[canudigit]

Originally Posted by michigan83

Actually, I think this applies more to the original Sun Belt boom than it does to Michigan. A "bad economy" is all relative. After a decade of the worst economic downturn of any state BY FAR, we are still 13th nationally in GDP per capita. List of U.S. states by GDP - Wikipedia, the free encyclopedia Which says that Michigan, at rock bottom, is still more prosperous than the majority of states.

When people talk about Michigan having a "terrible economy", it is more due to the comparisons to our economy of the past, than an honest look at the economic activity that we have compared to other states. There is a ton of wealth and economic activity in Michigan. But it's a lot less than we once had. And we haven't lost population at a rate that equals our economic decline. Hence the high unemployment and negative press.

Thank you, this is an awesome post. I've been wondering for a very long time now why everyone is so quick to talk about how Michigan's economy is the worst economy in the history of the world, and yet, if you read the other forums here on C-D, even those for the Sunbelt states where everyone is supposedly trying to move, the people are complaining about how awful their economies are and how scarce jobs are. Hmm...how is Michigan doing so much worse, especially in light of the fact that I personally know very few people who are unemployed or even underemployed? I mean, we live in SE Michigan, which is, I guess, supposed to be the poster child for this stupid recession, and yet...everyone is doing okay and going about their lives, buying dispensible goods, taking vacations, and not living in cardboard boxes and selling their blood to buy food. Really. Here in Michigan!

[JGatti]

But with these gas prices hanging around $4 a gallon how long before it starts to hurt us again? The trucks are going to sit at the dealers, people will start staying home and then the same crap could just start all over. I know we have had to cut back to make up for paying so much at the pump. I drive 28 miles each way and my wife is burning through $75 a week between school and work. This crap needs to stop. Don't like to sound negative in a positive thread but I think this is going to start hurting us.

[michigan83]

But with these gas prices hanging around $4 a gallon how long before it starts to hurt us again? The trucks are going to sit at the dealers, people will start staying home and then the same crap could just start all over. I know we have had to cut back to make up for paying so much at the pump. I drive 28 miles each way and my wife is burning through $75 a week between school and work. This crap needs to stop. Don't like to sound negative in a positive thread but I think this is going to start hurting us.

Oh, I'm worried about this too. People don't talk about it as much, but high gas prices were a big factor during the original crash in 2008.

[michmoldman]

Drill baby drill!!

Exxon makes 3 deepwater finds in the Gulf - Business - Oil & energy - msnbc.com

[Indentured Servant]

Things will most certainly get worse for Michigan, in the not too distant future, as the overall economy of the nation starts descending again. Thus, in absolute terms things will get worse, but the difference will be a relative one. In other words, although Michigan will do worse in absolute terms, it will fare better than it previously had relative to other states.

Problems in Japan, new union contracts, greatly improved quality and a viable small care line up and increased “buy American” mentality will keep the American auto industry stable. Indeed, its recognized that the fate of this nation is tied to it maintain its manufacturing might, when previous the belief was that we could transition into a new information economy and let the old economy be done by poor nations.

Also, you will find as time progresses that the Southwest boom is unsustainable because of issues of water. In fact, water is an issue or will be an issue in many of the booming areas of the last 30 years. The Southeast economy was largely artificial. It was benefitting from the shift of jobs and people from the North and Northeast and much of their economy was based upon a building boom of a residential and commercial nature as they areas would "over build" off the speculation of a continued flow of thousands of new residents and relocating businesees.

[magellan]

Originally Posted by Retroit

Let's just hope everyone has learned their lessons:

• Hopefully the automakers have learned that they are in a cyclical industry and that they need to save for rainy days. (Apparently they don't teach this in Harvard Business School!) The fact that GM had to be in bankruptcy for just a year is quite comical and pathetic considering the auto industry has experienced numerous recessions over the past century. (But who studies history nowadays? Guess there is no need to when you are guaranteed to walk away with millions even if you screw up a company. )
• Hopefully the unions have realized that they are not only competing among the Big3, but with foreign automakers as well, including those with plants in the US. You'd think they would have realized this decades ago as well, yet it took their companies' filing for bankruptcy to admit that being paid 95% of wages while being laid off ("Job Bank") was not industry standard in Japan and Korea.
• Hopefully working people realize that layoffs are a part of life in our economy and have made commitments to themselves (and their dependents) that they will put money aside for rainy days instead of splurging with any newfound wealth that this recovery may bring.

We'll see.

Executives at the automakers can't "save for a rainy day." Current laws in the United States require that executive teams at corporations concentrate on fulfilling basically one thing for their boards and shareholders: maximize profits in the short term, period. They can actually be successfully sued if they don't. And that's what is taught at Harvard.

[magellan]

Originally Posted by Sparrow_temp

I think the expression "twice nothing is still nothing" applies. Glad MI is doing a little better but it was way worse to begin with.

As bydand said, the sunbelt economies were built on a house of cards, literally (that's what many of the homes were built of and by cheap undocumented Mexican labor). It was job growth just fueled by people moving around, hardly one that is sustainable. Look up any Arizona or Nevada county and see who the largest employers are, it's basically hospitals and government/schools.

[Sparrow_temp]

It depends on where you are. NM seemed to be relatively unaffected. Housing prices didn't plunge like they did in MI. Unemployment has been well below the national average. You make very good points on a lot of the SW. Places like Phoenix are in big trouble.

The MI economy has been bad for a very long time. It was effected even more than the rest of the country in 2008. If it weren't for the government bailout of the auto industry (except Ford), the major industry in MI would have just died. MI historically had location on its side because of the lakes and the natural resources. This is no longer as important as it was. The climate (something that we can't change) is not really appealing to a lot of the population. The business climate is still worse than most of the country. The best thing MI has going for it at the moment is low housing costs.

There may be a statistical uptick in the MI economy but it has to dig its way out of a very deep hole. If the US economy gets worse, MI's economy will too. What's fundamentally changed since 2008? The country is still in big trouble and so is the state. I'd love to see MI lead the rest of the country out of the Great Recession but I don't know how it can.

Originally Posted by magellan

As bydand said, the sunbelt economies were built on a house of cards, literally (that's what many of the homes were built of and by cheap undocumented Mexican labor). It was job growth just fueled by people moving around, hardly one that is sustainable. Look up any Arizona or Nevada county and see who the largest employers are, it's basically hospitals and government/schools.

[Retroit]

Originally Posted by magellan

Executives at the automakers can't "save for a rainy day." Then how is it possible that a company like Apple has $77 Billion in cash reserves? Current laws .Oh? in the United States require that executive teams at corporations concentrate on fulfilling basically one thing for their boards and shareholders: maximize profits in the short term, period. That may be the philosophy, but it is not the law. Many corporations use their cash reserves to buy back stock shares in order to boost the share price. They can actually be successfully sued if they don't.Oh? I they can't be sued by the shareholders of Motors Liquidation Corporation (the "Old GM") who had their shares deemed worthless by bankruptcy, I doubt that they can be sued by shareholders who see a modest decline in share price. And that's what is taught at Harvard.

And that's why I criticize Harvard. They are out of touch.

[Retroit]

Originally Posted by marktheshark334

I guess that bailout did help the Auto Companies.

It was a loan not a bailout. A bailout would be like the subsidies which the government has been giving to numerous companies all along, but which receive far less criticism.

And companies frequently take out loans, but due to the size of the automakers and due to the unwillingness of the banks to loan money, the only one they could borrow from was the government.

So, or course the loans helped the automakers. Any time you can get money when you are low will help.

The criticism I have is that:

1. The automakers shouldn't have put themselves into a position where they got so low on cash. They should save more and be more aggressive in downsizing.

2. Manufacturing companies and banks should be able to partnership like they do in Japan (kieretsu), so that lines of funding are more accessible.

3. We in the US need to realize that in order for our businesses to compete with foreign companies, we need to compensate for the advantages that foreign companies have over US companies. Either by adopting foreign practices, requiring foreign companies to abide by our laws, and/or by imposing an import tariff.