Thursday, February 09, 2012

Rustbelt Recovery: Michigan Has a Budget Surplus And a Lower Jobless Rate Than Washington D.C.

NY Times -- "Over most of the past decade, budget deliberations in Michigan have taken on a glum and familiar monotony: What do we cut now? But the state that experienced an economic downturn earlier, deeper and longer than most of the rest of the country has made an unlikely discovery as its officials closed out its latest financial books: Michigan has a $457 million surplus. Even more surprising: Revenues, which had sunk or had been mostly flat for all but one year since 2000, have grown. Not a lot, but grown.

Lately signs have shifted. Manufacturing jobs, often declared dead by frustrated workers, have picked up. United States automakers have increased production, saying sales are up, and General Motors, only a few years after a federal rescue and bankruptcy, recaptured in 2011 a crown some thought was merely a dusty memory — that of the world’s largest automaker. 
 
In part, as a result, the unemployment rate in Michigan, which reached 14.1 percent in 2009 and had regularly been among the worst several states in the nation, has lately been among states showing the most significant and continuing rates of improvement, though at 9.3 percent in December it is still above the national average.

By the close of the state’s 2011 budget year, in September, Michigan had collected $8.8 billion in general fund revenues — more than $1 billion less the amount collected in, say, 2000, but noticeably up from the $7.6 billion in Michigan’s coffers in 2010, thanks to growth in state income and sales tax revenues. Officials are now projecting $632 million more in revenues over the next two years than they had been expecting." 

MP: After leading the country for most months in 2008 and 2009 with the highest jobless rate in the country, Michigan's economy has now recovered to the point that it ranked No. 11 for the month of December.  Nine states and even the District of Columbia at 10.4% had higher jobless rates than Michigan's December 9.3% rate.  Nevada now ranks No. 1 in the country at 12.6% and more than three percentage points above Michigan, and California has the second highest state jobless rate for December at 11.1%, almost two full points above Michigan.  

20 Comments:

At 2/09/2012 5:08 PM, Blogger Benjamin said...

The beneficial exchange rate for the US dollar is helping out Michigan. Free trade ripped that state to pieces; but now maybe free trade can turn it back into a powerhouse.

Living costs in Detroit are probably half of that of a Germany or Japan. It may look like a Third World hellhole, but you can buy a house for car money.

Sure Detroit unions wanted too much (though less than German unions) and sure management was bad. But basically, free trade killed Detroit. The benefits and drawbacks of free trade are not spread out evenly, geographically speaking, or any other way. No one ever said they were.

 
At 2/09/2012 8:05 PM, Blogger Marko said...

Someone needs to do a statistical analysis of what happens in a democratic state when a Republican comes in and the state house goes republican. Gets better, I bet.

 
At 2/09/2012 8:38 PM, Blogger indur goklany said...

One needs to correct the trend in the unemployment rate for the people who have dropped out, or have left the state for greener pastures or "retired."

 
At 2/09/2012 8:53 PM, Blogger Che is dead said...

Gee, what's changed? Oh, that's right, Michigan now has a Republican governor and legislature.

 
At 2/09/2012 8:58 PM, Blogger Che is dead said...

"Free trade ripped that state to pieces ... basically, free trade killed Detroit." -- "Benji", "I am not a leftist. Really, I'm not. I swear.

No, the UAW and the Democrat Party killed Detroit. Free trade has had nothing to do with it.

 
At 2/10/2012 12:27 AM, Blogger Benjamin said...

Che-

Los Angeles has boomed with free trade as port volume has swelled. Free trade made Los Angeles boom, ergo I am a rightie. Or am I leftie?

Or, do I call it as I see it, free of stale and partisan rose-colored glasses and blinders?

 
At 2/10/2012 7:59 AM, Blogger geoih said...

Quote from Benjamin: "But basically, free trade killed Detroit."

That's one of the stupidest things you've written. There hasn't been any "free trade". Detroit has been a giant hole for 50 years and it has nothing to do with trade.

 
At 2/10/2012 8:00 AM, Blogger geoih said...

Quote from Benjamin: "But basically, free trade killed Detroit."

That's one of the stupidest things you've written. There hasn't been any "free trade". Detroit has been a giant hole for 50 years and it has nothing to do with trade.

 
At 2/10/2012 8:10 AM, Blogger jd said...

Of course there are winners and losers in free trade, but the alternative--tariffs?--is always worse. But to say that free trade is THE reason for Detroit's failure is not helpful.

By the way, guess where most of the "outsourced" UAW/Detroit jobs went. Mexico? China? India? Nope. Alabama.

Legacy costs of the unions are THE single biggest reason for Detroit's failure. Detroit's model was unsustainable. It's a credit to their management that they could turn out a competitive product with so many costs built in.

It will be interesting to see what happens with Detroit. I really don't think the unions gave up much, since they were basically paid off by Obama.

 
At 2/10/2012 10:15 AM, Blogger Paul said...

Benji,

"Or, do I call it as I see it, free of stale and partisan rose-colored glasses and blinders?"

No, you're just an idiot.

Jennifer Granholm was possibly the worst governor of any state in history. But she was just the last of a long line of liberals who killed Detroit..

 
At 2/10/2012 1:13 PM, Blogger Ron H. said...

Paul: "Jennifer Granholm was possibly the worst governor of any state in history. But she was just the last of a long line of liberals who killed Detroit.."

Of course, not satisfied with only the damage she can cause by her self, she now teaches "public policy" at UC Berkeley.

If there's any good news at all, it's that she was born in Canada, and won't be running for president.

 
At 2/10/2012 1:44 PM, Blogger Paul said...

Ron,

She was also an economic advisor to Obama, a fact that both horrifies and explains alot.

I saw her in a debate with Steve Wynn where she actually explained to him how to create jobs. I sh*t you not.

 
At 2/10/2012 1:53 PM, Blogger sethstorm said...


I saw her in a debate with Steve Wynn where she actually explained to him how to create jobs. I sh*t you not.

Unlike Wynn, she isn't going to question the US for not genuflecting enough towards business.

 
At 2/10/2012 1:57 PM, Blogger sethstorm said...

JD:
Wrong. Those jobs did go to the Third World.

Then again, many states in the South including Alabama, function like Third World countries. They forsake freedoms for regular people while giving endless freedoms for business to enslave.

The only redeeming part of Alabama is their immigration law. Rip RTW out of that state and it'll do just as fine if not better.

 
At 2/10/2012 2:36 PM, Blogger Paul said...

Sethstorm,

"she isn't going to question the US for not genuflecting enough towards business."

Yeah, she did all she could to stomp out business. Worked out well, didn't it? Not surprised you're a fan.

 
At 2/10/2012 3:39 PM, Blogger jd said...

Sethstorm:

Just saying I'm wrong doesn't make it so. The fact is that more UAW jobs went to Alabama than anywhere else. Get your facts straight.

I've been trying to Google some facts on this, but the story is apparently too old. I have known about this "outsourcing" for many years. I guess we'll just agree to disagree, unless you can prove me wrong somehow.

 
At 2/10/2012 4:00 PM, Blogger JACK said...

I hope the increase in revenues is not spent. Create a nest egg. If it gets too big, lower taxes! Creative Destruction for all!

 
At 2/10/2012 5:12 PM, Blogger Ron H. said...

Paul: "I saw her in a debate with Steve Wynn where she actually explained to him how to create jobs. I sh*t you not."

LOL

That's hilarious! Was that on Comedy Central, or an old Laugh-In segment?

 
At 2/10/2012 5:22 PM, Blogger Ron H. said...

Jack: "I hope the increase in revenues is not spent. Create a nest egg. If it gets too big, lower taxes! Creative Destruction for all!"

There should be no government "nest eggs". Why would you want government to take money from you and hold it until they find something to spend it on? Shouldn't it just stay in your pocket? Unless you think government can better decide how to spend your money than you can.

 
At 2/11/2012 10:01 PM, Blogger VangelV said...

Living costs in Detroit are probably half of that of a Germany or Japan. It may look like a Third World hellhole, but you can buy a house for car money.

It not only looks like a hellhole but it is a hellhole. Unless there are real and meaningful changes all you are seeing is a liquidity fueled dead cat bounce.

 

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