopes to help bring forth compromise and expects legislation to be passed in the House and Senate in January. "I believe we'll have a law to urge the state to divest money from businesses supporting the Sudanese government. I am a Democrat, but I don't care about the politics on this. I want to send a statement strongly that taxpayers' money should not fund genocide anywhere around the world," Clarke said.

(Photo credit: Economist, print edition August 2, 2007)

Tuesday, December 11, 2007

Slamming workers for having a history

Nolan Finley wrote this week about what he considers the stupidity of the Michigan public.

Finley says a recent EPIC MRA poll about public education and preparing students for the future finds that "Forty-six percent said the schools should train students for jobs they can get with a high school degree, while 41 percent said college preparation should be the mission."

Is it really so bad to wish that a publicly provided education could equip citizens for meaningful work with a living wage?

According to pollster Ed Sarpolous, Michigan residents still identify with a manufacturing culture and are not convinced that a college education is necessary to meet their employment needs. This should come as no surprise. For generations, factory work has provided a comfortable, middle-class standard of living to Michigan citizens. People with that perspective have been shaped by the experience of their parents, grand parents and great grand parents. This world view and narrative span generations not fiscal quarters. This is about people and places and history, not shareholders and quarterly profits and global capital movement.

Finley concludes that people in Michigan are stupid and lazy. He suggests a new strategy for promoting higher education among disadvantaged workers for whom he has contempt.

"Create an appetite for the jobs, and maybe job seekers will get off their backsides and get themselves some skills," writes Finley blaming the unemployed for not having work.

Here's another possibility: given the economic stresses befalling the blue-collar, Michigan middle-class maybe they are unwilling to go into debt again to get a college degree that may not allow them to pay back student loans. Maybe these folks are not ready to mortgage their future earning potential. Indeed they are still watching their nest eggs shrivel as real estate values collapse.

Finley should read the Michigan League for Human Services recent report, The Changing Face of Poverty in Michigan, which documents stagnating wages, rising costs, increasing foreclosures, and less access to health coverage.

Perhaps the EPIC MRA poll reveals skepticism about debt, pain from real economic stress and a resistance to acquiesce to globalization? Instead of blaming workers for wanting continuity of their family history and saying we need to better market higher education, Finley should examine cost barriers to higher education in an economy where poverty is increasing. If the unemployed are deciding between medicine and food, college tuition is probably not on their radar.

Saturday, December 8, 2007

Solace in small things -- from latkes to torture

Who would expect that a simple correction and apology could give comfort? From the Detroit Free Press:
The recipe for red-skin latkes with mushrooms (Dec. 2-8) should have said to mix the sautéed mushroom/onion mixture with the shredded potatoes."

Of course you blend the mushroom/onion mixture with the shredded potatoes. (Either that, or you set it aside as a topping.) You can read that and breathe deeply. All is right again with the latkes.

Setting the record straight, even the smallest of inconsequential details, affirms media credibility and our faith in the system. Our media care enough to correct the latke recipe in time to save our culinary reputation at the holidays.

Now, how about some large consequential details:

Did the CIA really destroy videos of brutal interrogations against the advice of the White House, Congress and the Justice Department? (source)

From today's NYT coverage, the lede:

"WASHINGTON, Dec. 7 — White House and Justice Department officials, along with senior members of Congress, advised the Central Intelligence Agency in 2003 against a plan to destroy hundreds of hours of videotapes showing the interrogations of two operatives of Al Qaeda, government officials said Friday."

Hundreds of hours of tapes showing the interrogations of two operatives?
"The chief of the agency’s clandestine service nevertheless ordered their destruction in November 2005, taking the step without notifying even the C.I.A.’s own top lawyer, John A. Rizzo, who was angry at the decision, the officials said."

Advice came in 2003, but the destruction was ordered in 2005?

Expect this story to linger and fester for months. It already has, like a tupperware container of leftovers, forgotten at the back of the fridge. It stinks and dazzles all at once with colors you never imagined. While you're reeling from the confusion of characters and subplot, don't forget to read the rest of the paper. Your latkes depend on it.

Friday, December 7, 2007

Consumer sentiment -- how low will it go?

Falling farther than expected, the Reuters/University of Michigan preliminary December number came in at 74.5 from 76.1 in November.

Here's the familiar list of causes :
subprime mess
credit crunch
fuel prices
gloom and doom
volatile markets
foreclosure crisis

Thursday, December 6, 2007

Dick DeVos at Cleary University

Cleary University’s Howell campus is hard to spot nestled low among the strip malls of Grand River Boulevard. Homeland security entrepreneurs gathered there Tuesday to learn about venture funding in their industry. After a morning of panels and presentations, aspiring contractors ate boxed lunches and heard a motivational keynote speech by Dick DeVos, who dropped in on the event by private helicopter. His apolitical message could have been titled “chicken soup for the entrepreneur’s soul.”

Afterwards, he shared some political thoughts.

On tax increases:
"You are trading a short term gain for a long-term huge risk. By raising taxes you are sending a signal to investors to job creators, both in Michigan and out of Michigan, that your costs of business are going up and may well go up more in the future if you stay here in Michigan."

"The only answer is economic growth and expansion and job creation."

On structural changes to government:
"We talked about a number of them in the campaign. One of them was MESA reform. But I have found when you go through an organization you end up making thousands of small changes that add up to a lot. There is this discussion that says what major programs are you going to terminate? And give me five ways to get there. There's probably going to be 5,000 ways to get there."

"My commitment was that we were not going to be raising taxes to balance the budget. We were going be looking for efficiencies in government and terminating programs no longer serving their original intent or serving the people of Michigan well. We were going to look for opportunities to reorganize. I don't think MEDC has reached its full potential. I would have started by changing that and brought that right straight into the governor's office."

On Granholm's performance:
"I am very concerned that this governor is taking Michigan in exactly the wrong direction. That we as a state are going to be paying a significant price. And come the next election, sadly, we may well be even further behind what is happening in the rest of the country."

On the January Primary:
"I think overall moving up the primary in the context of what is happening in the nation was a good thing for Michigan at the end of the day. I am sorry that the Democrats did not get everybody on the ballot. They had the opportunity, but I guess there was just too much infighting in their party. I think a primary is the right thing as opposed to a caucus process. That being said, I think the whole thing is too early. "

"If you ask me should we change the system of primaries in this country, my answer is 'absolutely.'"

On partisanship:
"In my view it's not politics that's messing us up. What's messing us up at this point is trust. There is a breakdown in trust. I have lots of friends I disagree with on issues, but I can work with them because I trust them."

"Trust is one of those things that is slowly built and easily broken."

"With the amount of behind the scenes changes and violations that have broken trust, term limits wouldn't have mattered. That violation of trust terminated a lot of relationships and that's really the loss."

On a run for governor:
"I am getting a lot of encouragement from people to consider running again. I am considering it, but frankly have not made a decision at this point."

Wednesday, December 5, 2007

"You have to keep changing" -- Sondra O'Donnell on small business

Yoga practitioner Sondra O'Donnell is a small-business success who shows the power of starting where you are and building on what you know. Three years ago she opened Sun Moon Yoga Studio in Ann Arbor, a university town with almost as many yoga studios as coffee shops. With nearly 20 years experience practicing and teaching yoga, O'Donnell had a solid client base, understood her field and was ready to create her own studio.

She did just that and succeeded. O'Donnell has proven herself  in business and warns of the hardships of a start-up. "Small-business owners work hard. It's quite a juggle. You have to do everything, and you don't know what is going to come in."

Finding a niche bolstered O'Donnell's staying power in Michigan's struggling economy and in Ann Arbor's competitive yoga market. She offers the only teacher certification program in Ann Arbor. "My main goal has been to do teacher certification. That is really what my heart and soul are in," she said. Her students come from as far as Grand Rapids and Howell for the certification program.

O'Donnell stresses that businesses and the people who run them must be responsive to changes around them. "You have to keep creating and innovating. You can't sit and look at how things were; you have to keep changing." She has done that by creating classes to meet student demand and interest.

Her own family had to grapple with changes wrought by the declining domestic auto industry. Growing up in the downriver Detroit area, O'Donnell was aware of the auto industry as the lifeblood of Michigan's economy. Five years ago, after 30 years in business, her father's small auto-parts-packaging company was bought out by a larger competitor.

Bad economic news hits us daily in Michigan, and it is easy to feel demoralized. The mainstream media present economic news principally in terms of multinationals, yet millions of people across the country are self-employed or own small businesses. These small and micro-businesses strengthen local communities and affirm the human scale of economy as a path to a successful and satisfying life.

In 2006 about 10 percent of Michigan's work force was self-employed - 480,000 people in a work force of 5 million. The self-employed account for more than half of the state's 849,500 small businesses, according to U.S. Small Business Administration data.

O'Donnell advises people starting small businesses to work within their means and keep expenses low. "I didn't take out a single loan. We have kept the costs to a minimum. I got a lot of building materials from the Re-use Center," she said.

In fact O'Donnell single-handedly transformed the building she rents from a warehouse into a welcoming yoga studio -- installing a cork floor, insulation, drywall, lighting and more on her own at night after her children were asleep. "I would come here at 9 p.m. and work until 4 in the morning," she said. "The next day, I'd have to make sure the tools were put away before teaching classes."

If she needs to expand the business, her vision is to take the training program worldwide -- teaching on location around the globe. She is currently developing a second portion to her certification training for this purpose.

O'Donnell attributes her business resilience to her yoga practice and knowledge of the sutras, sacred Hindu texts. "What gets me through is nonattachment to the studio. I just take it as it is today, this moment, without expectations," she said.

Advising a balanced perspective for business owners, she said: "The bottom line is if you are so engrossed and attached that the business becomes everything you are, you are going to go crazy. You have to let the business be what it is."

Helping students find balance in the midst of difficulty is at the heart of O'Donnell's teaching. "We take our stress into our bodies and see ourselves as caged in our current situation. If we can create a sense of peaceful strength, we find a balance between release and strength."

She empowers students by helping them find their inherent wholeness. "People don't always want to hear that yoga is not about fixing you. As teachers we come here to teach you that you have the tools inside you. You are fixed; you just don't realize it."

Tuesday, December 4, 2007

Michigan Dems and GOP collaborate on primary proposal

Debbie Dingell and Saul Anuzis have unveiled a bi-partisan proposal to bring sanity and fairness to election scheduling. Could this end the front-loading frenzy?

From the Michigan GOP press release:

The Dingell-Anuzis plan would divide up states into six regions. There would be six sub-regions set up in each region, designating a representative cross section of America. The national parties would then set six distinct dates for when contests would be held. A lottery would determine the dates each designated sub-region could hold a presidential primary or caucus and no one region could be selected to go first for two consecutive presidential cycles, eliminating incentives for states to break the rules.

The Dingell-Anuzis presidential selection compromise plan will be sent to both Republican and Democratic national committees for review and consideration for the 2012 cycle, and beyond. The plan aims to create a permanent solution that would continue to allow party organizations, and not federal legislation, to dictate the nominee selection process.

Saturday, December 1, 2007

Good news, Dems lose delegates

It's official -- the DNC has voted to strip the Michigan Democratic Party of its 156 delegates to the 2008 presidential nominating convention. Michigan's Democratic primary is not even a beauty contest; it is utterly irrelevant.

What was behind that vote? Most likely, a desire to take an unfair advantage from Hillary Clinton, the only Democratic front runner on the Michigan ballot.

Still, there could be a bright spot in this. Democrats in the state house now have no excuse not to get things done. No longer distracted by intra-party conflict over presidential politics, they can unite for the sake of the people of Michigan.

They are free to work together, to set a course and follow it, unhindered by loyalties to Clinton or Obama or Edwards. This is great news.

All we need now is for the GOP to be slightly less oppositional.

Wednesday, November 28, 2007

Michigan's primary pain

Our embarrassing primary saga appears resolved. The Michigan Democratic Party voted to endorse the January 15 primary as their method for choosing a presidential nominee. The state Republican Party continues to stand by the primary. Indeed, it was the Republican Supreme Court that overturned lower court rulings that would have stopped the election. And early this week it was the GOP controlled Senate that declined to act on legislation that could have restored Democratic front runners to the ballot.

This resolution would feel like a relief, if it weren't so disappointing. The process recapitulates the dysfunction we witnessed around the state budget crisis in September and October. Once again, after weeks of partisanship between an unfocused Democratic Party and an oppositional GOP we have an unremarkable result.

Posturing, grand standing, and intra-party bickering have created a primary that looks just as it did weeks ago: Senator Hillary Clinton will be the only democratic front runner on the ballot and the GOP field will be complete.

The early primary was to highlight Michigan's issues nationally and bring economic activity to Michigan. The only attention it has brought was from New Hampshire election officials waiting to determine their date -- their state law requires their primary be the first in the nation. Once Michigan's Supreme Court ruled, New Hampshire moved swiftly to set their date and national attention immediately moved back to candidate activity in Iowa and New Hampshire.

Michigan, take a number and get in line. Or was that get in line and take a number? The Democratic party seems to have less tolerance for bending rules than the GOP. After all, GOP candidates have not shot themselves or their party in the foot on principle to demonstrate conformity to party rules.

And what of Michigan's issues? The early primary was to bring national attention to Michigan's sorry economic state. Michigan is an intense example of the devastation wrought by financialization and globalization. Metro Detroit recently topped the nation for crime and has one of the highest residential foreclosure rates. The state leads the nation in unemployment. Job losses will continue through 2008. State finances are still not truly sound. But why should any presidential candidate care? Can any of them bring good news to Michigan?

Don't hold your breath. The presidential campaign is about one thing -- winning. Making things better for Michigan? That's Michigan's problem.

Monday, November 26, 2007

A good dinner spoiled -- dioxin in fish

My dad always brought home his full share of walleye. His annual trip to Detroit Lakes, Minnesota, meant amazing fish dinners year round. It was the early 1970s. We never worried that the fish might not be good for our health. In fact, it always seemed to bring a distant purity to our suburban dinner table. This was righteous, natural food, the prize of a hard-working man taking some peace away from his cares, which were many.

Today, if you are smart, you pay attention to fish consumption advisories. Every state issues them. Some states are direct about it; some bury the information layers deep on departmental or agency websites. No matter where you live, you are a fool not to check the advisories.

Michigan's Department of Community Health (MDCH) is issuing an Interim Fish Consumption Advisory for the Saginaw River. "This action extends the advisory currently in effect for the Tittabawassee River to the entire length of the Saginaw River. " (source) The level of dioxin found is believed to be the highest ever -- 1.6 million parts of dioxin per trillion of water. This is about 20 times higher than any other known dioxin contamination.

What have we done? Most likely the dioxins in question are from the productivity of Dow Chemical Company. Industry makes our lives "better." That was the idea for decades. But short-lived conveniences give way to generations-long environmental destruction. In the United States, we know better than to trade short term economic gain for environmental harm and still we get it wrong. We roll back laws protecting the environment and in Michigan, take away the citizen's right to sue to protect the environment we hold in common.

The developing world is learning on its own what we continue to discover with every new patch of toxic waste. In particular, China is sacrificing environmental quality for production.

Read about China:
China’s Environmental Crisis Catalyzes New Democracy Movement

Then say a prayer for the Saginaw River and her people. And say one more for China.

Friday, November 23, 2007

To buy or not to buy

This Friday is Buy Nothing Day, an informal day of protest by social activists who oppose consumerism. It's also Black Friday, the start of the holiday shopping season. The name sounds ominous but is meant to be hopeful -- we're talking about black ink, that is, big profits for retailers. These competing media events mark opposing views of consumerism -- one urges consumption, the other reflection. Do you fulfill your destiny as bargain hunter and a consumer or do you assert your dignity as a human being, a global citizen passively resisting, in solidarity with others?

Even in our troubled state economy you can live your values, buy nothing on Friday and have a clear conscience. Often hyped as the "busiest shopping day of the year," it actually isn't. Some Americans do wait in line as early as 4 a.m. to get dirt-cheap electronics, but more procrastinate and do the bulk of their holiday shopping between December 21-23. So if you choose to unite in protest on Buy Nothing Day, you won't be dooming Michigan retailers.

It's the whole season that makes or breaks retailers. Consumer spending accounts for more than two thirds of all economic activity. The last six weeks of the year are the home stretch for retailers who make about 40 percent of annual profits in that period. What worries retailers this year is that consumers are low on cash and credit. Until the housing bust, consumers had dutifully continued shopping, tapping home equity like a personal ATM. They believed their equity was real, but it was only a financial illusion.

A financial illusion sold with an advertising illusion -- consumption equals empowerment. Access to credit signifies status and proffers the freedom to pursue your dreams. That's the fantasy sold by credit card companies and banks to people who forgot they lived in the real economy. Thanks to the housing slump, a house is once again a house.

The real economy is where human beings dwell. This is where a house provides shelter from the elements. This is where hunger and poverty oppress millions. This is where elderly choose between medicine and food. This is where you live within your means and discover you are farther from the financialized fantasy of the good life than marketers want you to know.

On Friday, as any day, you have a choice between real life and fiction. You can choose solidarity with the less fortunate who lack easy credit and access to over-consumption or you can pretend to afford an unsustainable fantasy. Live more. Buy nothing.

Wednesday, November 21, 2007

November consumer confidence, lowest since after Hurricane Katrina

As we enter the most important season for retailers, the Reuters/University of Michigan consumer sentiment index for November came in at 76.1.

Retailers are bracing for cautious consumers with limited credit spending conservatively.

Classical music not all whites in wigs

"It isn't right for people to grow up thinking that classical music is all white men in wigs." These are the words of Bill Zick, who wants people to know that minorities played an important role in the history of classical music.

Zick's AfriClassical website documents the history of minorities composing and performing classical music. His work combines a love of classical music with a commitment to racial equality.

A retired administrative law judge based in Ann Arbor, Zick has created an internationally recognized education resource on African heritage in classical music. The site contains biographies and audio samples of 52 composers and musicians and spans 500 years of music history. Last year, departments of education in 15 states used the resource.

"People of color have always been a part of classical music and that should be public knowledge," said Zick. In creating and maintaining his blog and website, Zick's main goal is education. "I want people to know the history of blacks in classical music. I want them to know that Henry VIII had a black trumpeter. I want them to know that Beethoven wrote his most challenging sonata for a black violinist," said Zick.

Although racial minorities have a long history in classical music, they are still under-represented among professional symphony orchestras. According to the Sphinx Organization, a Detroit-based advocacy and education organization, less than 4 percent of symphony orchestra members in the U.S. are African-American or Latino.

Zick, a white American, began his lifelong interest in civil rights in his youth. "I grew up with the sense that there was a great societal wrong about the way people of color were treated," he said. "My father was a fan of jazz and knew about racial inequality." His father would attend segregated jazz concerts in the 1930s in Flint. Zick said that after the white bands would play, whites were required to leave and then black performers could take the stage. He said his father would hide in the theater "because after midnight when the black musicians were allowed to play, that's when the music really got good."

He also had an early awareness of racial violence. "I grew up hearing my parents talk about living in Detroit in 1943. During the riots, my mother witnessed a mob of whites chase a black man, catch him and beat him," Zick said. "She is still haunted by what she saw and has always feared that the man was killed." During World War II, racial violence erupted in Detroit among factory workers. It arose from the stresses of a housing shortage, racial tension and inequality among workers who migrated from the south.

Zick hopes his efforts will lead to fair treatment of minorities by raising awareness of their accomplishments. "Regardless of your race, the more you learn about this history, the more basis you have for respecting people of color," he said.

The website gets over 100,000 visits per year, but not all are from educators or supporters of the work. Zick says that some white nationalists have visited the site and left disparaging remarks -- evidence of the persistent prejudice he seeks to mitigate.

Tuesday, November 20, 2007

Detroit crime tops nation

If you've followed this blog for any length of time, you know I enjoy numbers. Congressional Quarterly Publications announced, this week, that Detroit is the nation's most dangerous city. Flint placed third. The American Society of Criminology criticized the rankings, but CQ defended the survey saying it was a straight forward interpretation of FBI data. Chicago and Minneapolis were not included in the report due to incomplete data. What kind of list omits two major metropolitan areas? An incomplete one.

From a Free Press article:
“What I take exception to is the use of these statistics and the damage they inflict on a number of these cities,” said Mayor Duffy of Rochester, N.Y.

The damage does not stop at the city limits, though. Detroit is Michigan's city. Michigan's economic viability depends on Detroit's economic viability. Detroit's economy depends on tourism. Think for a moment about Detroit's efforts to become a destination city. Does this new information make it more likely or less likely a person from a lovely suburb will visit the MGM Grand Casino for the weekend? More or less likely a person from Windsor will come over to visit the DIA? More or less likely someone from Brighton will go to a Detroit Symphony concert?

This ranking will reinforce negative attitudes, prejudices and fears about all these cities. Lacking context or explanation, the ranking becomes an excuse to avoid and scorn major cities and cultural centers.

Here are the top 25:
1. Detroit 407.2
2. St. Louis 406.2
3. Flint, Mich. 381.0
4. Oakland, Calif. 338.9
5. Camden, N.J. 323.8
6. Birmingham, Ala. 268.8
7. North Charleston, S.C. 254.3
8. Memphis, Tenn. 245.6
9. Richmond, Calif. 245.1
10. Cleveland 244.4
11. Orlando, Fla. 237.4
12. Baltimore 236.7
13. Little Rock, Ark. 233.8
14. Compton, Calif. 223.6
15. Youngstown, Ohio 222.0
16. Cincinnati 218.3
17. Gary, Ind. 214.0
18. Kansas City, Mo. 203.4
19. Dayton, Ohio 201.5
20. Newark, N.J. 197.3
21. Philadelphia 192.9
22. Atlanta 189.9
23. Jackson, Miss. 188.8
24. Buffalo, N.Y. 187.8
25. Kansas City, Kan. 187.6

Monday, November 19, 2007

Michigan wants a piece of the homeland security pie

Homeland security is big business and the Michigan Homeland Security Consortium (MIHSC) wants to bring more of it to Michigan. The group plans to stimulate economic growth by getting funding opportunities for young companies.

"There is lots of opportunity and pioneering in the homeland security sector. It is ripe for innovation," said Keith Brophy, chairman and co-founder of MIHSC, a nonprofit, trade organization started in June of 2006.  "We realized that for this industry to get off the ground, the private sector would have to give it momentum." Although the state's 21st Century Jobs Fund targets homeland security for growth, MIHSC is creating additional venture capital opportunities for new companies.

Last week, MIHSC unveiled the Homeland Security Resource Fund, a joint venture with Battle Creek Unlimited (BCU), a regional economic development organization.  The new fund will provide money and guidance to homeland security companies in Michigan.  "We want to help create synergy in economic development." said Jack Miner, Battle Creek Ventures managing director.  "We want to do everything we can in Battle Creek to help develop the business of homeland security and having this fund creates another asset."

On Dec. 4, MIHSC will host its 2nd annual Michigan Homeland Security Venture & Angel Capital Symposium at Cleary University, in Howell, featuring keynote speaker Dick DeVos. MIHSC expects at least 100 attendees.

Homeland security spending is growing nationally. In "What Has Homeland Security Cost? An Assessment: 2001-2005,"  The Federal Reserve Bank of New York estimated "that homeland security spending climbed from $56.0 billion in 2001 to $99.5 billion in 2005."

The Homeland Security Act of 2002 anticipated this boom. In addition to defining the mission of the Department of Homeland Security, a subsection of the act created liability protection for makers and sellers of "qualified anti-terrorism technologies." Today, the Department of Homeland Security website Open for Business portal "centralizes information to let every business in America know how to work with the Department of Homeland Security."

MIHSC has support in Lansing and Washington, D.C.  U.S. Rep. Tim Walberg and state Sens. Valde Garcia and Cameron Brown all spoke at the announcement of the Resource Fund.  Brown and Garcia are chair and vice chair of the Senate Homeland Security and Emerging Technologies Committee, respectively. Garcia also chairs the Michigan Homeland Security Roundtable for MIHSC.

During this current economic slump, making the case for any new business in Michigan is an easy sell. Still, advocates for homeland security evoke the glory of Michigan's past to justify current homeland security development. They conflate mobilization for World War II with increasing homeland security business now.

"We will soon be celebrating Dec. 7th, the anniversary of Pearl Harbor Day," Brown said. "That unprovoked attack led Michigan to be in the forefront of the Allied mobilization to stop Imperial Japan and Nazi Germany. Michigan became known as the Arsenal of Democracy." Linking past and present, he concluded, "The Michigan Senate's new Homeland Security and Emerging Technologies Committee, of which Sen. Garcia is vice chair, was created last January with the goal of improving public safety but also to return Michigan to its leadership role in the homeland security sector."

Closing his remarks, Garcia said, "Michigan needs to be known as the Arsenal of Democracy."

Brophy's view is more pragmatic: "We just need more state government recognition that this is a sector worth fostering."

Friday, November 16, 2007

Court to delay primary decision (UPDATE)

cross posted at Huffington Post

UPDATE: Early this evening (Friday, Nov. 16) Michigan Messenger reported that the Court of Appeals has found the primary election law unconstitutional. The state can now take an appeal to the State Supreme Court.

The Michigan Court of Appeals said it needs several more days to decide if the state's primary election law is unconstitutional. The court is considering whether primary election voting records should be public record or can become the private property of political parties.

The case, brought by political consultant Mark Grebner (Democrat), contends that denying citizen access to voting records is unconstitutional. Last week, an Ingham County Circuit Court agreed. Secretary of State, Terry Lynn Land (Republican) immediately appealed. The Michigan Court of Appeals will likely decide before December 1st, the deadline to begin mailing absentee ballots oversees.

Grebner said he is not opposed to the primary, only the handling of voter records. While legislation could fix the problem, how that would play out is anybody's guess. Democrats control the House. Republicans hold a slim, yet effective majority in the Senate. But who wants what? Although the state party leadership publicly says they want a primary, supporters of various candidates want different things and each party is rife with internal conflict. Can legislators build bi-partisan alliances to accomplish common goals? Would Republicans break ranks to support individual candidates?

Hillary Clinton supporters would be delighted with the January 15 primary as it stands - she's the only Democratic front-runner on the ballot. Romney and McCain supporters would be thrilled with a state nominating convention - where the party activists do the choosing. Lesser Republican candidates certainly would do better with the January primary, but cross-over voting from Democrats could seriously skew the result.

Even if the Court allows the primary to proceed, House Bill 5353 poses the next threat - it would cancel the primary outright. According to staff in the office of lead sponsor, Representative Martin Griffin (Democrat), the Court of Appeals decision will determine the next steps for H.B. 5353. On October 24 the bill was sent to the House Oversight and Investigations Committee.

Thursday, November 15, 2007

Financialization brought you the "subprime crisis"

Banks may lose $400 billion in bad investments relating to the U.S. subprime market. (source)

That's the bank side of the story. What about people in houses? What will they lose? How many children will be affected? How many families' financial prospects dashed? How many made homeless?

Financialization sits at the center of the crisis, which is completely man-made.

Acquaint yourself with this shift of priorities from the real sector (where a house is a house) to the financial sector (where a house spawns a securitized debt instrument) by reading "Financialization: What It Is and Why It Matters," by economics professor Thomas Palley, UMass Amherst.

From the abstract?
"Financialization is a process whereby financial markets, financial institutions and financial elites gain greater influence over economic policy and economic outcomes. Financialization transforms the functioning of economic system at both the macro and micro levels. Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector; (2) transfer income from the real sector to the financial sector; and (3) increase income inequality and contribute to wage stagnation. There are reasons to believe that financialization may render the economy prone to risk of debt-deflation and prolonged recession."

Happy reading, it is not. Essential reading? Yes.

Tuesday, November 13, 2007

The art of governing

Don't lose hope. Although our elected officials have a hard job, it does not require genius or inspiration.

The legislature doesn't have to make music or create something beautiful or inspiring or timeless. They just need to respond to current economic and social circumstances. They merely need to manage public money.

They don't have to write documents that must last centuries or qualify as literature. They just need to make laws that reflect sound public policy for a time.

They don't have to invent fairness, justice, freedom and equality. They just have to honor and uphold them.

They don't have to play violin on a tightrope. Some days, for variety we all might wish they did.

Monday, November 12, 2007

MEDC shoots for more defense dollars

cross posted at Michigan Messenger

The Michigan Economic Development Corporation wants to break Michigan's dependence on the auto industry. State officials hope the new Defense Contract Coordination Center (DC3) will help businesses reposition themselves to win military contracts.

"I proposed creating an organization in state government to bring defense jobs to Michigan," said state Sen. Valde Garcia (R-Dist. 22). "During World War II, we were known as the Arsenal of Democracy. Given our history, manufacturing capacity and our trained work force, I thought it would be a natural fit and a great way to transition from where we are with the auto industry to diversifying the economy."

Garcia imagines Michigan companies bringing factories to full production to replace equipment lost in the Iraq war. This could include anything from vehicles to body armor.

After an MEDC study found Garcia's concept viable, legislation signed in 2006 made the DC3 a reality. MEDC will administer the center through the 21st Century Jobs Fund -- Gov. Jennifer Granholm's $2 billion economic development initiative -- with a one-time $10 million appropriation.

Garcia expects the DC3 to fill immediate employment needs in Michigan. "It will take years to diversify the economy with biotech, advanced automotive and alternative energy. In the meantime we needed to come up with something that will put people to work. This is likely to employ people right away," Garcia said.

While that might hold in the short term, a new study -- from the Political Economy Research Institute at the University of Massachusetts Amherst -- finds defense spending inferior to other public investments in creating jobs. "What I can tell you from the study is that the employment impact of putting money into education is going to be larger than the employment impact of putting it into military procurement contracts," said professor Robert Pollin, lead author of the study, "The Employment Effects of Downsizing the U.S. Military."

Even so, in the context of Michigan's desperately struggling economy, Pollin allows that competing for defense contracts makes sense. "In a state like Michigan, where you do have a problem with job creation and there are these contracts for military procurement, of course you should compete aggressively to get them. Why shouldn't Michigan get them as opposed to Minnesota or Iowa or someplace else?" he said.

Retired Marine Maj. Gen. Bradley Lott assumed leadership of DC3 in June. While advocating government contract procurement, Lott advises businesses to cultivate a diverse client base. "I never recommend anybody become just a defense or homeland security kind of supplier. We want to diversify our industrial base," Lott said. He wants to help Michigan's economy, but has encountered resistance to defense and government contracting across the state.

In his first months on the job, Lott traveled the state listening to potential constituents and making the case for pursuing government contracts. He said people at every presentation questioned doing business with the federal government and pursuing defense contracts in the midst of an unpopular war.

Lott said if people don't like defense contracts, there are other things they can sell to the federal government, such as baled hay or soap.

Lott's core strategy is to get Michigan companies involved early in the contracting process. "If you are reacting to a contract when it is published, you are considered a Johnny-come-lately," Lott said. His goal is to teach companies about the entire contracting process -- which can take two to three years -- so that they can participate in working groups at the earliest stages. These working groups actually help shape contract requirements.

The DC3 will also train Michigan's 12 Procurement Technical Assistance Centers (PTACs) to act earlier in the contracting process. PTACs -- nonprofits funded by the Defense Logistics Agency, the MEDC and local partners -- connect businesses with contracting opportunities.

Over the next three months, Lott will staff the organization and create a curriculum and training materials. After that, DC3 staff will begin to train personnel at PTACs and businesses around the state.

With $10 million in seed money, 34 years of service in the Marines, support of the Legislature, a vast array of engineering and manufacturing capacity at the ready, and a commitment to help the state, Lott is set to complete his mission.

"We are initially going to increase contracts, which is dollars, which is jobs. But in my heart, I want to see the state of Michigan regain recognition as the Arsenal of Democracy," Lott said.

Cleaning house in Michigan

I’m a fan of Clean House, a low budget home make-over show on the Style Network. Reruns play every morning while I drink coffee, open my eyes to the day and scan the news online. Niecy Nash, diva hostess, implores people to let go of their “foolishness.” She charms them to release precious junk – flamingos, surf boards snapped in two, chipped coffee mugs, unopened wedding gifts – in return for clarity, order and space.

It’s the same script every show: cheerful make-over team intervenes with pathologically messy family; everyone cleans house, has yard sale; family gets new style and second chance; gratitude and smiles all around. No matter how many times I see these episodes, I’m comforted by the resolution of someone else’s mess, their relief and freedom from bondage to stuff and the past.

Scanning the news of Michigan’s economy and politics in Lansing also feels like watching reruns, but without the catharsis of a neat and tidy resolution and the peace of knowing it’s not my mess. If you live in Michigan, it is your mess and these are your reruns. Your family’s prospects grow in the economic present. Heavy industrial clutter, obsolete beliefs, and careers snapped in two dog us. The make-over team in Lansing lacks unified leadership and has too many designers.

On Clean House, folks part with clutter at fire sale prices. They paid full retail, but they’ll take tag sale premium for the sake of a new beginning. That’s the choice facing homeowners trying to sell in Michigan right now. That’s the choice for workers considering buyouts. And college graduates looking for work.

Since we lack a designer and unified vision, we have to be responsible for our choices and futures. No one will bail us out of this and we don’t have the time to wait for new leadership. Instead of following every Lansing rerun and playing bit parts, citizens need to write a new script and claim the lead role. Be sure to vote. Write letters. Take action in the interest of your family, community and future. Start at your kitchen table and work out from there. And think about taking a mainstream media holiday – you’ll only be missing reruns!

Saturday, November 10, 2007

Illinois beats number 1 Ohio State -- 28, 21

Wow! As an Illini, I absolutely must take a moment to acknowledge this. Illinois beat Ohio State at Ohio. A historic upset.

Fans of Michigan should be grateful, as this gives Michigan a shot at the Rose Bowl.

Consumer sentiment , consumer spending and the auto industry

Reuters reports that the preliminary University of Michigan Consumer Sentiment Index for November has fallen to 75.0,its lowest level since October of 2005. Economists expected a reading of 80.0. The index measures how consumers feel about their personal economic situation and the future prospects for the economy generally.

The final figure for November will be released at the end of the month.

What this means is that consumers will likely spend less in the coming months -- the last quarter of the year. The holiday season makes or breaks most retailers and this year is going to be tough. Consumers will be highly selective in their purchases, especially as they choose toys, hoping to find safe ones. This will also mean weaker car sales.

Higher energy costs, less home equity, and tighter credit all mean less consumer spending.

This week, Fed. Chair Bernanke said the national economy will get worse before it gets better, but stopped short of saying recession was inevitable. He can't predict recession. But "far worse" from where I'm sitting sure looks like recession.

Here in Michigan, we have been feeling the pain for a while. "One state recession" has been the mantra of certain analysts for months. And it's a hot potato we'd be happy to toss.

Automakers expect the weak housing market and credit crunch to affect sales in the last quarter of the year. What happens nationally happens in Michigan. What affects the auto industry rocks the economic foundation of Michigan even though we are frantically working to diversify our auto-centric economy.

This week, Dave Cole, chairman of the Center for Automotive Research, had a positive assessment for General Motors' prospects. He says they are making necessary changes to become profitable in North America. “Last year, GM took $9 billion out of structural costs of operating the business, the value of that was about $2000 per vehicle and this latest labor contract is worth about $1000 per vehicle.”

“They are in the process of dramatic restructuring and the fruits of that are still down the road. If the economy softens next year, that will put it off a little bit,"Cole said. “They basically have fixed the company and planted the seed, but the harvest is ahead.”

How far ahead is the unanswerable question..

Friday, November 9, 2007

Michigan State University among scientists' best places to work

Michigan State University ranks 16th in a recent survey of the best places for scientists to work. The November issue of The Scientist Magazine ranked the top U.S. and international academic institutions according results of an online survey conducted by the magazine. The survey was based on 2,072 responses from readers who identified themselves as life scientists in tenured or tenure-track positions in academia and non-commercial research institutions. The survey asked respondents about job satisfaction, peer relationships, pay, research resources, management, and infrastructure. MSU was the only Michigan institution to make the ranking.

Wednesday, November 7, 2007

GM: #1 in sales, #1 in losses

Less than a month ago, GM touted its status as number 1 in sales, by 10,000 vehicles globally. Take that Toyota. Unfortunately, GM is just not profitable. As GM takes a $39 billion loss, Toyota boasts third quarter profits of $11 billion.

According to Toyota, gains in emerging markets offset a drop in U.S. market profits. It's a global game.

Fortunately, GM is also seeking growth on other continents.
The Detroit News reports that "GM said it recorded a record third-quarter of global sales at 2.39 million cars and trucks, up 4 percent from a year ago."

GM is trying to balance a difficult U.S. market with opportunity elsewhere. How can GM trim U.S. costs, maintain U.S. sales and expand everywhere else? Patience, luck and innovation. Maybe high mileage vehicles in the U.S. as gas prices increase? Perhaps rapid development and commercialization of alternative fuel technology?

Time to wait and see...

Monday, November 5, 2007

The Sphinx at Smith College

Sometimes it's okay to feel really good about Michigan. Even southeast lower Michigan.

This week, Aaron Dworkin, founder and director of the Detroit-based Sphinx Organization visited Smith College. His appearance was part of Smith's annual Otelia Cromwell celebration. Cromwell was the first African American to graduate from Smith. She transferred in her junior year from Howard in 1898.

Dworkin, a University of Michigan School of Music graduate, founded the Sphinx Organization to advocate for greater representation of minority musicians in the rarefied, exclusive realm of classical music. Today, his ten-year-old organization nurtures minority classical musicians from elementary school through college and to professional careers.

Blacks and latinos are still underrepresented among orchestral membership today.

But Dworkin and his organization persevere in working to change that with programs like: Sphinx Prep at Wayne State, Harlem Quartet School Dayz, the Instrument Fund, and the annual Sphinx Competition.

Dworkin has vision, drive, and commitment to his mission. He's a Michigan treasure.

Thursday, November 1, 2007

Building sustainable communities in Michigan

Making livable communities out of distressed ones takes money, creativity and teamwork.

In the midst of Michigan's economic upheaval, economic development organizations are helping local communities find a way back to sustainability and livability.

Providing housing is the first step in redeveloping vulnerable neighborhoods and local community development organizations collaborate with schools, hospitals, banks, small businesses, foundations and corporations to create sustainable communities. Several specialized private nonprofits help them navigate these complex efforts.

Michigan Local Initiatives Support Corp. (LISC), Detroit LISC and the Community Economic Development Association of Michigan (CEDAM) coordinate local development projects in Michigan. They will jointly host the Building Sustainable Communities Conference on Wednesday, Nov. 7, from 8:30 a.m. to 4:15 p.m., at the Holiday Inn South in Lansing. The meeting is intended for community development organizations, human service nonprofits, policy makers, community action agencies, housing agencies and potential funding sources.

"We're rolling out the Sustainable Communities Initiative (SCI) which is about building communities that are desirable to live in," said Tahirih Ziegler, executive director of Michigan LISC. The new initiative focuses on five areas: affordable housing, regional economic development and micro-enterprise development, increasing family income and wealth, improving access to quality education - preschool through adult, and supporting healthy environments and lifestyles. The program pushes community development beyond just providing housing, she added.

Since 1990 Detroit LISC has invested more than $100 million and leveraged $650 million for revitalization in Detroit, according to the group's website. Michigan LISC, has invested $100.5 million and leveraged $346.3 million since 1988. Detroit LISC and Michigan LISC are local affiliates of a national organization that boasts investing $7.8 billion nationwide over 25 years.

Overall, sums spent in redevelopment are vast, but smaller investments on a human scale are key to local projects. Micro enterprise development is central to revitalizing distressed areas, said Ziegler, adding, "It's been overlooked...86 percent of small businesses are micro enterprises. At the conference we're going to talk about how we can rebuild neighborhoods using local businesses and local services."

In southwest Detroit, LISC's Neighborhoods Now program built 30 single-family homes for sale to low-and moderate-income residents. The homes are located in Mexicantown, the site of aggressive commercial redevelopment, including the 45,000-square-foot Mexicantown International Welcome Center and Mercado.

The Sustainable Communities Conference comes at a time of increasing need in Michigan, which has the nation's highest unemployment rate, a shrinking workforce, lower-than-average college completion rates, high residential foreclosure rates and significant child poverty.

"As the public sector shrinks the nonprofit sector is asked to take on more," said Angie Gaabo, executive director of CEDAM, acknowledging the impact of Michigan's current state funding crisis. The need for community development assistance spans urban and rural Michigan, she added.

"There is deep poverty in the rural parts of Michigan," Gaabo said. "We are interested in getting a rural caucus started in the legislature. Rural communities have some of the highest poverty rates in the state. According to the U.S. Census Bureau, in 2004 Michigan's poverty rate was 12.5 percent, nearly even with the national rate of 12.7 percent. Yet rural counties' poverty rates topped 15 percent (Luce 16.2 percent, Mecosta 15.3 percent, Gogebic 15.3 percent, Isabella 15.2 percent). Urban poverty in Wayne County is the highest in the state at 18.8 percent

"Right now the big success we can point to is the Living in Michigan Campaign," Gaabo said. "It's an effort to create a dedicated state source of revenue for housing and community development. We are getting close to having an appropriation for the Housing and Community Development Fund in this budget, which would be a first in Michigan. Considering the state of the budget, this would be a big victory."

According to its website, the Living in Michigan Campaign aims to establish "a $100 million-a-year program that will leverage an additional $280 million investment annually." Proponents claim the MHCDF "will create more than 6,000 good-paying jobs and generate $21 million in state and local taxes."

"LISC's role has always been to advance partnerships, invest in neighborhoods and ultimately improve lives," Ziegler said.

Wednesday, October 31, 2007

Happy Birthday Mighty Mac!

Fifty years ago, on November 1, 1957 the Mackinac Bridge opened for business. Connecting our peninsulas, the Mighty Mac is five miles long, with a suspension bridge spanning 8,614 feet. The Mighty Mac is the third longest suspension bridge in the world.

If you can't get there to celebrate, check out these websites for a vicarious thrill.

Mackinac Bridge Authority
Straights of Mackinac and Mackinac Bridge -- loaded with pictures, including some from celebrations this summer.
Mackinac Bridge Cam
Mackinac Bridge Museum

Monday, October 29, 2007

GM in China -- cozy commitment in communist country

People's Republic of China embraces Michigan's number one son, GM.

GM has announced it will set up a $250 million alternative-fuel research center in Shanghai to produce commercially viable alternatives to gasoline engines. According to the AP, GM also will contribute $5 million to create an automotive energy research center in Beijing with elite Tsinghua University and Shanghai Automotive Industries Corp., one of GM's local partners.

Could this work have been done in Michigan? Aren't we into developing public/private partnerships? Don't we have the academic, research and development infrastructure to handle such a project? Hasn't the state made alternative energy and advanced automotive manufacturing top economic development priorities? Isn't state government dumping millions and millions of dollars into these priorities? What the heck is going on in the Tri-tech Corridor?

The AP reports that "The new research center will work on alternative fuels, alternative propulsion systems such as fuel cells and technology to improve energy efficiency, Wagoner said. He said it will focus on the booming Chinese market but its technology also will exported to other markets."

"Wagoner said GM picked China for the research center because of its fast-growing vehicle market, large pool of talented researchers and the communist government's push to develop alternative energy sources."

There you have it. We are not competing with Mississippi; we are competing with China. And they won the deal. Wagoner was wooed by favorable business conditions created by the communist leadership in China. (So was Walmart.) Governor Granholm and our state legislature just can't keep up with Ju Jintao and his Party. China has made alternative energy a national priority. While our state economy may be the size of Sweden's, we simply cannot compete with the one-party People's Republic of China, 1,321,851,888 comrades strong. We are only 10 million and we hardly share a unity of purpose.

What else does China have that we don't? An ascendant middle class with lots of disposable income. Even if only 20 percent of the Chinese population are middle class, that is 264,370,377 people, nearly the population of the United States.

In spite of questionable labor practices, China has scads of consumers with wads of cash.

Wagoner's first reason for picking China? Its fast growing vehicle market. This move is about selling cars, not cleaning up the planet. Doing research to create cleaner fuels in China is a means to an end -- selling more cars.

It's about selling lots of cars in a very populous country and staying globally profitable.

Sunday, October 28, 2007

October Consumer Confidence -- lower than expected

The Reuters/University of Michigan Index of Consumer Sentiment fell further than expected in October, as the persistent housing decline slammed expectations for the economy.

The index fell to 80.9 in October from a reading of 83.4 in September.

Trouble in the housing market is seeping into other sectors as consumers become more guarded with their resources.

Promises, promises -- UAW falls in love again

Promises made the UAW contract with GM a reality. GM promised to build specific vehicles in the future including the Volt in Hamtramck in 2010. GM's promises gave Chrysler workers pause as they considered their own contract, which did not contain any such promises. Chrysler would not, and further claimed it could not, make those sorts of promises. To do so would have been irresponsible, irrational and unrealistic. In the end, the UAW did accept the Chrysler contract.

The International Herald Tribune reminds us that the Volt "is a concept car that cannot be built until the technology is available, and one that the company has not even officially announced it will build."

The piece quotes Professor Walter McManus, an auto industry economist at the University of Michigan:

"The problem," he added, "is the battery technology is still not ready. I would say, when they break ground on a plant to make batteries, two years later the Volt will come out."

For the car to be built starting in 2010, he added, "a factory has to be built soon, and it doesn't look like the batteries are that near production."

Those promises to build the Volt, while well-intentioned and seductive, are premature.

Less than three weeks after ratifying the GM contract, nearly 2000 Michigan workers were laid off -- 767 of them in Hamtramck. Lay offs are a rational response to market conditions. You shouldn't build cars you can't sell. GM is in the business of building and selling cars, not guaranteeing employment. So how could they make promises about future production? After the recent lay offs, those promises seem suspect. How can GM assure future employment or promise to build something it cannot build?

Although the Chrysler agreement made no predictions beyond its four-year term, it may end up a fairer, honest commitment to workers.

Now, on to negotiations have resumed.

Friday, October 26, 2007

Homeland Security and Michigan's New Economy

Press about the 21st Century Jobs Fund tends to focus on biotech, alternative energy and advanced manufacturing, but homeland security and defense is an equally favored and well-funded industry priority of the fund.

While Michigan struggles to make her way to a "new economy," public money, a limited natural resource, is being spooned to companies devoted to homeland security and defense. At the same time, our schools, children, the sick and the aged are getting short shrift. It's a perennial conflict of priorities, prophetic in implication.

What matters now is that Michigan citizens take notice. In Northern Michigan, a company named Sovereign Deed is proposing privatizing civil defense and the disaster relief functions normally handled by FEMA. While you might agree that FEMA has done poorly in the last seven years, that has been the result of the agency being gutted of non-partisan, career professionals. In a sense, we face a contrived and man-made crisis in crisis response and disaster management. Katrina showed us that.

So, as you read about Sovereign Deed setting up shop up North, where you like to spend time away at the cottage, ask yourself: do we really want homeland security contractors to become our growth industry? The spookiest thing about this is that of all the 21st Century Jobs Fund priorities, homeland security and defense is probably the most likely to create immediate commercialization and jobs and profit. Win-win for the lucky communities that get picked by these contractors.

You might argue, "but if we don't seize this amazing commercial opportunity, who will?" Every other state in the country where workers are freaking out over outsourcing of well-paying jobs. Homeland security, like the defense industry, will become essential to the economic viability of every state. In an environment of perpetual, unresolved, diffuse threat, this is inevitable. But we needn't rush into it.

Do you really want Paul Bunyan and Babe the Blue Ox to make way for soldiers of fortune and Hummers?

Let's give higher education a chance. And while we're at it, not forsake the most vulnerable among us. Please.

Wednesday, October 24, 2007

Finding the upbeat in Michigan

A recent anonymous reader asked, "Why are you so bitter?"

I don't feel bitter, mostly just concerned about our state's future and economy and people. Perhaps it is time to remember some good things about Michigan.

Autumn color, vast fresh-water lakes, the U.P., Cornish pasties, Detroit Institute of Arts, fudge, golf, coney dogs, lumber jacks, Tony the Tiger, the Mighty Mac, Iggy Pop, Ted Nugent, Madonna, the Soo Locks, the Real McCoy, bow hunting, Big Boy, blue berries, moose, cars, Governor Milliken, Sleeping Bear Dunes, mastodons, Lake Michigan cabernet sauvignon, Pinconning Cheese, Interlochen Arts Camp, the Tigers, the Dirtbombs, University of Michigan, the Lions, Vernors, the UAW, Michigan State University, the State Fair, tulips, motown, whitefish, Rosie the Riveter, Sojourner Truth, cherries, Sweetest Heart of Mary Catholic Church, Gerber baby food, raw milk, wolverines, Dance for Mother Earth Annual Pow Wow, community supported agriculture, fly fishing, snow, lake freighters, light houses, the Red Arrow Highway, Jiffy Mix, iron, copper, lumber, corn, the Whiting!

Ah, that's better.

Now, don't forget these things -- continuation budget, partisan gridlock, recall campaign, below national average college completion rate, 40% higher incarceration rate than neighbor states, term limits, structural deficit.