Tag Archives: michigan

The Battle of Lansing And Everything After

It’s been interesting to see what’s going on in my home state of Michigan.  As a kid, you learned how important the unions were in the state.  Most kids learned of the 1936-7 Sitdown Strike in Flint, Michgan which happens to be my hometown.  It was that event where the United Autoworkers made a name for themselves and where the Detroit automakers had to get used to labor as a partner.  For the next 70 years, the American auto industry and the UAW were partners in building the modern Michigan.

My parents came to Michigan and became autoworkers.  My mother worked at AC and Dad worked at Buick.  Of course they were union members as was every hourly worker in every plant in the United States.  As a kid, I never did understand why every hourly worker were union members whether they liked it or not.  My Mom would say in effect that they benefit from all the hard work the union did, so of course they had to be members and they had to have money taken out of their paychecks for union dues.

The passage of right-to-work legislation in Michigan this week is not going to make a big difference in my home state.  Unions aren’t going away.  Michigan will still have to deal with job losses and all the problems that come with that loss.  Maybe new businesses will choose to plant themselves in the Wolverine State, but they might come for reasons other than right to work.

What did happen this week was more symbolic than anything else.  But symbols are important and they do carry weight.  To have right to work in what is considered the cradle of the American labor movement is big.  Conservatives feel like David taking down Goliath.  Liberals are crying foul over how the idea became law.  But as Walter Russel Mead noted yesterday, this is one more sign of the passing of the “blue social model.”

But the hopes and fear of right to work really don’t make a difference to the economic climate in Michigan.  Why?  Because most of those auto jobs as well others that were covered by unions are going away.  These jobs were low-skilled jobs which because of union prodding, paid pretty well.  But even jobs in manufacturing are become more skilled.  The days when a guy could graduate high school and then end up working at Chevrolet plant are fast dissappearing.

Michigan is not going to rebound unless they have a trained workforce, which means providing more opportunities for people to get college -level education or training in vocation schools.

Cities like Detroit, Flint and Pontiac are not going to saved because of right to work.  They are not going to be destroyed because of right to work, either (these towns were destroyed long before this week).

The Battle of Lansing is a sign that the old order doesn’t work anymore.  But we don’t know what needs to come next.  What we do know is that right to work doesn’t change much.


Can Detroit Be Saved?

While on vacation, I heard the latest bad news to come out of Detroit: the loss of 25 percent of its population from 2000-2010.  The new population according to census figures is 713,777; the lowest figure in a century and before the Big Three made the Motor City the fourth largest city in nation in the middle of the 20th century.

During the vacation, a friend commented on how we are seeing the death of an American city.  I have to admit that such talk bothered me.  Of course, part of the reason it does bother me is because it’s so personal to me.  I’m not from Detroit, but my hometown of Flint is just 70 miles up the road and I have relatives that live in and around Detroit.  So, it’s hard not to take such talk of the death of Detroit as a slight against me and my people.  I know my friend meant no offense, so I’m not mad at him.  Just goes to show that when you hail from Michigan, you tend to feel somewhat embarassed from being from there because of the current state of the economy.

The continued loss of population makes one wonder: can Detroit be saved?  It’s been the question that we Michiganders have been asking for about 30 years or so.  I think Michigan’s largest city does have a future, but I think that the state and the city have to find ways to build a future where cars are not king.

Cars are what made Detroit Detroit.  Just like Pittsburgh was known for steel, Detroit was known for the horseless carriage.  The problem is that the world is changing.  When the Big Three were king, they ruled.  Future competitors like Toyota weren’t a factor since most of Japan was bombed into the last century.  But over time, Japan rebuilt and made affordable cars and later cars that were just  as good as the Big Three if not better.

Detroit has never been able to really respond to changing tastes and the rise of competitors in Japan and later Korea.  The jury is still out as to whether General Motors, Ford and Chrysler have learned their lesson.  Ford, I think is getting the idea, but the other two are still doubtful.

For Detroit to rebound, it has to give up it’s car addiction.  Autos will still have some role in Southeastern Michigan, but let’s face it: the days when the Big Three employed tens of thousands of Michiganders is long gone.  The Economist links to a Bloomberg article that Detroit is seeing a big growth in tech jobs, but there’s just one problem:

Auto industry executives are trying to make Silicon Valley engineers feel at home in Detroit. With a burgeoning number of technology job openings to fill, they’re scouring Internet companies for workers, wining and dining applicants, and seeking promising students at schools such as Stanford University…

Expertise in cloud computing, mobile software applications and energy management are in demand in the Motor City as automakers replace car stereos with Internet radio and gasoline engines with motors powered by lithium-ion batteries. Technology job postings in the Detroit area doubled last year, making it the fastest-expanding region in the country, according to Dice Holdings Inc. (DHX), a job-listing website.

Do you see the problem here? Yes, there are tech jobs to be had in Detroit, but they are coming from the auto industry. I don’t have a problem with these jobs per se, after all, as cars get more technical the auto industry has to become more high tech. The problem here is that this seems to be the same song with a different verse. Michigan is again hitching its star to an industry that could bring some great highs and some really low lows.

Here’s what the Economist has to say about these tech jobs:

I think it’s a little disconcerting that so much of the hiring seems to be driven by carmakers. As a kernel around which to build an initial concentration of talent, that’s fine, but ultimately Detroit’s success will hinge on whether it becomes a hub for new firm growth. There’s just a limit to the extent to which the carmakers can scale up tech employment. For the city to rebound as a tech centre, skilled workers need to be able to strike out on their own and start new enterprises that then employ many more people.

This is one place where Detroit is at a significant disadvantage thanks to the condition of its broader economy. A tech worker in Silicon Valley who tries to start a new firm and fails will probably be able to find new tech employment fairly easily. A tech worker in Austin who starts a new firm and fails may not immediately find another tech job, but can almost certainly find some work. This safety net of employment reduces the risk of entrepreneurship and encourages new firm formation. In Detroit, could a worker who sets out on his own and fails expect to be re-employed within a few months?

Detroit has a lot of things that could make it a Silicon Valley of the north, but as the blog notes there are also a lot of knocks against it.

For Detroit to survive, it has to create a sustainable base of jobs. That’s why southern cities like Raleigh and Austin are doing so well. The problem is that Detroit has never created a base of sustainable jobs; it never had to. After the wrenching changes to the auto industry that started in the 70s, Detroit never really seriously tried to move beyond cars. In Detroit and in most of Southeastern Michigan, there has always been hope that something would come and make things like they were circa 1962. We have always hoped the auto industry would come bouncing back and things would be okay. The articles I’ve linked to shows we still cling to that hope.

What Detroit should be doing is trying to bring the Dells and Apples to the area in ways that Raleigh and Austin did. It should also help foster new industries to develop that are not so tied to the Big Three. The first step to rebuilding the city ( to make it sustainable, NOT make it what it once was) is to admit we have a problem with an addiction to autos. Once we can be free of that habit then maybe Detroit and the rest of Michigan can grow.

So is anyone up for an intervention?

Photo by Shakil Mustafa.

Can We Calm Down About Michigan?

I’ve really become a bit ticked off about how some folks are hyping the Emergency Financial Manager bill passed by the Michigan House and Senate and awaiting signature by Republican Govenor Rick Snyder.  It’s not that I’m for Snyder come hell or high water, but because too much of the criticism is mere paranoia and hysteria.  Many on the Left, who rightly get angry when conservatives believe whatever Rush Limbaugh or Glen Beck say have turned around and just taken what Rachel Maddow said about Snyder and the EFM law as gospel without really looking into it.

Stephen Henderson of the Detroit Free Press has a more nuanced view of the bill.  It isn’t perfect and he outlines the problems, but he also shares why the legislation is needed.  He does all of this without making it sound like Michigan is going to become the Fourth Riech. Henderson notes what’s the problem with the current law:

For years, local governments and school districts have been able to walk right up to the brink of financial disaster without any intervention from the state. So when state officials do rush in, they face horrific conditions with too few options for balancing the books.

That’s why cities such as Pontiac have made so little progress getting costs under control even with emergency financial management. It’s why Robert Bobb can’t do what the accountant in him knows needs to be done to fix Detroit Public Schools. And it’s why officials in Hamtramck were just a few months ago begging the state to let the city go bankrupt so drastic steps could be taken.

The state’s current rubric for dealing with financial emergencies is weak to the point of flaccidity. Legislators are right to firm up the consequences of inaction.

He also shares what he thinks is wrong with the proposed legislation:

That’s not to say the current proposal is perfect. Wiping out elected officials, as both the House and Senate versions call for, is decidedly anti-democracy. I don’t see why people should lose their democratic voice because of the decisions their elected representatives make. And I’m not sure about provisions in the bills that would allow emergency mangers to privatize government services. That kind of decision is also probably best left to a democratic process.

Now I think this is a worthwhile criticism.  But instead of saying there are problems with an otherwise good bill, people against the law have made it sound Michigan has lost its democracy which is hardly the case.

I think people need to take a pill and calm down.  People need to stop with the fearmongering and offer solutions to making Michigan run better.

Rick Snyder: One Tough Fascist?

At least, that’s what one blogger from Lansing believes:

As much as I hoped it wouldn’t be the case last November. It appears that Governor Rick Snyder is nothing more than a velvet-gloved austerity whore hell bent on engineering an IMF-style economic dismantling of Michigan’s government and economy. It’s time for true liberals and conservatives to wake up and unite against the systematic destruction of Michigan’s economy, Constitution and rule of law.

Rick Snyder is not a Republican. He is not a nerd. . . . He is a fascist. And if his plan is implemented, the merging of corporate and state power – the essence of Mussolini-style fascism – will be complete. And no Michigander will be immune from the onslaught.

Is Democracy At an End in Michigan?

Michigan is on the verge of passing legislation that would grant some new powers to Emergency Financial Managers or EFMs.  These managers are basically people appointed by the state when a state, city or school district finds itself in dire straights.  From what I’ve been ready among some on the Left, including E.D. Kain and Rick Ungar, this is the end of democracy as we know it in the Wolverine State.

Since I’m a Michigan native and my hometown of Flint fell under state control in 2002, I decided to read up on what’s going on.  Jack Lessenberry of Michigan Radio lays out what’s going on:

Nobody in Lansing was neutral yesterday when the Michigan senate completed passage of new, tougher Emergency Financial Manager legislation on a straight, party line vote.

State Senator Phil Pavlov said this is needed to maintain “vital services, such as public safety and education,” when a city or a school district is in desperate financial straits.

This reform, he said, is necessary to allow steps to be taken “to protect public interests and the public’s money and strengthen local control and accountability.” His fellow Republicans all agreed.

But if you talked to any of the Democrats, they sounded like this was the equivalent of Mussolini seizing power.  “An unfair and unjustified power grab,“ Senate Minority Leader Gretchen Whitmer called it. One of her colleagues said it went way too far, “and was going to damage our communities and our schools.”

It’s also frustratingly clear that in the past, some emergency  managers in places like Pontiac and Hamtramck could have used  more authority. Robert Bobb needed to be able to tackle academic reform in the Detroit district; the courts said he couldn’t.

Now, his successor will have that power. Democrats are mainly afraid of provisions in the bill that would allow emergency managers to void contracts and ignore collective bargaining agreements if necessary. EFMs can even dissolve a municipal government.

Democrats rightly fear this could be the death knell for public employee unions in such cases. To be sure, the majority Republicans seemed uninterested in even attempting to compromise or win over Democrats. However, here’s something we might ask the indignant minority party: Where have you been for the last several years?

What’s clear is that a lot more school districts and municipalities are likely to have to endure emergency financial managers, or EFMs for short.

This has been clear to everyone for some time, and it has also been clear that the old law was inadequate. Did the Democrats propose changes last year, when they controlled the governorship and the state house? Did they suggest conducting a review of Detroit’s troubled finances?

They did not, clearly for political reasons. They did nothing, any more than they attempted to address the state’s deep-seated financial problems. Now, the balance of power has shifted.

Crain’s Detroit has a good overview of the law.  There is a current law on the books that has been used in the past.  As I said earlier, it was used on City of Flint in 2002.  The Crain’s article sums it up:

Here’s how the existing law works: A review of a city or school district’s finances is triggered when one of several events happens, like payless paydays or a failure to meet pension obligations. The state treasurer puts a review panel in place to evaluate the local government’s fiscal health, and if there’s a financial emergency, an emergency manager is appointed.

This is what happened in Flint.  A New York Times article from 2002 explains that the state came in and in effect, stripped elected officials of their power:

Even in a city used to hard knocks, this has been a bruising year.

In March, Mayor Woodrow Stanley was recalled by voters frustrated with the city’s deteriorating finances, and racial tensions simmered as the Rev. Al Sharpton came to rally support for the mayor, who is black.

In May, unemployment rose to 8.3 percent, far higher than even beleaguered Detroit to the southeast.

Since then, Flint’s municipal debt has climbed to nearly $40 million, alarming state officials, who began a review of the city’s finances in the spring. Gov. John Engler, a Republican, said the city had no credible plan to turn itself around. Darnell Earley, the city administrator who became acting mayor when Mr. Stanley was recalled, went so far as cutting public ambulance service to try to bring the city’s finances under control.

The denouement came on Monday when the state took control of the city’s government, stripping elected officials of much of their power. Flint, a city of 125,000, is the largest municipality that has ever been run by the state.

So, what does the new law do?  Back to the Crain’s article:

Amendments to state law under discussion include expanding the list of events that can trigger the state review that leads to installation of an emergency manager, changing the powers of local elected officials during the emergency financial manager’s tenure, giving an emergency manager the power to modify or terminate labor contracts, allowing an emergency manager to consolidate or eliminate departments and allowing a current or recent elected official to serve as emergency manager.• Under the existing law, an emergency manager can renegotiate union contracts but not break them. The amendment would place some restrictions on the emergency manager’s ability to break contracts, namely, to prove it’s necessary, based on the financial emergency and the good of the public. Contract modifications would be temporary.

The article goes on to say that some policy experts wonder if the proposed law could run afoul of the state constitution, though the State Treasurer says that it can be backed up with a competing provision.

This blog post does a good job of looking at the current law as well as the new law.  It does have its own spin, but it’s still informative.

My own take on this is that from what I’ve read, the proposed new law could do things like break union agreements or even dissolve government entities, but that it doesn’t say it would do that. I also think that what is lost in some of the talk of power grab is that some Michigan cities have been prennial problems in the state.  Flint is in danger of going back to state control only ten years after going through it again.  Andrew Heller, a columnist for the Flint Journal notes that my hometown is acting like the cartoon character Wimpy from Popeye, saying it would pay someday for some money today:

Imagine you have a brother who is a, well, we won’t call him a deadbeat because he’s family, but he does have a nasty habit of spending money he doesn’t have.

In fact, a few years ago – much to everyone’s embarrassment – he ran up so many bills around town that the sheriff threw him in the clink and had a judge appoint someone to run his finances for him.

The idea was, “If we show him how it’s done, he’ll become smarter about how he spends his money and then he will no longer run up bills that he can’t pay.”

Except it didn’t work. The court-appointed money manager paid off your brother’s staggering bills and got him back on the financial straight and narrow. In fact, the turnaround in his finances was remarkable.

“Surely, he has learned some valuable lessons and will be able to run his own finances from here on out in a responsible, adult fashion,” you thought.

But the second the money manager left town, your brother went right back to his spendthrift ways.

“I can’t help it,” he cried. “I’ve always spent money like it was going out of style and I guess I can’t stop.”

So he didn’t even try. He kept right on spending money hand over fist on things he didn’t need and luxuries he couldn’t afford, and before long he had IOUs floating all over town.

That was when he came to you.

“Brother,” he said. “I’ve proven once again that I have all of the self-discipline and impulse control of a sailor on shore leave. But I’ve changed this time, I swear it. And if you can see your way clear to give me permission to borrow $20 million, I promise I will pay the money back later on with interest.”

Would you trust him?

Now, I totally understand what cities like Flint have gone through in the last 30 years or so.  But I also think that after a while a city that has been on hard times has to get itself cleaned up- it can’t just think that it can go to Lansing anytime cash runs short.

It’s hard to see my home state struggle like this.  But I also know that Michigan has been living in a state of denial for decades that somehow, someway the good ol’ days will come back.  There are people in my homestate who still think that King Auto will come back and the state will be rolling in the dough once more.  We don’t want to think that hard decisions have to be made, and there has to be a willingness to move forward towards new industries and ideas.

Maybe, the EFM bill goes to far, I don’t know.  But then, I’d like to think that a city that’s had to go through the embarassment of having a state-appointed manager try to get you back under control would be enough to scare said city straight.

I’d like to see what those who are talking about the end of democracy in Michigan would do when there are cities that are financial basketcases.

An Example of “Make Everybody Hurt?”

Nick Goebel is impressed with Michigan Governor Rick Snyder’s brand of fiscal discipline:

Governor Snyder’s budget that he unveiled last week is a truly unique document in so many ways.  For one, it is an apolitical document that cuts from almost every constituency.  Unlike Republican Governor Walker in Wisconsin, Snyder did not just cut from political constituencies that are loyal to Democrats; he also took on loyal Republican constituencies.  For example, senior citizens could see their pensions taxed if Snyder’s budget is passed.  It is obvious that the Governor’s objective was not to score political points or protect political allies.  As Lt. Governor Brian Calley said, “Whenever people would get weak in the knees and offer a political answer about why not to do something,” Snyder would come back with, “What’s the right thing to do?”

This makes me wonder if Synder if following along the lines of what David Brooks said in an oped last week regarding dealing with state and federal budget issues: “Make Everybody Hurt.”  Brooks believes that budget cuts can only make sense if everyone’s sacred cow gets gored.  His belief is that Wisconsin Governor Scott Walker’s approach is too partisan: only attacking programs favored by Democrats or programs that don’t have a constituency to fight back.  His fellow Republican Synder, is willing to take on people who do vote, like his plan to tax retirees benefits in an effort to balance the budget.

I happened to be back in Michigan when Gov. Synder gave his State of the State address in January.  I thought it has some great ideas and the budget he came out with was fair-minded in my view. It will be interesting to see what approach will benefit the GOP over the long run: Walker’s go for the jugular tactic or Synder’s quiet diplomacy. Time will tell.

Rick Synder:The Definative Centrist

Via Solomon Kleinsmith, the blog the Pragmatic Center focuses on Michigan’s Republican governor-elect, Rick Snyder, aka the “Tough Nerd.” Nicholas Goebel is a fellow Michigander and explains how the former computer exec-turned politician was able to win; by shunning the Tea Party and encouraging independents and Democrats to support him:

While he may have ran as a Republican, he steered clear of being defined by labels.  Instead of pandering to the Tea Party crowd as his primary opponents did, Snyder utilized Michigan’s open primary system to campaign to the broadest coalition of voters.  As his opponents fought for the votes of ideologue conservatives, Snyder won the primary with help from independents and some Democrats. 

But running a more inclusive campaign isn’t enough for a centrist.  Politicians also have to be about ideas that have appeal.  In that area, Synder was successful with his plan to “reinvent Michigan.” Goebel explains:

His campaign from day one was never defined by partisanship or ideology.  He didn’t talk about social issues that tend to divide voters rather than unite.  He focused on the solutions rather than the problems and causes.  And he campaigned on an inclusive forward looking vision to “reinvent Michigan.”  In his victory speech on Tuesday Snyder said “It is time to drop the labels.  All of us carry far too many labels, of party, of ideology, of geography.  So many different labels.  To make this work there is only one label that matters.  That label is Michigander.  It is time to come together as Michiganders.  To stand up together to say here’s a vision for the future, here’s a plan, here’s an attitude of action in a forward looking and inclusive fashion.” 

And his vision is uniquely centrist.  While I may have suggested that centrist candidates campaign on offering “smart government,” Snyder has been using a different term, “customer service government.”  In his victory speech Snyder said “It is time for a new form of government.  And what does that government look like?  It’s simple, it’s customer service government.  It’s to treat you the citizen as the customer.  We need to look at life through your eyes and ask two simple questions.  How do we help you to succeed?  And how do we get out of the way?  And when we ask you for a dollar of revenue, instead of taking your money and spending your money, we show you value for your money, that we’re making a difference in real people’s lives.  That’s the government you deserve and that’s the government you’re going to get.” 

This is exactly the type of government we centrists have been asking for, government that runs like a business, government that cuts where it can and invests where we need, and government that is lean, effective and efficient.  As Snyder said “the role of government is not to create jobs but to create an environment in which jobs can flourish.”  That takes smart, activists policies.    It takes a post partisan, business-like pragmatism that is focused on results and doesn’t matter which party supports them or opposes them.  Only a centrist can do that.  And luckily for Michigan we elected one for Governor. 

Synder was in someways the exact opposite of another person that had donned the centrist label, Florida governor Charlie Crist.  But Crist was incredibly opportunitistic, saying and doing whatever was pleasing to get elected.  He was a lot about style, but little about substance.

Being a centrist doesn’t mean that one can’t have ideas.  In fact, you have to have some guiding philosophy, but not be constricted by it.

If Synder is successful in helping turn my home state around, he might be a blueprint for centrist candidates in the future.