Guest Voz "Da Tiger" Explains True Root Causes to Michigan's/Detroit/s Economic Problems

Guest Voz: Michigan's "Da Tiger"

Back in the day, a friend of mine told me to never play the blame game. When you are blaming someone, it is like you are pointing at them. But while your index finger is pointing at them, your other fingers are pointing back to you. Quite often, there are many more reasons why something turned out the way it did. So to blame minorities for the problems of Detroit, you CAN make a list just like George Will did. But, on the other hand, there are many other reasons that he did not mention.
For example, for the past 39 years, the State of Michigan has been granting property tax abatements to all industrial manufacturers who promised to create some jobs and make some token equipment purchase or build additional buildings. In most cases, only a small percentage of the jobs were created, much of the equipment was rendered obsolete, and the companies often moved out after the abatement period expired, and in many cases, the company would have made the improvements anyway without the tax abatement. Meanwhile, cities such as Detroit bore the brunt of the loss in property tax revenue.
From 1993 to 2002, Michigan was under the control of Governor John Engler. And just to show you where his true allegiance laid, Engler was president and CEO of the National Association of Manufacturers from 2004 to 2011. When Engler left the governor’s office, he raided the rainy day fund of ALL of its money, just so that it appeared that Michigan was solvent when he left. This left a hole so big in the Michigan economy, that Michigan is still reeling from its effects today.
Beyond this, there are many macroeconomics effects of not diversifying Michigan’s economy. With all of its eggs in one basket, that is, with Michigan relying heavily on the auto industry, when that industry collapsed, all of the Detroit region suffered. And when the nation was going through a Great Recession because of the housing bubble, Detroit was going through a Great Depression, which meant that Detroit’s property tax revenues plummeted.
I could go on, and I wish that someone with a handle on the statistics would bring them up to the national discussion to tell George Will to stop blaming minorities.

Rand Paul Doesn't Understand Bankruptcy and says Obama Will Bail Out Detroit ‘Over My Dead Body’

Sen. Rand Paul (R-KY) DOES NOT Understand the Impacts of Bankruptcy and said he will use every resource he has at his disposal to stop President Barack Obama from bailing out newly-bankrupt Detroit because he believes the city can and must save itself and learn from its fiscal mistakes.
“I basically say he [Obama] is bailing them out over my dead body because we don’t have any money in Washington.”

Detroit Bankruptcy: What will Happen Next and Why I'm Worried

Now that Bankruptcy has been declared, Detroit can expect to face what other cities that have declared bankruptcy have experienced.

With bankruptcy, Detroit still has the obligation to attempt to get its fiscal house in order. They still have to balance their budget. They still have to settle the claims of their creditors/claimants. They still have to pay their legal bills. They have to deal with their “Unfunded Liabilities.” Read this to mean Pensions of City Workers.

Expect that Taxes will be raised, not only in Detroit, but across the State, to fund this Bankruptcy.

Bankruptcy protection will bring all parties to the table. This includes Vendors, Claimants, Bankers, City Contractors and Employee Organizations/Unions – for both active City Workers and City Retirees. Hearings will be held presided by an independent third party – a Bankruptcy Judge.  

These groups come to agreement on actions to be taken. Most often, this means:

1.    Determining amounts to be paid to creditors/vendors/bankers

2.    Cutting Pensions

3.    Cutting Services, Layoffs

Bankruptcy results in cutting services. The first thing to go is City Services, Waste Management, shutting down of Maintenance, then the closing of Police and Fire Stations and Shutting down Schools. With these closures, expect massive layoffs for City Workers and Contractors. Paychecks and benefits will be cut. Additionally expect that Retiree Pensions will be Cut/Vastly Reduced.
Roads do not get paved and deteriorate. The city’s capital equipment deteriorates, vehicles break down and are not replaced.

Today, on Meet the Press, Michigan’s Republican Governor, Rick Snyder confirmed all of these next steps. He also said there are 20,000 retirees dependent on Pensions. A portion of their Pensions are unfunded. This is the portion that will be in jeopardy. That is why it is important their representatives are at the Bankruptcy Table.
Snyder said they will look for immediate “Tangible” areas to improve. The first on his list “Blight Removal.”

Following Governor Snyder’s interview, former Governor Jennifer Granholm was interviewed. She did not agree with Snyder. She said what Detroit needs is Jobs. There needs to be a local and National strategy to revive Manufacturing jobs in Detroit and in America. We need Good Middle Class Jobs HERE.
The interviewer asked them both – WHY did Detroit go Bankrupt? Snyder was quick to blame the previous 50 years of (Democratic) Mayors and other State Politicians.
They both said the “Culture of Cronyism” was a factor. Granholm said we bailed out Wall Street and Banks, but we failed to invest in keeping Manufacturing jobs in America, in the urban areas. We have a collapse of the Middle Class. The rich were not impacted. The rich are getting richer and the middle class is becoming poorer. There is a Class Divide and a Race Divide.
As I listened to their interviews, I couldn’t help but think about Ed’s words about Detroit. His first-hand view of the Detroit neighborhood provided the same feedback as I heard on Meet the Press.

1.    Jobs were Gone

2.    Neighborhoods were Decimated

3.    Cronyism was Rampant

4.    Local Business and Local Looters have NO PRIDE in the City

In studying Snyder’s “Blight Removal” strategy, it turns out, this strategy has been in place for a few months now. There is a non-profit group called “Detroit Blight Authority” headed by Bill Pulty IV of Pulte Homes that is clearing areas of the city. This project is supported by Mayor Dave Bing and Governor Snyder. Snyder said this was "bi-partisan" probably because Bing is a Democrat, but I worry about the possible continued cronyism.

I am worried about Detroit.

With this bankruptcy, there will be massive layoffs, the end to the pensions of desperate seniors, more businesses closing, massive foreclosures, more blight across the city and Governor Snyder’s BIG PLAN is “Blight Removal.” In a way, this program reminds me of what ultimately happened to New Orleans after Katrina.

Detroit In Bankruptcy! Root Causes!

I retired from AT&T after 40 years. Afterwards, I  became a retirement Consultant. I speak to my clients every day about their retirement investments. This week, I spoke to someone about Detroit.

Ed and I spoke about Detroit's bankruptcy. He said he visited a friend in Detroit and now he totally understands why Detroit is bankrupt and he doesn't think there is any chance for Detroit's recovery. Ed is a very successful businessman from Chicago and has substantial wealth. 

Ed visited one of his former colleagues (and friend) from Detroit who also has substantial savings. His friend had previously lived in Detroit and being nostalgic, decided to purchase a home that had once been in a wealthy neighborhood. He purchased it for less than half price. His friend thought he had a great deal in the purchase of his new Detroit home. He purchased it for $200K. Two years earlier, it was listed for $500K. The area had been a wealthy, upper middle class neighborhood. The houses were statuesque.

When Ed visited, he was shocked. He recognized that all the homes in the previously upscale neighborhood were built with quality. They had been large, stately mansions. However, two thirds of the homes were vacant. Many of these vacant homes were ravaged. They were once stately, but now, they were raided. Their copper pipes and contents of the home were vandalized. As new investors attempting to rebuild, their homes were raided on a nightly basis. Ed's friend said he was also vandalized and was forced to hire security to watch his home at night as it was being rebuilt. Ed's friend was spending twice the home's worth just to get it back in shape.

Ed said he thought there was NO HOPE for his friend's success in rebuilding his home. No One could rebuild under these conditions. Ed knew that there were several investors attempting to rebuild but they didn't have a chance. They were doomed to bankruptcy. Detroit was doomed to disaster.

Ed begged his friend to cut his losses. He begged him to leave Detroit. His friend said he wasn't giving up. Ed lamented that housing wasn't the only problem.

Ed said that Big Business was a huge problem. He said the biggest problem with Detroit was the fact that the jobs that once made them a success were now being exported overseas or to other states. The Car Companies, even though they receive huge government support, did NOT bring their jobs back to Detroit. Instead they went to the suburbs or to other states. There was absolutely NO COMMITMENT to bringing jobs back to Detroit. 3/5ths of the jobs LEFT Detroit all to go offshore or to suburbs or other states. No One looked to save Detroit jobs.

Ed also said many people in political positions were not fighting to save Detroit. Instead, there were fighting to save their own salaries. He lamented that this was particularly a problem for those in political positions and in government jobs. He said those in political offices earned pensions for working a 2 year job. People who served as a Congressman or Senator earned a pension for each job. Those in various Federal and State positions were doing the same. These were the people in power. Of course none of them would do anything to do away with any of their job titles or pensions.

Finally, he said, the people in Detroit didn't have any pride in Detroit. Those in the neighborhoods were decimating those few people attempting to revive Detroit. But the problem was two fold. It wasn't only the people looting the homes of the re-builders, it was ALSO those businesses purchasing the Copper Pipe and other building materials from the looted homes. He was almost crying at this point. WHY WERE THE SMALL BUSINESS PEOPLE who had so much to gain from the rebuilding of Detroit BUYING the obviously Stolen Materials (like Copper Pipe) from the Looters?

Ed doesn't think there is any hope for Detroit.

I think there has to be a solution. However, before there can be a solution, the people of Detroit, the people of Michigan and the people of America MUST UNDERSTAND the Issues.

I Love Detroit and am Saddened by their Looming Bankruptcy

Detroit has gone bankrupt. I have always Loved Detroit. I have known it as such a vital city, a city that helped me grow up and understand the world.

I was born in Michigan.

Back in 1978, I worked in Detroit. I began my career in Lansing. I had worked hard and was promoted to a Manager position. All I had to do (besides my exceptional work performance) to become a permanent managers was to relocate to Detroit. I accepted. I was single. I was "That Girl."

Detroit was so different than Lansing. Lansing was the Capital, but it was still a small town, like Mayberry. Detroit was the "Big Time." I was a naive, little manager. I accepted. I said, "Yes. I'll be a manager in your downtown office." I worked for AT&T. I could do anything. Afterall, I was "That Girl!"

I was in for a rude awakening. When I was relocated to Detroit, I wasn't in downtown Kansas anymore. I was a little girl in the Big City.

Downtown Detroit was alive! It wasn't Lansing.
Downtown Detroit LIVED and BREATHED much like Downtown New York or Chicago. (where I later worked.)
I worked downtown on 1365 Cass Avenue.
My company relocated me. They paid for my stay at the grand Hotel Pontchartrain. (And the Renaissance Center, and the Michigan Inn.) There I was, this poor little migrant worker, little Mexican-American girl. I studied hard. I worked hard. I was promoted. Then relocated to the Big Time! I was a baby, being born to the "Big Time."
When going to dinner at the Hotel, I didn't even know which spoon to use or that the small bowl with a small towel was meant to wash your fingers before dinner.

I walked into my first day on my new job a Virgin. I was Opie. My small home-town office, with home town people, serviced other small town people. All so polite. All so naïve. Now, as a novice manager in my early 20s, I had NO IDEA what I was getting into.

I learned quickly. I had to. It was Baptism by Fire!
People spoke differently in DE-Troit. Operators spoke differently in DE-Troit. Customer Service and Sales were TOTALLY different in DE-Troit!! I learned this quickly.

No one kissed ANYONE's Ass in DE-Troit. People told it like it was. Service was saying What It Was. Business People wanted what they wanted now. Now! NOW!!! And our Operator's provided Sales, Service and Gave It Right Back to Them.

I had NO IDEA what I was getting in to at all. But I quickly learned.

I changed when I was in DE-Troit.
I grew up.

I quickly learned how to Adapt. How to survive from Day to Day. How to THRIVE in this Charged environment. How to Succeed. How to Win!

I quickly learned the City of DE-Troit was ALIVE! It Breathed. It's Chest heaved Up and Down!

The city had grown with the Auto Industry. It evolved through the 60s riots. It re-vitalized itself and re-invigorated it's downtown through Urban Renewal by the time I got there in the late seventies.

I was a Virgin when I went to DE-Troit. I don't mean that physically. I mean that from a business perspective. When I was a Manager in DE-Troit, I had to learn a whole new style. I had to learn an entirely new perspective. What I thought was rude wasn't rude. What I thought was business wasn't business. I grew up in la-la America. Sweet. Docile. Naïve.

In DE-Troit, however, this was the REAL America. People Argued. People Fought. People Differed in Opinion. People were Rich. People were Poor. Some people had power. Some people had none. We in Sales and Service treated Everyone the Same but we didn't take Guff from Anyone. But, we did need to know our Facts. We did need to stand up for ourselves. No more cow-towing or kissing anyone's Ass.

Where My Dad taught me so much discipline about completing my Education, maintaining a Hard Work ethic and a realistic view of being a Minority in America, what he Didn't Teach Me was the day to day reality of how to succeed in Business in America. Working in DE-Troit taught me this.

As I said, DE-Troit was ALIVE! Everything -- EVERYTHING happened in DE-Troit. Even going to lunch was an adventure. A few of us Managers went out to lunch every day. There was a little deli across the street with the best Hamburgers in the world. There were several downtown restaurants. And some of them in Windsor, which was just across the Bridge. Sometimes, we all went to Tiger Stadium together. We were all beautiful, young girls. We sat close to the dugout. The players always sought us out as we pleaded for their autographs.  I remember the famous 3rd baseman Aurelio Rodriguez, who NEVER signed autographs for anyone, signed my book. My girlfriends who frequented the park were in awe. He was so nice and polite to me. However, when I showed my future husband his autograph, somehow my autograph disappeared.

I found a wonderful apartment on 8 mile. Every other weekend, I drove back to Lansing to visit my boyfriend (future husband).

While I was in DE-Troit, my boyfriend decided that he couldn't stand me being so far away from him, so he asked me to marry him. I accepted. I was able to get a transfer back to Lansing, and we married the following August.

I always think fondly of Detroit.

I'm going to write more about Detroit because I have so many fond memories of the city.
I've been studying the impacts of the so-called bankruptcy and the plans being put in place by the Republican Governor. I think he is wrong. I will explain why in my next blog about this topic.