Tuesday, May 29, 2007

A “Way Forward” for Michigan?

Excellent article by Jack McHugh of Mackinac Center for Public Policy http://www.mackinac.org/article.aspx?ID=8533

A “Way Forward” for Michigan?

Like its biggest employers, the State of Michigan is at a turning point. The Big Three automakers know they face an "existential" crisis and the old ways mean bankruptcy and liquidation. They’ve placed "everything on the table" and are making big changes, but it’s still touch and go.

The state is in as much trouble, but only recently have some in Lansing begun to appreciate the level of restructuring and reform needed to turn things around. As with Big Three managers in recent years, many in state government are in denial, while others just want to patch it together long enough to get out with their pensions — or win their next election.

The problems of Michigan and the Big Three have the same roots. Simply, they got fat, dumb and happy in an era of little competition. The responses of late have been different, though. The automakers know that without real change they’ll soon be out of business. Unfortunately, state government is insulated by getting its revenue the old fashioned way — coercion. Car makers can’t force buyers, but the state can raise taxes, and those who don’t pay go to jail.

Or, they can vote with their feet, a path chosen by increasing numbers, as shown by outbound migration trends documented in moving company reports.

The call for a large tax increase by some in Lansing is really about postponing fundamental restructuring. Without reform Michigan won’t be liquidated like a failed private company. Instead, the ongoing declines in employment, home values, personal income and population will continue, and probably accelerate. Unreformed school and government establishments will keep feeding off a declining population and shrinking economy, extracting ever greater proportions of dwindling resources.

As the city of Detroit demonstrates, this can go on for a long time. The notion that "when things get bad enough they’ll get their act together," be it city hall or the capitol, is not a source of optimism, because things can get really bad.

The automakers faced two specific challenges: Mediocre products and employee compensation levels divorced from productivity. Likewise, the state’s "mediocre product" is excessive regulations, arrogant and unresponsive bureaucracies and antediluvian labor laws. Not unlike the "entitlement" mentality that infected some autoworkers, many in Lansing have a toxic attitude that the private sector exists to serve the government, and not the other way around.

"Excessive costs" for the state are the fact that Michigan pays too much for the government we get. The average state employee receives a salary and benefits package worth nearly $75,000, while the comparable private sector figure is approximately $58,000. "Journey" level Michigan prison guards earn $43,785 on average, compared to $33,531 nationwide. School employee retirement benefits will absorb 30 percent of education payrolls by 2020.

All this in a state where per-capita personal income is actually falling, and is now 6 percent below the national average — its lowest since the Great Depression.

The old ways no longer work in Michigan any more than they do for the Big Three, and the depressing trends won’t turn around by themselves. Those demanding higher taxes and more "investing" in government are equivalent to "no concession" auto union hardliners. Just "balancing" the bloated $42 billion budget with marginal cuts won’t turn things around either

Here’s what would turn things around:

Government and school establishments at all levels massively scaled back and privatized, their pension and health benefits renegotiated from top to bottom. If constitutional amendments are needed to permit reasonable "haircuts" for current beneficiaries, so be it.

Current environmental laws repealed and replaced with ones that pull back rulemaking authority from unaccountable bureaucrats and return it to elected legislators, with standards no more stringent than federal ones.

A Right-to-Work law and the repeal of industrial-era dinosaurs like prevailing wage statutes that pad the costs of public construction projects.

The state "economic development" industry — MEDC, "Automation Alley," "Technology Tri-Corridors, "Incubators," etc. — consigned to the ash heap of history’s other intrinsically fatal central planning conceits, including Lenin’s "Five-Year" plans, Mao’s "Great Leap Forward" and "Japan, Inc."

These things will happen. We can do them now and start rebuilding right away, or let the decline continue for a few more generations, doing them only when those vested in the status quo have died and millions of others have moved out. No natural law requires Michigan to succeed or fail as a state. It’s all up to us.


Jack McHugh is a legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited

Sunday, May 27, 2007

In Memory Of Those Who Gave All

In Flanders Fields

Lieutenant Colonel John McCrae, MD (1872-1918) Canadian Army

IN FLANDERS FIELDS the poppies blow
Between the crosses row on row,
That mark our place; and in the sky

The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead.
Short days ago
We lived, felt dawn, saw sunset glow,

Loved and were loved,
and now we lie In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.

If ye break faith with us who die
We shall not sleep,
though poppies grow In Flanders fields.

They went with songs to the battle, they were young,
Straight of limb, true of eye, steady and aglow.

They were staunch to the end against odds uncounted,
They fell with their faces to the foe.

They shall grow not old, as we that are left grow old;
Age shall not weary them, nor the years condemn.
At the going down of the sun and in the morning

We will remember them.

For the Fallen by Laurence Binyon

Wednesday, May 23, 2007

Roll Call on "Shamnesty" Bill

U.S. Senate Roll Call Votes 109th Congress - 2nd Session
as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate

Vote Summary
Question: On Passage of the Bill (S. 2611 As Amended )
Vote Number:
Vote Date:
May 25, 2006, 05:39 PM
Required For Majority:
Vote Result:
Bill Passed
Measure Number:
S. 2611
Measure Title:
A bill to provide for comprehensive immigration reform and for other purposes.

Vote Counts:


Not Voting
Grouped by Home State
Sessions (R-AL), Nay
Shelby (R-AL), Nay
Murkowski (R-AK), Yea
Stevens (R-AK), Yea
Kyl (R-AZ), Nay
McCain (R-AZ), Yea
Lincoln (D-AR), Yea
Pryor (D-AR), Yea
Boxer (D-CA), Yea
Feinstein (D-CA), Yea
Allard (R-CO), Nay
Salazar (D-CO), Not Voting
Dodd (D-CT), Yea
Lieberman (D-CT), Yea
Biden (D-DE), Yea
Carper (D-DE), Yea
Martinez (R-FL), Yea
Nelson (D-FL), Yea
Chambliss (R-GA), Nay
Isakson (R-GA), Nay
Akaka (D-HI), Yea
Inouye (D-HI), Yea
Craig (R-ID), Yea
Crapo (R-ID), Nay
Durbin (D-IL), Yea
Obama (D-IL), Yea
Bayh (D-IN), Yea
Lugar (R-IN), Yea
Grassley (R-IA), Nay
Harkin (D-IA), Yea
Brownback (R-KS), Yea
Roberts (R-KS), Nay
Bunning (R-KY), Nay
McConnell (R-KY), Yea
Landrieu (D-LA), Yea
Vitter (R-LA), Nay
Collins (R-ME), Yea
Snowe (R-ME), Yea
Mikulski (D-MD), Yea
Sarbanes (D-MD), Yea
Kennedy (D-MA), Yea
Kerry (D-MA), Yea
Levin (D-MI), Yea
Stabenow (D-MI), Nay
Coleman (R-MN), Yea
Dayton (D-MN), Yea
Cochran (R-MS), Nay
Lott (R-MS), Nay
Bond (R-MO), Nay
Talent (R-MO), Nay
Baucus (D-MT), Yea
Burns (R-MT), Nay
Hagel (R-NE), Yea
Nelson (D-NE), Nay
Ensign (R-NV), Nay
Reid (D-NV), Yea
New Hampshire:
Gregg (R-NH), Yea
Sununu (R-NH), Nay
New Jersey:
Lautenberg (D-NJ), Yea
Menendez (D-NJ), Yea
New Mexico:
Bingaman (D-NM), Yea
Domenici (R-NM), Yea
New York:
Clinton (D-NY), Yea
Schumer (D-NY), Yea
North Carolina:
Burr (R-NC), Nay
Dole (R-NC), Nay
North Dakota:
Conrad (D-ND), Yea
Dorgan (D-ND), Nay
DeWine (R-OH), Yea
Voinovich (R-OH), Yea
Coburn (R-OK), Nay
Inhofe (R-OK), Nay
Smith (R-OR), Yea
Wyden (D-OR), Yea
Santorum (R-PA), Nay
Specter (R-PA), Yea
Rhode Island:
Chafee (R-RI), Yea
Reed (D-RI), Yea
South Carolina:
DeMint (R-SC), Nay
Graham (R-SC), Yea
South Dakota:
Johnson (D-SD), Yea
Thune (R-SD), Nay
Alexander (R-TN), Nay
Frist (R-TN), Yea
Cornyn (R-TX), Nay
Hutchison (R-TX), Nay
Bennett (R-UT), Yea
Hatch (R-UT), Nay
Jeffords (I-VT), Yea
Leahy (D-VT), Yea
Allen (R-VA), Nay
Warner (R-VA), Yea
Cantwell (D-WA), Yea
Murray (D-WA), Yea
West Virginia:
Byrd (D-WV), Nay
Rockefeller (D-WV), Not Voting

Tuesday, May 22, 2007

URGENT CALL TO ACTION: Republicans violating principles? Not if we can help it!

This post is taken directly from http://www.rightmichigan.com/

By Nick, Section News
Posted on Tue May 22, 2007
at 01:18:53 PM EST

Things are moving fast in Lansing right now folks with all sorts of discussion and conversation.

I understand State Senator Valde Garcia is being courted heavily right now by the Governor and her staff. They're trying to get him to go along to get along and hoping he'll forget who he works for in his zeal to cut a deal.

Please email and call Senator Garcia right away:

Email: SenVGarcia@senate.michigan.gov Office: 517-373-2420

Tell him to vote NO on new taxes and yes on Michigan's future. Tell him to support real substantive reform and that Lansing has a spending problem, not a taxing problem.
Tell him to remember his conservative principles and not to sell out

By Nick, Section News
Posted on Tue May 22, 2007
at 09:02:41 AM EST

As the House Democrats marshal their forces and muster their courage to pass a massive tax increase in the coming days it's more important than ever that the blogosphere, frequent campaign volunteers, activists and the grassroots community at large do our part to make sure common sense carries the day and that folks who won election as fiscal conservatives understand a vote to raise taxes is a vote against Michigan. And that we won't stand for it.

Our Representatives are getting it from all sides right now. The Governor is calling them in for private meetings to try to buy them off. The MEA has teachers, school board members and administrators calling them daily swearing on their students lives that the sky is falling. Public employee unions and local government officials are throwing mud and calling them names.

But most are standing firm. Most are standing up for their principles and saying, no, Michigan has a spending problem, not a taxing problem. I won election by campaigning against wasteful spending and I won't raise taxes to protect the status quo.

Still, in a chamber as large as the Michigan House there are always a few who need an extra little push to remind them where they came from and what they were sent to Lansing to do. The urge to appease the enemy can be powerful sometimes but we can't stand for it. Period.

That's where YOU come in... today!

Below you will find the text of an email I sent to a few state Reps who might need a little encouragement these days. A few state Reps who the Governor is lobbying hard. A few state Reps who need to remember what got them elected and that a flip flop simply can't happen.

The Democrats have the votes to raise taxes in the House. If they want to raise them, they'll raise them. The sad truth is that for every Republican who votes against his principles, who takes the bribe, who panders to the teachers unions... not only does it set the state back, not only does it put Lansing over Yourtown, not only does it put a union hack's exorbitant salary over yours but quite frankly, it undermines Republican brand ID and gives one of the vulnerable Democrats a free pass in next years election.

We simply can't have that.

Will you help send the message?
Will you help remind so-called "fiscal conservative" Republicans that you won't stand for tax increases but more, that you won't stand for your elected officials violating their principles, saying one thing during an election and doing another once they win? We get enough of that out of Jennifer Granholm these days.

So wherever you are, whatever part of the state you're in please do this RIGHT NOW:
1) Fire off an email. Tell each of these Reps that you won't stand for a vote to raise taxes and remind them what's at stake.
2) Call each of them. Pick up the phone. Let them hear from you in person.

Please do both.
No matter where you live.
We'll make it easy and go with two members a day. An email and a phone call to each shouldn't take but ten minutes total. No matter how busy we are, we can all make ten minutes. No excuses. Michigan's future may very well depend on what you do today.
Then let us know how it goes!

Update [2007-5-22 9:46:48 by Nick]:
The buzz around Lansing is that a couple of our Republican friends might even be working behind closed doors with the Governor to grab other GOP votes to raise taxes. One's angling for a position as a lobbyist and the other, I'm told, thinks the governor might help him win a primary race for the state Senate in four years... The Representatives who need "friendly" reminders today are:

Representative Ed Gaffney(District 1, Wayne County)Email: edwardgaffney@house.mi.govOffice: 517-373-0154

Representative Mike Nofs(District 62, Calhoun County)Email: mikenofs@house.mi.govOffice: 517-373-0555

Thursday, May 17, 2007

The Game Changes

Autos May 17, 2007,

A Deal that Could Save Detroit http://www.businessweek.com/autos/content/may2007/bw20070516_345880.htm
Handing the UAW a chunk of long-term health-care liabilities is a radical plan but may be the one that works

by David Welch and Nanette Byrnes

Just a few weeks ago, United Auto Workers President Ron Gettelfinger had nothing but contempt for the "strip-and-flip" private equity investors bidding for Chrysler Group DCX. So most people expected him to come out slugging when Cerberus Capital Management agreed to buy the struggling automaker on May 14. Instead, Gettelfinger embraced Chrysler's new owner. "The status quo is off the table," he declared.

Attitudes are evolving rapidly in Detroit these days, and it is clear that the arrival of the bare-knuckle financial wizards from Cerberus is only going to hasten the pace of change in town. Managers and UAW leaders alike appear to accept that a time of reckoning is at hand. As they look ahead to landmark labor talks this summer, both sides finally appear set to face up to the most vexing problem of all: unsustainably high health-care costs. Thanks to luxe benefits handed over during the golden age of corporate largesse in the 1950s, the Big Three will have an estimated $120 billion in long-term medical liabilities, a crippling burden that puts them at a nearly insurmountable disadvantage to global rivals.

But General Motors (GM), Ford Motor (F), and Chrysler's new owners at Cerberus believe they may have a cure for Detroit's epic health-care woes. Their idea: to propose handing over the companies' long-term liability to an independent fund managed by the UAW, which would be financed by a huge one-time injection of cash and stock. Union workers would probably contribute more toward their own coverage costs but would gain protection from the devastating prospect of bankruptcy.

The automakers, meanwhile, would wall off a risk that terrifies investors—and earn perhaps their final shot at becoming competitive again. "I think an independent health-care fund has to happen," says Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. "Ron Gettelfinger may even be resigned to doing it." Big Costs, Big Hopes

This radical idea already has some precedent in Detroit. In 2005 GM and the UAW created a so-called voluntary employee benefits association (VEBA) trust, for a small portion of the company's retiree health-care expenses. The union has also consented to VEBA funds for individual plants belonging to a few parts suppliers. Over the past few months, managers at all three car manufacturers have been closely studying a similar deal struck between the United Steelworkers and Goodyear Tire & Rubber (GT) in December that relieved the tiremaker from most of its medical obligations without stiffing union workers.

While the Big Three have not been trumpeting the VEBA trust plan, expect to hear more about it as this summer's labor talks approach. Creating such a trust "for the whole industry [is the] primary objective of this year's round of bargaining," says one investment banker well-connected in Detroit. "That's clearly what the Big Three want."

To see why Motown executives are so excited, take a look at how GM would benefit from such a trust. The company has UAW health-care liabilities of $52 billion, not including $18 billion for white-collar workers, according to JPMorgan Chase (JPM) analyst Himanshu Patel. The company's first step would be to reduce its liability by asking current and former workers to fork over more for their own health coverage. Then GM would set up a trust fund. Because it would be invested to grow over time, the fund could be valued at, say, 60% of the liabilities, around $31 billion. That may sound risky for the union, but there are risks on both sides of the equation. Unlike pensions, retiree medical benefits are not guaranteed by law and would not be protected in a bankruptcy, a big worry with the U.S. car companies floundering.

How in the world would GM come up with so much money? The company could start with the $15 billion in VEBA money already set aside in some existing trusts. Patel thinks GM could then afford to take a further $8.2 billion in cash from its coffers and sales of some assets, plug in some equity, and borrow about $5 billion. Add it up, Patel contends, and GM could fund all of its union health-care obligations.

Quick Bounce
Setting up the fund would add debt and drain cash, but it would yield big benefits immediately. Patel estimates that such a deal would boost pretax profits by $900 million in the first year and save GM about $700 million in cash. Accounting for inflation, GM's health-care expenses would drop by about $200 million a year and cash flow would improve by $400 million a year. Ford's health-care expense would drop by $800 million the first year and cash flow would improve by $200 million. Patel thinks the growing improvement to cash flow would help the Big Three narrow the gap with Toyota (TM) on product and research and development spending. Right now Toyota dedicates almost 12% of its revenue to capital expenditures and R&D. GM spends just 8.4% of its revenue.

If it all sounds too good to be true, it may very well be. The devil will be in the plan's infinite details. The companies' ability to fund a big trust, first of all, depends upon how much money the UAW requests. If the union seeks assets totaling 80% of liabilities, then GM and Ford may not be able to afford it. Since GM already borrowed $18 billion in 2003 to shore up its pension fund and Ford borrowed $23.5 billion this year for restructuring, neither wants to shoulder much more long-term debt. Both have junk debt ratings, so the money would be quite expensive.

At some point, a judge would also have to sign off on a global Big Three trust, because Ford and GM face a legal impediment. When the union gave them concessions on health care last year, a lawsuit was filed to freeze retiree benefits. The courts upheld the deal, but froze the new benefits package until 2011. GM Chairman and CEO G. Richard Wagoner Jr. said in a December interview that further concessions made on behalf of those retirees would need court approval. The same goes for Ford—but not Chrysler, which never won the same health-care concessions as its rivals
"The Game Changes"
Nothing in the court order prevents the two companies from setting up a fund to cover new retirees, of course. McAlinden says that the 34,000 GM workers who took retirement as part of the company's recent restructuring could be covered by a new independent VEBA if UAW leaders consented to such a deal. Then, GM and Ford could set up a fund to cover the rest of their retirees beginning after 2011. McAlinden estimates that 80% of the long-term liabilities will be incurred after that date.

The diverging legal and business dynamics at the three companies make a big trust covering benefits at each one difficult to establish. But it is unlikely the UAW would allow one or two of the companies to establish a separate trust to wall off health-care liabilities, even though such a scenario is theoretically possible. That would violate a longstanding union policy against giving any particular member of the Big Three a substantial cost advantage over the other two.

If giant independent trusts get established for all of the auto companies, one far-reaching implication of the move is that the UAW would become an enormous health-care provider. Another is that the union would be forced to manage benefits. That means if costs rise faster than investment returns, the union might have to offer weaker medical benefits to its own members. Right now, if health care gets more expensive, GM, Ford, and Chrysler just cut bigger checks. But it's possible the UAW may do just as well at managing the money as the companies do. Major union-run pension plans nationwide made nearly 14.6% returns last year, about half a point better than large corporate-run funds did, according to Wilshire Associates.

So there's reason to believe that the UAW, even though it will certainly negotiate aggressively, may be willing to go for the idea of a VEBA trust. Although the idea would have been a nonstarter in 2003, the last time the union contract was renegotiated, things have taken a powerful turn for the worse in the past few years. And the arrival of Cerberus may well increase Detroit's willingness to engage in complex financial engineering. "You bring in private equity, and the game changes," says Center for Automotive Research Chairman David E. Cole.

With Anthony Bianco in New YorkWelch is BusinessWeek's Detroit bureau chief, and Byrnes is a senior writer for BusinessWeek in New York

We are living in very interesting times. I have said all along that Gettlefinger's tough talk was just a show for Union kool aid drinkers as he does an about face in the wake of Chrysler's sale to the private equity group, Cerberus. He know where his bread is buttered. However its interesting because the worm would turn and the UAW would be sitting in management's seat if this health care deal goes through. I wonder how how they will spin reduced benefits to the membership after years of fighting to keep costly entitlements?

Stayed tuned, the UAW contract with GM will expire this September so there will be ground breaking announcements to come...

Saturday, May 12, 2007

Stay-at-home mom's work priceless

Stay-at-home mom’s work worth $138,095
Annual amount she’d earn as a housekeeper, cook and psychologist

NEW YORK - If the typical stay-at-home mother in the United States were paid for her work as a housekeeper, cook and psychologist among other roles, she would earn $138,095 a year, according to research released Wednesday.

This reflected a 3 percent raise from last year’s $134,121, according to Salary.com Inc , Waltham, Massachusetts-based compensation experts.
The 10 jobs listed as comprising a mother’s work were housekeeper, cook, day care center teacher, laundry machine operator, van driver, facilities manager, janitor, computer operator, chief executive officer and psychologist, it said.

The typical mother puts in a 92-hour work week, it said, working 40 hours at base pay and 52 hours overtime.

A mother who holds full-time job outside the home would earn an additional $85,939 for the work she does at home, Salary.com.

Last year she would have earned $85,876 for her at-home work, it said.
Salary.com compiled the online responses of 26,000 stay-at-home mothers and 14,000 mothers who also work outside the home.

My mom was a stay-at-home mom. Most were back then.
And I am grateful to have had a stay-at-home-mom

Some moms unfortunately must work but most choose to.

I wonder if a big house, 2 cars, new "stuff" compensates for not being there when your child takes his/her 1st step?

Or when a chubby toddler hand reaches out for comfort and security?

Or when a young child yearns to rest beside mommy for a mid day nap?

Or when a child gets a "boo-boo" and needs mommy, not a daycare worker to kiss away the pain?

I wonder if career compensates for all those lost moments?

I wonder when looking back after the children are grown, if the "by choice not need" working mom reflects about those lost moments?

I wonder if on our death bed, we will think of career, money, and all the material things we have owned or rather if we will think of people we have loved and shared our lives with.

I think nothing compares to having a chubby toddler hand on your cheek, or snuggling up to your child for a rainy day mid-afternoon nap or watching your child take their first step.

I think on my death bed I won't be thinking of jobs, promotions and material possessions but instead will be thinking of all the people I have loved and shared my life with, those long ago baby kisses, first steps,chubby hands and innocent uplifted faces to mommy....how about you?

Wednesday, May 9, 2007


In rebuttal to the reporter who asked a presidential candidate at a recent debate, "What do you dislike most about America?"

First off, I cannot imagine a question like that being asked a person who is running for the highest office in the land, leading our country.

Can you imagine John Kennedy being asked such a question? Or Reagan or Roosevelt?

However a Daniel Duchovnik from Walnut Creek, California, wanted to know: What do you dislike most about America?

This is an open invitation to post what we LOVE MOST America!

Listen up Daniel!

I love the beauty of America, "purple mountains majesty, above the fruited plains"

I love that I can get in my car and have the freedom to drive across my country without special papers or permission

I love the opportunities to have in America; you can be all you can be if you are willing to work hard for success

I love the variety of choice we have in America

I love that we have the freedom to worship where and what we want

I love that we have the freedom to criticize, protest, join and help reform our government

I love the wit, moxie, and generosity of Americans

I love and appreciate the abundant lifestyle in America

I love.... http://mybeautifulamerica.com/mybeautifulamerica.htm