When Good News Is Bad News

A few more glimmers of hope are shining through the clouds that have enveloped our economy for far too long. These little bits of good news are clearly bad news for Republicans.

The recent news includes:

--A nearly four-year low in first-time claims for unemployment benefits.
--A rise in new home construction to start the year.
--A rise in consumer confidence, even among those still without jobs.
--Hefty profits in the auto sector, including a record $7.6 billion by GM, along with large profit-sharing checks for their employees.

Yes, there is bad economic news out there, too, and the recovery could be faster, but the good news is welcomed by most people. The exceptions? People like the remaining candidates for the Republican presidential nomination who are now making appearances in the state in advance of the Feb. 28 primary. Mitt Romney, for example, has the task of explaining why his prediction that a rescue of the auto industry would be its deathknell was so wrong.

While Romney does his explaining, GM and its employees will be paying taxes to Uncle Sam and the state of Michigan on profit and income that wouldn't have existed were it not for the rescue.

Are Livingston Republicans Signing on to 'Picking Winners and Losers'?

I wonder if the Tea Party Republicans know what their elected officials in Livingston County are up to regarding the Ann Arbor SPARK contract.

Livingston County officials seemed to be trying to sneak the $1 million, three-year deal in the backdoor when nobody was looking by holding closed door meetings to have it explained to them. After that was exposed, the deal has been slowed down enough so that people can at least ask a few questions. Not that the answers from the economic development corporation with strong ties to Republican Rick Snyder have been very illuminating.

But the power point presentation made to Livingston County government officials suggests that grants and loans to private businesses are part of the deal. When Democratic Gov. Jennifer Granholm did it with the film industry, Republicans attacked it as "picking winners and losers."

But it looks like that is some of what Ann Arbor SPARK does. The power point presentation, no longer available on the Livingston Press and Argus website, says that its services for start-up businesses include "microloans" and "pre-seed investments."

In 2010, Ann Arbor SPARK says it awarded "12 pre-seed investments and 30 microloans" to start-ups. Between 2006 and 2010, Ann Arbor Spark reported it made 54 pre-seed investments in 52 companies, at an average of $225,000 per company, and it made 48 microloans to 46 companies, averaging $39,000 per company.

Ann Arbor SPARK's power point presentation didn't explain where that money came from, but since private business is only kicking in $60,000 of the $335,880 a year that Ann Arbor SPARK wants from Livingston County, the question should be asked whether taxpayer funds will be going to private companies or whether there is another source of funds for these "pre-seed investments" and "microloans."

In other words, will Livingston County be picking winners and losers with our tax dollars? Given that Republicans hated that idea so much when Granholm did it, it's pretty remarkable that no Republicans are putting up a fuss over that possibility.

Debt Ceiling Debacle Really Did Hurt

Right after the contentious debate over raising the debt ceiling last summer, I had the feeling that the recklessness of that debate had helped slam the brakes on the recovery underway in the U.S. economy. I know I personally felt less confidence about the direction of our nation, given the willingness, even eagerness, of so many Republicans to gamble with our nation's financial stability for the sake of politics.

Now there's a little bit of evidence to back up how I felt. In a column in the Sunday Detroit Free Press, Tom Walsh wrote of the impact the debate had on hiring in the view of Carl Camden, the CEO of Kelly Services.

Hiring of temporary workers was up 10 percent in the first half of 2011 compared to the previous year. But then came the debt ceiling debate an the Standard and Poor's downgrade of the U.S. credit rating. By August, the growth had melted away.

Walsh quoted Camden as saying:

"'That's the time of year when Kelly's part-time hiring usually goes into a cyclical upswing. It had been true for 60 years, but this time it was not true,' Camden told (Walsh). 'We moved sideways instead of seeing a cyclical boost. A lot of employment momentum was lost.'"

Walsh didn't blame Republicans directly, referring to partisan squabbling. But Camden makes it pretty clear what he meant.

"It wasn't the debate itself, it was the tone of the debate," Camden said. "People actually believed they might do something crazy, or crazed -- like saying it's OK for the U.S. government to default on its debt."

It wasn't President Obama or Democrats advocating a default on the debt. It was the party that supposedly knows so much about the economy that was engaging in the "crazed" talk about defaulting. Maybe people like Camden will have that in the back of their minds when the 2012 campaign heats up.

Payroll Tax Cut is Classic 1 Percent Over 99 Percent

Mike Rogers' Republican Party just can't help itself. Right now, they seem to be doing everything they possibly can to help millionaires and billionaires instead of working people. And they aren't even hiding it anymore.

That's clear from the debate over extending President Obama's payroll tax cut, which expires at the end of this year. The tax cut has saved working families an average of $1,000 a year. With the economy slowly recovering, now is not the time to take money out of the pockets of working people.

President Obama has proposed extending the current 2 percent payroll tax cut and increasing it 3.2 percent. That would mean up to $1,500 a year in the pockets of working families, giving a further boost to the economy.

Rather than add to the deficit, President Obama would pay for the tax cut with a surtax on the wealthiest sliver of Americans. You can click here to find out what the tax plan means for you.

So far, Republicans in the Senate have voted against the payroll tax cut in order to protect the 1 percent richest Americans. Let's hope Mike Rogers gets his chance to vote on the payroll tax cut for his constituents in the 8th Congressional District, even if it means Congress is still in session on New Year's Eve.

Some Nerve!

The folks at Standard & Poors have some nerve.

It was they who gave AAA ratings to the junk mortgages that home lenders were handing out like candy a few years ago, precipitating a financial crisis that caused the world economy to collapse, and with it federal tax revenues.

So now they tell the federal government they are downgrading the federal government's credit rating from AAA to AA+, even though the federal government reached an agreement to avoid default on its obligations.

What makes them experts all of a sudden?

A lower credit rating means higher interest rates paid by the federal government, i.e. taxpayers, on the money it borrows. And who will be the beneficiaries of those higher interest rates? Wall Street investors, of course.

Nothing like having people coming and going.

Help on Homes Should be Closer to Home

A Livingston County family received media attention last week after picketing the sheriff's sale of their home, which they say was wrongly foreclosed upon due to a bank error.

In reporting on the story, the newspaper contacted a Flint-area organization, Metro Community Development, for comment on the consumer side of the matter. The article noted that Metro Community Development recently helped the owners of a Pinckney home fight foreclosure.

With 1 out of every 215 homes in the county in foreclosure during June, it's too bad people in Livingston County have to rely on an out-of-county organization to fight foreclosures. Shouldn't there be help closer to home with a local agency dedicated to keeping homes from foreclosure, protecting our tax base and home values?

Start of a Trend?

Brighton appears to be one of the first communities in Michigan to lose jobs due to Rick Snyder's plan to "reinvent" Michigan.

Fronius USA, a solar company with its American headquarters in Brighton, says it is moving to Indiana due to tax incentives, where it plans to create 512 jobs by 2016. The state of Indiana said its offer of $4.25 million in tax credits and other incentives prompted the move.

Snyder is getting rid of incentives and instead cut business taxes by $1.7 billion by dumping the taxes on senior citizens and the poor. But even though Fronius, as a limited liability corporation, would not owe income taxes in Michigan under the new law, it's not enough to keep the company in Michigan.

The Michigan Economic Development Corporation is trying to figure out exactly what happened and why, which doesn't exactly inspire a lot of confidence in Snyder's operation.

Brighton isn't the only city to lose jobs due to Snyder's "reinvention" of Michigan. According to the Detroit News, Spartan Motors Inc. is moving some its operations from Michigan to Indiana, too.

Let's hope this is not the start of a trend.

Tax Cuts Still Not Enough for Business?

Apparently, a $1.7 billion tax cut for business isn't enough. Michigan "stinks" as a place to do business.

That's according to the Detroit Free Press on Sunday.

The newspaper says Michigan needs to be "more hospitable" to business.

What exactly does that mean? The columnist doesn't say. Should we assume he means right-to-work-for-less legislation? Does he mean ending all regulation of business? Getting rid of worker-safety requirements?

The article mentions Michigan's strong public universities as attractive to business, but Rick Snyder and the Republicans have already slashed funding to those institutions. Tuition increases to replace some of the lost state funds will make it harder for many students to attend and graduate, giving the state a smaller pool of college grads available for hiring. Is that attractive to business?

A little more specficity would be nice, but the columnist's problem may be that he won't know what it is that makes Michigan a better place to do business until Snyder tells him. You can bet whatever Snyder proposes that he claims will make Michigan's business climate more "hospitable" is what the columnist will support. That's one of the problems with business columnists. They end up as cheerleaders for whatever business leaders demand.

Gardening Advice for Rick Snyder

"Plant your peas on St. Patrick's Day and you'll harvest them on Memorial Day," my grandmother told me once.

As a farm wife, Grandma knew a thing or two about making things grow. And she meant that advice literally. I did exactly what she said a couple years and did in fact have fresh peas in late May.

Of course, Grandma -- and I -- both knew that while you could plant peas on St. Patrick's Day, you wouldn't dare do that with tomatoes or sweet corn. Different crops, different planting schedule. There's no one-size fits all when it comes to growing things.

But when it comes to growing businesses, Rick Snyder seems to think one size does fit all. His approach -- no taxes for most businesses and hope they create jobs -- is far removed from what most states are doing and what Michigan has been doing -- targeting incentives to growth industries.

Snyder won't even promise that his approach will create jobs. Even if it were to create jobs, it will do nothing to diversify Michigan's economy by making it a center for a new industry, such as wind power or the film industry.

And Snyder does not seem to care. He is perfectly content to ride the resurgence of the auto industry back to prosperity and let it go at that. If a film studio happens to locate here, that's OK with him, but he's not going to do anything to make that happen.

Why would a film studio locate here now? Because of low taxes? Businesses thrive on synergy, on a community of like-minded people in the same field. Having a critical mass of people in the same field leads to professional organizations where ideas are shared, ties with colleges and universities that train the people you need to hire, a culture that values and promotes what you do. Kind of like Silicon Valley. In the computer software field. And aren't computers supposed to be what Snyder knows a lot about?

Michigan was well on its way to developing new industries like wind energy, film, and advanced batteries until Snyder's budget pulled the rug out from under them.

The state is now back to the equivalent of planting all the crops on St. Patrick's Day and hoping something besides peas survives by Memorial Day.

Everybody Likes a Sale

I went shopping for clothes recently and the minute I entered the store, a rack labeled "50 perfect off" caught my eye and drew me like a magnet.

It's the same when I buy groceries. Somehow the items that are on sale find their way into my cart, regardless of what was originally on my list.

Judging by the television ads touting Kroeger's sales and the newspaper circulars that arrive on Sunday, I'm not alone.

Everybody loves a sale. From time to time, stores try to buck that discounting by offering "lowest prices all the time," but somehow that never seems to last.

So I wonder how Rick Snyder's approach to selling the state of Michigan to business prospects is going to work. How can Michigan get anyone's attention with its "lowest prices all the time" approach while all the other states are offering tax credits targeting specific businesses or activities?

The reality may be starting to dawn on Snyder's administration. It has gone from promising that eliminating taxes on businesses (and shifting the burden to poor people and old people) would create jobs, to saying that they can't "quantify" how many jobs it will produce.

Is Snyder Going to Let Business Have It Both Ways?

Everybody knows about Rick Snyder's plan to let most businesses get away with paying no taxes in Michigan while shoveling the burden onto poor people and retirees, with no guarantee that the state will get anything in return.

Snyder claims that businesses will automatically flock to the state and create thousands of jobs -- not that any of those jobs would help retirees, of course.

As part of that deal, Snyder was supposed to get rid of the incentives that required businesses to actually produce jobs in return for getting the credits.

Except now it looks like he's waffling on that. According to the Detroit Free Press, economic development groups are telling the Snyder administration that they can't compete with other states that offer incentives. So it looks like the Snyder administration will raise the $50 million limit it wants to put on incentives.

Which means businesses will get the benefit of low or no taxes, plus incentives. All paid for by somebody else.

Who said there's no such thing as a free lunch?

Bonuses Not Just Good for Auto Workers

The recent news that workers for Chrysler and General Motors will receive bonuses is good news for everybody.

Who knows exactly what the hourly workers will do with their bonuses. Since GM workers aren't getting raises, some might feel compelled to just sock the extra money away. But I'll bet at least a few of them spend a few dollars celebrating -- a nice dinner out, new clothes for the kids, or whatever. And of course they'll pay more state income taxes than they would have otherwise, helping the state's bottom line.

A lot of the money will find its way into the coffers of conservative business owners who are mad that the companies are still in business and that the workers still have jobs. So will they have the courage of their convictions and tell the autoworkers to keep their money and take their business elsewhere?

Americans Deserve a Raise

American corporations need to re-learn the lesson Henry Ford gave the world in 1914, when he instituted the $5 day.

Ford's reasoning was simple -- pay workers enough so that they can afford to buy the product they produce, and the company will sell more product and make more money.

American corporations have forgotten that lesson, and that's one reason our economy is struggling. Corporations racked up record profits in the third quarter of 2010. That's right, record profits -- 30 percent over the previous year. Search the internet fot the phrase "3rd quarter corporate earnings record" and look at the long list of companies reporting record earnings.

Yet wages remain flat. And that means demand remains flat. People who are not getting raises feel uncertain about their jobs and are careful with their money, especially when the corporate media is mostly silent about the record profits corporations are raking in and stressing gloom and doom.

In order to put more demand into the economy, the Obama administration extended the Bush tax cuts, which disproportionately benefit the wealthy, who won't spend the money anyway. The thinking was that the proportion of money going to 98 percent of the population would be spent, creating more demand in the economy. In effect, government gave Americans a raise because corporations wouldn't.

Americans need more money in their pockets, but it shouldn't come from the government, which has to borrow money from the Chinese in order to give it to us. It should come from our employers, the same corporations who earned record profits in the third quarter of 2010. Record profits. Keep repeating that. Corporations reported record profits in 2010.

Michigan Gov. Rick Snyder claims he can revitalize Michigan's economy with an entrepreneurial spirit. What good will it do for Michigan people to start new businesses if people can't afford to buy the goods and services they invent and offer?

Americans need a raise. And it should come from corporations, not government. They can afford it. Don't let them tell you otherwise.

Cutting Our Way to Prosperity?

Rick Snyder is a number cruncher, not an economist.

He thinks if state government would only cut everybody's wages, we'd all be better off, according to an interview in the Detroit Free Press on Wednesday (Dec. 22, 2010).

Let's review how that will work. Snyder waves his magic calculator and all the teachers in the state take a 10 percent wage cut, or maybe just 5 percent. They will all celebrate by going out to eat at one of the restaurants in downtown Brighton, right? Or maybe they'll head to the mall and buy some bling for themselves.

And the retired state employees whose benefits Snyder wants to cut? They'll react to smaller pension checks by playing more golf, eating breakfast every morning at one of our county's great breakfast spots. buying a little extra for their grandchildren at Christmas, which will make the cash registers ring, ring, ring.

Actually, no, they won't. They'll cut back what they spend. The economy will get smaller, not bigger.

What our economy needs right now is more consumer demand, more people willing to spend money rather than save it, so that businesses must restock their shelves, and their suppliers must add more people to produce what the businesses are ordering.

Snyder and all the Republicans who want to cut, cut, cut, are taking Michigan and other states in exactly the wrong direction. The sad thing is, they probably really do understand the economics of it, but just want to hurt public employees.

'Monopoly' Game Is Where We're Headed

When I was a kid, "Monopoly" was all the rage in my neighborhood. A group of neighbor kids, as we called ourselves, would gather in someone's basement and play. Games would go on all day, with a break to run home for lunch. Although we each started with the same amount of money, one by one we would lose our money and drop out and have to sit on the sidelines and watch. Eventually, somebody would end up with all the money. And then the game would be over.

That's the problem with the American economy today. Too few people have too much of the money. The rest of the people have nothing to play with. They have to sit on the sidelines of the economy, unable to buy things that other people make and sell. According to The New York Times, 1 percent of Americans have more than a third of the nation's wealth. Eighty percent of Americans have just 16 percent of the wealth. And no, it hasn't always been that way. Tax policies in the last few decades have increased the concentration of wealth at the top.

And Republicans think the answer is to give those few people even more of the money, which they cannot possibly spend. And no, they won't use it to "create jobs" because there is nobody to buy anything.

The end game is just like "Monopoloy."

P.S. I mean "Monopoly."

Banking Crisis, Derivatives -- How Funny Is That?

Confused about credit default swaps? Can you define a derivative? Do you know why the global financial system collapsed under George Bush?

Come to Livingston County Dems' next movie night and learn the answers to those questions -- in a movie that will have you laughing out loud!

Livingston Dems will show a special movie on capitalism on Friday, June 4, at 7 p.m. at party headquarters, 10321 Grand River Road, Suite 600, Brighton.

An ice cream social -- featuring ice cream and all the trimmings -- will follow. Suggested donation is $10 per person or $15 for two. Call (810) 229-4212 for more information.

Don't miss out on this fun time!

Why Have They Been Hiding the Recovery Act Funds?

It's bad enough that Republicans have been lying about taxes going up under President Obama when in reality the 2009 federal economic recovery act cut taxes for 95 percent of all Americans.

But now we find out the Livingston County Commissioners have been sitting on information that $24 million in bonds were available under the same law to help local businesses.

The county commission had designated Livingston County as a recovery area awhile back, making the county eligible for the bonding. WHMI carried a story on the matter at the time, but then the matter disappeared.

On Thursday (April 15, 2010), Livingston County Commissioners finally got around to telling people who could take advantage of the bonds that they even existed. And they only did it because the local chambers of commerce brought people together at a summit on the new economy.

Commissioner Jim Mantey made a brief announcement about the recovery act bonds from the floor during the question and answer period. Afterward, he was "immediately swamped" with people wanting more information. He wasn't even part of the agenda, didn't have detailed material, only suggested people call the county offices or the Livingston Economic Council for more information.

Why hasn't the county commission been doing more to get the word out on the existence of these bonds? Is it because the all-Republican board hopes the recovery act (and President Obama) fail? Or are they simply lacking in the imagination and drive to lead our county in the 21st century?

New Economy Summit: Heresy for the GOP

The Livingston County summit on creating a 21st Century economy had a lot of bad news for our county's way of doing business -- cut taxes, cut taxes, cut taxes and hope people move here so they can drive 40 miles to work.

That's so yesterday -- according to both speakers at the event on Thursday (April 15, 2010) sponsored by the area chambers of commerce.

More than 300 people crammed in to the event to hear a pair of speakers explain that members of the next generation -- the Millenial Generation -- have a different set of values from the baby boomers. They want communities that are vibrant and interesting. They are highly environmentally conscious. They are mobile, willing to move to interesting places even without a job and regardless of the cost of living or the tax rate. They think spending $400 a month on a car and driving long distances to work is a waste of money.

All that must have sounded like heresy to Livingston County Republicans who want only to brag about low tax rates and stand in the way of any kind of change. Yet the speakers said Livingston County must attract young people, with their entrepreneurial spirit, because the new economy will be based on attracting one or two jobs at a time rather than landing a big manufacturing plant that will solve all our problems.

Dan Gilmartin of the Michigan Municipal League said that members of the Millenial Generation are marrying later and having children later -- as much as 10 years later. And they go out twice a week, which over 10 years amounts to about 1,000 nights. Does Livingston County have 1,000 nights of interesting things for them to do? If not, they won't move here, he said.

Transportation alternatives, he said, have to be at the top of Livingston County's list. "If we don't figure out transportation, nothing else matters," he said. Pointing to a proposed rail line between Livingston County and Ann Arbor, he said, "It will light your economy on fire."

Glenn Pape, of the Land Policy Institute at Michigan State University, said young people want more diversity in their quality of life, not just the suburban model of Livingston County. They want to be able to hike and bike after work, to have a downtown to walk around in. He said that is what will revive Livingston County's economy, "not industrial parks, not low wages, not low taxes."

Businesses, he said, are looking for young, educated people, not low costs and low taxes.

Not low taxes?

Good luck selling that to the Republican leaders of this county, the county commission that has turned its back on contributing to a study of a rail line between Livingston County and Ann Arbor.

The new economy summit was only the first step. Meetings are planned May 5 at Three Fires Middle School and June 16 at Crystal Gardens to talk about writing a strategic plan to take advantage of Livingston County's assets for the new economy.

We can't let the same old people, with the same old ideas, write the plan. Plan to attend and contribute your ideas.

Dow Passes 11,000 -- But Socialism Is Near!

One question that is never asked of all those people claiming the country is on the verge of socialism is, why is the stock market higher than it's been for 18 months?

If the government were about to take control of the means of production -- that's what socialism is, after all -- wouldn't the value of all the stocks in the country plunge to zero? Wouldn't investors believe they were throwing their money away by buying stock in companies that were about to be forcibly taken over by the government?

Yet Monday (April 12, 2010), the stock market passed 11,000 for the second trading day in a row.

Seems to me, capitalism is doing pretty well.

Time to be Part of the Solution -- Come to Livingston's New Economy Summit

Livingston County needs a new economic strategy. Actually, I'm not sure it ever had one, other than hoping people would move here from other places. But better late than ever.

That's why, as members of the Brighton Area Chamber of Commerce, the Livingston County Democratic Party has been watching plans for the New Economy Summit planned for April 15. The Livingston County Press and Argus has a rundown on the event.

The goal of the summit is to lay out the process for writing a strategy for developing Livingston County's economy in light of the realities of the 21st Century, including the loss of manufacturing jobs. Organizers want everyone to be involved -- not just a few business leaders, but a true cross section of our community. Writing that strategy will take nine months or more, but this is the time to find out what steps are involved and how you can contribute.

The summit is scheduled for 7:30-9:30 a.m. at Crystal Gardens banquet center, 5768 E. Grand River Ave. in Genoa Township. The chambers of commerce in Howell, Brighton and Hartland and the Michigan State University Land Policy Institute are sponsoring the event.

The event is free (and includes a continental breakfast) but organizers are asking people to register. Contact the Howell Area Chamber of Commerce at (517) 546-3920 or at chamber@howell.org; the Greater Brighton Area Chamber of Commerce at (810) 227-5086 or at info@brightoncoc.org; or the Hartland Area Chamber of Commerce at (810) 632-9130 or at info@hartlandchamber.org.

As the Press and Argus editorial noted, "If you are one of those people who would rather help shape a community than complain about what 'they' are doing, this would be the time to get involved."

So get off the sidelines and come to this event. Our county needs your ideas and volunteer efforts.