Save the Rustbelt

2005 in Review

2005-12-18T19:24:00.000-08:00

The Delphi bankruptcy and the contiung problems at GM and Ford cast a death pall over the Rustbelt.

Both Ohio and Michigan had improved to the point of stagnation (a big improvement over bleeding to death) but it appears the bleeding is about to begin again.

As the nation's treasury is sucked away into Iraq and New Orleans even promised federal help for the Great Lakes is fading fast.

Rustbelt cities continue to self-destruct at the ballot box, with Detroit headed for receivership and Toledo headed for a rerun of earlier follies.

In Michigan, a grand compromise cut some business taxes by .02%, and that is supposed to save the Michigan economy.

In Ohio Governor Bob Taft, a convicted criminal and world-class incompetent, is going to spend another $500 m on his pipe dreams after spending $300+ million to destroy 250,000 jobs.

It's going to be a rough year.

The End of the Middle Class?

2005-10-26T10:30:00.000-07:00

Delphi, an auto parts spin-off of General Motors, has filed bankruptcy and ask for new labor contracts.

Delphi has proposed...........

65% wage cuts

At least a 500% increase in out-of-pocket health care costs

Can a worker making $18,000 a year pay $5000 for health care, after taxes.

It is no secret that the Big 3 and the UAW have been committing market share suicide for three decades. Maybe it is time for new leadership?

More Bad News

2005-09-14T10:05:00.000-07:00

Both General Motors and Ford are going to pressure parts suppliers to move parts manufacturing overseas.

This will be devastating for Ohio and Michigan.

When does it end? When do we get some leadership?

Economic Miracle in Ohio

2005-09-07T14:00:00.000-07:00

Ohio Lt. Governor Bruce Johnson, also head of the Ohio Department of Development, has announced that Ohio's economy has recovered.

Bill Burga, head of the Ohio AFL-CIO, took exception (The Blade, 9/2/2005), as do we.

Curiously, a few days late the Columbus Dispatch (9/4/2005) ran a detailed story about Ohio's substandard economy, including detailed statistics.

Perhaps being delusional is an advantage for a member of the Taft administration, but that does little for Ohio's hurting workers.

Ohio and Michigan in the Dumpster

2005-08-08T11:00:00.000-07:00

In a recent ranking in the American City Business Journals (a series of city specific websites), Ohio is tied for 49th (with Illinois) and Michigan is 51st (Puerto Rico is included).

Western states are booming, although we wonder what happens when they run out of water.

No good news on the horizon anywhere in the Rustbelt.

http://www.bizjournals.com/

"Dayton at the Crossroads"

2005-08-02T09:31:00.000-07:00

The Dayton Daily News ran an excellent series this weekend on the down spiral and potential recovery of the Dayton metro area.

With the Delphi company teetering on the edge, thousands of jobs are still at risk.

Ohio cries for some good news - but none appears on the horizon.

Rustbelt Population Sags

2005-06-30T08:44:00.000-07:00

According to new census estimates, almost every large city in the Rustbelt is losing population.

Much of this results from people moving to the second and third ring suburbs, but evidence mounts that migration to the south and west is going to de-populate the Rustbelt states over the next three decades.

Just as bad, the average age is rising in the Rustbelt states, boding ill for productivity and economic growth. In many states, the cost of elder care may crush the economies.

Michigan In Crisis

2005-06-16T08:00:00.000-07:00

The jobs news just gets worse.

http://www.detnews.com/2005/business/0506/16/A01-217883.htm

GM Struggles on

2005-06-07T16:30:00.000-07:00

Continuing a strategy of "always being ten years behind the Japanese," GM is taking action to close plants that should have been closed ten years ago (and taking three years to do it).

More jobs down the rat hole.

Good reporting.....

http://www.detnews.com/2005/autosinsider/0506/07/01-207090.htm

Michigan and Ohio Battle

2005-06-02T20:31:00.000-07:00

Michigan and Ohio are locked in a battle to have the worst economy in the country.

So far, Michigan is slightly ahead in the worst economy race.

Ohio, on the other hand, is way ahead in the worst Governor race.

Not only is Bob Taft clueless, now he is distracted by the bizarre "Coin-gate" scandal.

Ohio, which is totally controlled by the GOP, as least has a chance of passing tax reform. The reform is gradual, timid, tepid and ten years too late, but it is reform.

Go West, Young Entrepreneur!

2005-05-31T05:34:00.000-07:00

Want to start a small business? Apparently the Rustbelt is not the place to be, as featured in the Detroit News.

http://www.detnews.com/2005/business/0505/31/A01-198579.htm

Retiree Health Benefits Crush Michigan

2005-05-24T08:27:00.000-07:00

In the 60s, 70s and 80s both businesses and local government units promised lavish retirement health care benefits to workers.

Unlike pensions, few of these benefits were funded, but were left for future revenue streams and future taxpayers.

The benefits promised auto workers are getting wide publicity, but similar benefits were promised to thousands of government employees.

The cash flow has dried up, and now it is a struggle to make ends meet. Governments are cutting services.

Meanwhile, Hyundai just opened a state-of-the-art auto plant - in Alabama.

See the Detroit News, May 24 2005 for futher information.

Ohio Fumbles Toward Reform

2005-05-22T14:39:00.000-07:00

Ohio is betting its' economic future on tax reform.

Ohio's system is out-of-date, riddled with loopholes, and worse yet, punishes manufacturing and punishes investment.

Problem is, Ohio has a spending addiction, so the transition will be ugly.

Governor Taft's plan passed the Ohio House more or less intact, and is now being worked over in the Senate.

Perhaps it is a good sign, but almost everybody seems unhappy about the plan.

The governor hired a consulting firm (there goes more money) and the results indicate Ohio might be able to create 44,000 jobs in the next five years. The majority of the jobs will be low-value retail and service jobs.

Trouble is, Ohio needs to create more than 200,000 quality jobs just to get back to Y2000 status.

Ohio's Dilemma - UPDATED!!!

2005-02-06T11:35:00.000-08:00

Need #1: Ohio needs to raise $5 billion dollars to balance the fiscal 2005-2007 state budget. This will require tax increases (euphemisitically called "broadening the tax base").

Need #2: Ohio needs to cut taxes and reform the tax system to stem the tide of job losses. Ohio is bleeding manufacturing jobs due to the "more trade at all costs" policy of the federal government.

The two needs are alsolutely incompatible. This is the price of procrastination and poor leadership.

Prediction: Ohio will continue to raise taxes and will continue to lose jobs, which will require more tax increases in the 2007 - 2009 fiscal budget.

This is called a "death spiral."

UPDATE!!!

After six years in office, Governor Taft has finally made a decision!!!

The Governor is going with Need #2, and taking the difference from the poor and the elderly.
At least he did something.

The Ohio General Assembly may not agree.

Stay tuned!!

State of the State - Western Pennsylvania

2005-02-02T19:30:00.000-08:00

Not much cause for optimism here.

http://www.pittsburghlive.com/x/tribune-review/business/s_292609.html

Several sports stories have mentioned that the Pittsburgh Steelers (Go Steelers!) have fans all over the country. Why? Job losses In the Pittsburgh area.

Three years after the end of the recession and the Rustbelt is still getting clobbered.

Michigan Continues to Suffer

2005-02-02T19:17:00.000-08:00

Michigan continues to struggle with job losses, Detroit appears headed for receivership, and the state budget is nowhere near balanced.

Governor Jennifer Granholm, after two years of "studying the problem," is now proposing sweeping changes to the state’s tax system.

The Single Business Tax, passed three decades ago when Michigan’s economy was invincible, is a tax that now punishes job creation and high levels of employment, which is bizarre considering Michigan’s needs.

How to reform taxes while maintaining state services is a common dilemma these days.

Some readings............

http://www.detnews.com/2005/editorial/0501/30/A08-72596.htm

http://www.detnews.com/2005/editorial/0501/30/A08-72574.htm

http://www.detnews.com/2005/business/0501/30/C01-73874.htm

State of the State - Ohio New Years

2005-02-02T19:00:00.000-08:00

Excellent journalism on the challenges facing Ohio politicians.

This is what happens after ten years of procrastination - crunch time.

http://news.enquirer.com/apps/pbcs.dll/article?AID=2004412270339

Jobs - good news and bad news.

http://www.mansfieldnewsjournal.com/news/stories/20050101/localnews/1814152.html

An on-the-mark editorial about Ohio's leadership crisis.

http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20050102/OPINION02/50102021

State of the Cities

2005-01-10T16:30:00.000-08:00

What is happening to Rustbelt Cities? A few examples:

Pittsburgh - in a form of state financial receivership

Cleveland - deteriorating, considering casino gambling

Cincinnati - cannot staff all of its' fire stations

Detroit - death spiral, much of it self-induced (already has casino gambling)

Toledo - death spiral, but could pull out

Columbus - fabled bustling downtown fading fast

Give some blame to dumb politics and public employee unions, but give a healthy dose of blame to the feds.

How do we reverse this?

U.S. Trade Policy Explained

2005-01-10T15:00:00.000-08:00

We have finally figured out U.S. trade policy (with apologies to Ross Perot, who was ahead of most of us).

Presidents Bush (41), Clinton and Bush (43) all misled the American people by failing to tell us the whole story, and now we are suffering.

So what is U.S. trade policy?

1. promote the sacrifice of millions of American non-technological manufacturing jobs, which has

2. let consumers enjoy lower prices, and

3. let corporations enjoy higher profits, and supposedly

4. corporations would invest highger profits to make the U.S. a high tech utopia for workers.

Oops. #4 didn't work. Three our of four is killing the Rustbelt.

U. S. corporations have invested in bizarre levels of executive compensation, the largest fraud bubble in history, and outsourcing more U.S. jobs.

The U.S. government has done almost nothing for displaced workers. The Bush administration could care less.

Most state government in the Rustbelt have been paralyzed, and conintue to deteriorate.

We need a new plan. Comments?

Welcome to the Rustbelt

2005-01-10T14:54:00.000-08:00

Welcome to the Rustbelt!

Stretching from western New York across to Wisconisn and Minnesota (by most definitions), this was once the industrial heartland not only of America but also the world.

Western Pennsylvania, Ohio, and Michigan are the heart of this heartland.

The Rustbelt has fallen on hard times, as modernization and the Clinton/Bush trade-at-any-costs policies have cut huge swaths through the American industrial sector, shutting plants and killing jobs.

NAFTA has proven to be the death knell for many Rustbelt communities. State governments are paralyzed and the Bush administration forgot us as soon as the election was over.

THE PURPOSE OF THIS BLOG IS TO FOSTER DISCUSSION AND DEVELOP IDEAS.

We want to look at the causes and possible solutions to Rustbelt woes. We will be blunt, some of the Rustbelt problems are self-inflicted, and the problems will only be solved with some real leadership.

Welcome, and please give us your comments.

Tom Ealey
Findlay, Ohio