Thursday, July 24, 2008

Michigan's social safety net still full of holes

Our social safety net is porous. It’s a net after all, not a helmet or steel-toed boots or safety glasses. Nets have holes. Stuff slips through. People slip through. Families. Children.

This week, Michigan legislators increased state cash assistance to poor families via the Family Independence Program by $1 per month per person – a cool $12 per year. According to the Michigan League for Human Services (MLHS) this is the first across the board increase in the monthly grant in 18 years. This increase isn't going to strengthen the safety net.

“We think it’s a positive symbol that needy families receiving cash assistance are finally getting recognized in the budget, but you have to keep it in perspective because the buying power of the grant has eroded steadily over the years,’’ said Sharon Parks, president and CEO of the League, in a press release.

While it may be a positive symbol, the $1 increase is also a shameful embarrassment. Next year, a family of three will receive $36 more per year in their FIP grant. If you’ve gassed your car lately, you know $36 doesn’t buy a tankful. The buying power of the dollar continues to erode. Good thing the Family Independence Program is intended to cover rent. So how much do families that qualify actually receive?

Prior to the $1 increase, a single parent with two children received $489 a month. Unfortunately, the average rent for a two-bedroom apartment in Michigan is $627. To make ends meet recipients can also seek food stamps or federal housing subsidies. Recipients can even work. But if they earn a bit more than $300, they lose their FIP. The rules of the system push them toward independence through the holes in the safety net.

“There are plenty of families for whom this is their main income,” said Judy Putnam, communications coordinator for the MLHS. In the first quarter of 2008, 58 percent of families receiving FIP had no earned income. Children in those families do not benefit from cash income beyond the FIP grant.

The FIP assistance amounts to just 35 percent of the poverty level. In Michigan, the 2007 poverty level for a single parent with two children was $16,705.

In June 75,848 families received cash assistance from the Family Independence Program. This included about 150,000 children. Imagine the combined populations of St. Claire Shores and Farmington Hills as poor hungry children. Anybody got an extra dollar?

Water cooler ticker -- It's the economy

Ford Has $8.7 Billion Loss, Shifts Away From Trucks (Bloomberg)Analysts expect Ford's change in direction -- away from trucks to fuel efficient cars -- will be costly, with more losses ahead.

Dow Chemical reports decline in 2Q profit (Associated Press)
"Dow Chemical Co. said Thursday that despite record sales and two double-digit price increases unveiled in the second quarter, its profit for the period fell 27 percent, in large part because of sharply higher costs for energy and raw materials."

Sales of U.S. Existing Homes Fell to 10-Year Low (Bloomberg)
"Sales of previously owned U.S. homes fell in June to the lowest level in a decade, signaling tumbling real-estate prices and consumer confidence are hurting demand.

Resales dropped 2.6 percent to a lower than forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June last year. "

National City has $1.76 bln loss on loan write-offs (UK Guardian)The Cleveland-based lender posted its fourth straight quarterly loss "hurt by soaring mortgage and real estate construction loan losses and a write-down for acquisitions."

US weekly jobless claims rise 34,000 to 406,000
(Forbes)"The number of individuals filing new claims for unemployment insurance rose to its highest level in nearly four months, while the number of individuals continuing to file claims for unemployment fell slightly in the latest survey week, the Labor Department said today."

New layoff filings jump as companies retrench (Associated Press)"The number of newly laid off people filing claims for unemployment benefits bolted past 400,000 last week as companies trimmed their work forces to cope with a slowing economy and fallout from a collapsed housing market."

Wednesday, July 23, 2008

Creative Cities Summit 2.0 coming to Detroit

Tired of Michigan being the poster child for economic crisis and Detroit the archetype for lost cause? Ready to imagine healthy economic development and make it happen? Want a brainstorm to clean out yesterday's ways from your mind? Eager to meet like-minded people from around the world who've met tough economic development challenges with creativity? Then get registered for the Creative Cities Summit 2.0 October 12-15 at the Detroit Renaissance Center.

Featuring a power hitter panel discussion with Richard Florida, author of Rise of the Creative Class, John Howkins, author of The Creative Economy, and Charles Landry, author of The Creative City, the conference will examine the Midwest as a megaregion, transportation innovation, marketing the creative city, the city's role in attracting and retaining talent and more.

Speakers include:

John Austin, Washington, D.C.-based Brookings Institution; and Richard Farnsworth, former Chicago Tribune reporter and author of Caught in the Middle: America's Heartland in the Age of Globalism.

Doug Farr, a Chicago-based architect and planner. The author of Sustainable Urbanism: Urban Design With Nature, Farr also will conduct an afternoon workshop on applying LEED (Leadership in Energy and Environmental Design), the green building rating system, to neighborhood design.

Charles Landry, founder of the U.K.-based Comedia in 1978 and a leading authority on cultural development and how culture changes its development. He is credited with coining the term Creative Cities.

Majora Carter, founder of the non-profit environmental justice solutions corporation, Sustainable South Bronx (SSBx), is a MacArthur "genius," and one of Essence Magazine's 25 most influential African-Americans for 2007.

Monday, July 21, 2008

Obama and McCain to stump at Saddleback mega-church

It's official. Obama and McCain will make a joint campaign appearance at Saddleback Church in California on August 16. Pastor Rick Warren said in a press release, "We're honored that the candidates chose The Saddleback Civil Forum on Leadership and Compassion for their first joint appearance, an unprecedented opportunity for America to hear both men back-to-back on the same platform."

According to Warren, each candidate will converse with him for one hour and all media are invited.

Both candidates recorded video messages for attendees at Saddleback's annual Global Summit on AIDS and The Church last November. Located in Orange County, Saddleback has about 22,000 members.

Thursday, July 17, 2008

Thursday Economic Roundup--hunger increasing across Michigan

As GM frantically eliminates jobs and costs and MEDC judiciously awards tax breaks to attract jobs, Michigan's unemployment remains top in the nation at 8.5 percent in June. High unemployment and economic upheaval continue to affect children and families across the state and food pantries struggle to keep up with demand.

Families do without when foodbanks run dry in Shiawassee County.The Argus Press reported Saturday that "At least 400 families in Shiawassee County are going to be hungry this week." If you're Phil Gramm, complaining about hunger is just so much whining. But if you are a poor, homeless, hungry child in Michigan the pain is real.

Bay City Schools to start feeding all kids breakfast. Bay City Schools join nine other districts in Michigan to test a pilot program, the federal Universal School Breakfast program, which will serve all students a free breakfast, regardless of whether they qualify for free or reduced meals.

Ann Arbor's Motor Meals is facing a financial squeeze that could get tighter, according to executive director Elizabeth Adams. Falling donations, increasing need and soaring food and fuel costs threaten this and other hunger organizations' operating budgets.

In Isabella County food banks are running out of stock. Irene Little, emergency programs director at the Central Michigan Chapter of the Red Cross, says there is a steep increase of new people seeking assistance. And she predicts "there are a lot of rough times coming."

Sunday, July 13, 2008

Phil Gramm, fear and your financial future

Now that we're largely inured to the disaster that is "the war in Iraq," and now that we no longer expect a terrorist attack any minute, there is a new bogey man in town. Be afraid, be very afraid of total economic collapse and complete loss of the pampered American way of life as we know it. Be afraid that you may lose your job and house at any moment. Be afraid that you will have no retirement and will not be able to put your kids through college. Fear is the theme. Fear is the meme.

Check out some headlines from this week:
"Worst fears ease, for now, on mortgage giants"
"Stocks, dollars slide on latests credit crisis fear"
"Fear is driving Wall Street"
"So much for optimism"
"Feds fear Fannie, Freddie meltdown"
"Better than feared economic data still pretty bad"

As long as you're scared, maybe in this election year you won't notice who's behind the mess we're in. According to journalist David Corn, Phil Gramm, one of John McCain's closest advisers, bears some responsibility. Corn contends that the roots of today's problems come from " a sly backroom legislative maneuver mounted by Phil Gramm, who was Republican chairman of the Senate Banking Committee in the '90s." According to Corn, Gram helped deregulate financial speculation in the form of "swaps" with language quietly slipped into the Commodity Futures Modernization Act. Swaps are tools that let banks hedge their bets by insuring loss. And as a rolling loan gathers no loss, swaps that insure against loss need to keep rolling too. Trouble comes when the music stops in the game of musical debt. Whoever is left holding the massive amounts of bad debt loses.

But this completely overlooks Gramm's magnum opus, the Gramm-Leach-Bliley Act from 1999. This law repealed the depression-era Glass-Steagall Act, which prohibited a bank from offering investment, commercial banking, and insurance services. This is the real culprit behind our financial mess. Gramm's law freed up Citibank to merge with Traveler's and become Citigroup. Gramm's modernization of financial services actually facilitated greed and speculation run amok.

Want to be afraid? Imagine this guy as treasury secretary.

The markets will correct. Long-term investors with diversified portfolios will be fine. Don't be distracted by the fear meme. It is there to keep you from noticing who's on first during this presidential campaign.

Wednesday, July 9, 2008

Special ballot measures to get out the vote (UPDATE and Correction)

Michigan's November ballot will most certainly bring out voters and provide drama and entertainment at a time voters desperately need it. Considered a critical swing state, a high Michigan turnout will most certainly favor Obama. Three titillating ballot measures are sure to get voters to the polls: government overhaul, medical marijuana and easing restrictions on embryonic stem cell research.

Michiganders frustrated with their legislators might have a chance to "say it" at the ballot box. Reform Michigan Government Now, advocating a smaller Michigan judiciary and sweeping salary cuts for elected officials, turned in nearly half a million signatures yesterday to get a Constitutional amendment on November's ballot. Saul Anuzis, chair of Michigan's GOP, questions the validity of the measure because Democratic strategists seem to be behind it.

The medical marijuana question may encourage young voters to take action. The measure does not say how patients would obtain marijuana and the state would not provide or regulate it. Sounds like a business opportunity for enterprising young college grads unable to find other work. (According to the Michigan Coalition for Compassionate Care, the state would regulate the substance to the extent that qualified persons could cultivate "12 marihuana plants kept in an enclosed, locked facility.") You can read the proposed measure here.

The stem cell measure will probably mobilize folks on all sides of that issue -- from alzheimer's care providers to the right-to-life crowd. Obama and McCain both support the measure, but right-to-lifers claim the language of the measure would lead to human cloning. Sigh.

And if those measures weren't enough to stimulate interest, voters in the 9th district will have an independent option in November -- Jack Kevorkian will be on the ballot in the Peters/Knollenberg contest. And why not? He spent eight years in prison for second-degree murder,was released June 1 last year and remains on parole until June 1, 2009. Heck, he's had a productive year managing to jump start a congressional bid. Where does he stand on these issues?

Tuesday, July 8, 2008

Looking for a silver lining to natural disasters?

"When something is destroyed you don't necessarily rebuild the same thing that you had. You might use updated technology, you might do things more efficiently. It bumps you up," said Mark Skidmore, an economics professor at Michigan State University. "Disasters help people think about things differently." (International Herald Tribune, "Do disasters stimulate economic growth?")

Michigan stats in the news

Some curious stats and facts from recent news reports.

Michigan is a top exporter to Iran, according to an Associated Press analysis of data from the last seven years. Curiously, during the Bush years, U.S. exports to Iran have increased more than tenfold, in spite of all the angry rhetoric about nuclear programs.

The Bay City Times reports that heroin trafficking is on the rise in mid-Michigan.

Michigan drivers buckled up at record rates in 2007 -- over 93 percent -- making it a top ten state for seatbelt use. (Chicago Tribune)

Isabella County had the highest increase in residents seeking food assistance in the first quarter of 2008 -- 23.6 percent over the same period last year. Sharon Parks, president of the Michigan League of Human Services says the trend will continue statewide, as people's unemployment benefits end they exhaust savings. According to Parks, "The economy is in a distressing state."

Michigan's richest man says "I'm working for myself. The auto companies are working for the UAW and it doesn't work." According to the Chicago Tribune, Bill Davidson, owner of Auburn Hills-based Guardian Industries, is Michigan's richest man. His net worth of about $4.5 billion makes him the 68th richest person in the U.S.