Wednesday, May 04, 2011

Michigan, Rust Belt States Lead Economic Recovery

3. Financial Times: "Growth in jobs belies rust belt’s reputation" (includes graph above)

4. Scott Grannis: "Car Sales Remain Very Strong"


At 5/04/2011 7:53 AM, Blogger Rufus II said...

The Top 4, and seven of the top ten are Corn/Ethanol States.

Jes sayin'.

At 5/04/2011 8:17 AM, Blogger morganovich said...

how many of those mighigan jobs were bought and paid for by the massive giveaway to gm and Chrysler?

GM and Chrysler got what, $57 billion between them?

hey, that's only $1.9mn per job created...

the only reason michigan is leading this league is that they got huge bailouts. no other state got anything like that kind of manufacturing money from the feds.

At 5/04/2011 8:53 AM, Blogger Rufus II said...

A lot of that money was paid back, wasn't it?

At 5/04/2011 9:17 AM, Blogger morganovich said...


no. it was not. that's been some truly reprehensible political grandstanding and reporting.

they have paid back a tiny portion (using government money to do so). keep in mind that less than 7bn was a loan. the other 43 bn was an equity stake. they used the money from the latter to pay the former and then claimed they had "paid them back" when they has done nothing of the sort.

it's going to be a huge loss for the treasury. breakeven for them is around $52/share on GM. the stock is 33 and has recently been as low as $29. it has never been within 20% of 52 and quite possibly never will be.

also, it does not include the NOL's (tax offsets) that the two were allowed to keep out of bankruptcy (which flies in the face of all established BK law). this is another 18 or so bn in taxes GM will not have to pay.

At 5/04/2011 10:03 AM, Blogger Benjamin Cole said...

Morgan Frank--

Check out the Tax Foundation for the annual bailouts that go to rural states.

A state like North Dakota, per capita, gets back about $6000 net from the federal government--and that grows every year.

There is $24k of federal lard at the dinner table of the typical North Dakota family of four.

At 5/04/2011 11:29 AM, Blogger rjs said...

michigan has been subsidizing the ag states for decades, so a turnabout is fair play...

At 5/04/2011 11:29 AM, Blogger Bruce Hall said...


Be careful of statistics...

North Dakota has an extremely small population. North Dakota is centrally located in North America and has [had] strategic military value, hence significant military spending by SAC versus the small population. North Dakota has significant shale oil resources. Using the tax structure write-offs as "federal spending" is double-think. North Dakota also lays claim to the Red River of the North which is one of the largest flood plains in the U.S. I guess FEMA and the Corp of Engineers costs can be added to the pile.

Most of ND's income is agricultural related... which does benefit from the convoluted federal subsidies programs.

Still, I think the federal government has to spend the money in ND in order to keep people there. Otherwise, the Canadians could come in and take over.

At 5/04/2011 11:38 AM, Blogger Buddy R Pacifico said...

If Manufacturing is "the shining star" of the U.S. economic recovery, then it is not irrelevant, but instead vital for the U.S.

At 5/04/2011 12:05 PM, Blogger James said...

Recovery!!! You call this a recovery? The only parts of this economy that have had a recovery in any meaningful way are the banks because of a bailout, Wall Street because of foreign earnings, and those with a government subsidy. In our economy corporate earnings depend more on K Street lobbyist than anything else.

At 5/04/2011 12:24 PM, Blogger Benjamin Cole said...

The trade-enhancing exchange rate of the dollar is helping Michigan--and shooting to hell arguments Dr. Perry often makes that somehow imports and exports don't matter. Tell them that in Michigan.

Figures show that about 1 percent of 1Q GDP growth was from export growth, and that we only had 1.4 percent GDP growth in the 1Q.

Crickey, without export growth we would be dead in the water.

And yes, this has been a flaccid recovery. Bernanke needs to pour it on. QE3 needs to be even bigger than QE2.

At 5/04/2011 12:28 PM, Blogger Benjamin Cole said...

Bruce Hall-

Perhaps the Canadians are a bit sneaky.

OTOH, how long until North Dakotans think they are better off as part of "Greater Canada"?

I think it is time for not only a balanced federal budget, but "fair play" in that every state gets back roughly equal to what it sends to DC.

Right now, we have some states subsidizing other states for decades on end, creating enfeebled, weakling, knock-kneed rural economies, and people dependent eternally on federal largesse.

At 5/09/2011 9:30 PM, Blogger Hot Sam said...

Percent changes please.


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