Michigan’s staggering population losses continue.

Back in January of 2007 I wrote an entry titled Last person to leave Michigan please turn out the lights.

Things haven’t improved since then:

People are leaving Michigan at a staggering rate. About 109,000 more people left Michigan last year than moved in. It is one of the worst rates in the nation, quadruple the loss of just eight years ago. The state loses a family every 12 minutes, and the families who are leaving—young, well-educated high-income earners—are the people the state desperately needs to rebuild.

[…] Michigan’s exodus is one of the state’s best known but least understood problems. Long ignored or downplayed, outmigration has been shrugged off partly because it was assumed that those who were leaving were unemployed blue-collar workers and retirees, groups that, in economic terms, don’t cripple the state with their departure.

But a Detroit News analysis of U.S. Census Bureau and Internal Revenue Service data reveals that every day, Michigan gets less populated, less educated, and poorer because of outmigration.

The state’s net loss to outmigration—the number of people leaving the state minus those moving in from other states—has skyrocketed since 2001. Although the Census Bureau does not report totals moving in and out each year, Internal Revenue Service records show that the population decline is a result of two disturbing trends: The number of Michigan residents leaving the state rose 25 percent between 2001 and 2007, while the number of new residents moving in plummeted by nearly one-third.

Since 2001, migration has cost Michigan 465,000 people, the equivalent of the combined populations of Grand Rapids, Warren and Sterling Heights—the state’s second-, third- and fourth-largest cities.

I’ve said before that if I were as smart as a lot of folks seem to think I am that I would have packed up and moved years ago. Anne and I did spend some time discussing the possibility in 2005 during the period when I was laid off for the first time. I’m the reason we didn’t leave the state then and looking back on it that was probably a mistake. It’s probably an even bigger mistake to stay now, but this is my home. I love this state despite all its problems and the sucky economy. It’s totally irrational and it’s probably cost me quite a bit of money, but I still have a hard time thinking about leaving.

• Those leaving Michigan are the people the state most needs to keep—young and college-educated. The state suffered a net loss to migration of 18,000 adults with a bachelor’s degree or higher in 2007 alone—the equivalent of half the staff of the University of Michigan crossing the state line.

• Michiganians who fled the state in 2007 took with them almost $1.2 billion more in paychecks than the paychecks of those moving in. That represents a 45 percent increase in lost wages in just one year, money no longer spent in Michigan businesses, paying mortgages or paying taxes.

• The net loss of school-age children was more than 12,000 in 2007 alone, costing individual school districts roughly $84 million in state aid.

• With about 36,000 more households leaving the state than moving in, that leaves 36,000 empty houses and apartments, damaging already weak home values. “When there are more properties on the market, it drives down prices,” said Ron Walraven, a real estate agent in West Bloomfield. “With the layoffs and the buyouts at the auto companies, people are leaving. Some are just abandoning their homes.”

• People moving from state to state are disproportionately young. While almost 13 percent of Michigan’s population is over 65, only 2.5 percent of those leaving are that old. That means outmigration is adding to the costs associated with an aging population, such as the state’s share of Medicaid payments to retirement homes.

• There will be fewer tax dollars to pay for those services, maintain roads or run schools. According to Senate Fiscal Agency estimates, the income leaving the state cost Michigan more than $100 million in personal income tax revenue in 2007 alone.

I’m 41 years old and I still don’t have my college degree, though I am working on one. I don’t own a home yet. My daughter has graduated high school and is attending community college with me. I’m not as young as the other folks leaving Michigan, but I also don’t have as much holding me here so I could move if I could convince myself to do so. Every time I think about it I rationalize it back and forth. For example I tell myself that, without a college degree, it’s arguable if I’d be much better off someplace else over where I am now, but then I’m looking at a couple of years before I’ll even get my associates at the pace I’m taking classes currently so by the time I do have it it’s arguable if moving would still make sense.

Those with college educations were more likely to move than those without a degree. One-quarter of adults still in Michigan have at least a four-year college degree, compared to 39 percent of those who left.

In simplest terms, those with the skills to leave Michigan are doing so; high-skilled people from other states who once might have moved to Michigan are choosing to go elsewhere.

“Migration is good for the migrants but bad for the state they’re leaving,” said Mark Partridge, an economics professor at Ohio State University who specializes in the study of migration patterns. “It’s a vicious downward cycle; the best and brightest leave; entrepreneurs don’t come to the state because the best and brightest are elsewhere; as more people leave, that leaves fewer people to pay for services. Neither one will make Michigan a very appealing place.”

People who know me in real life often compliment me as being amazingly intelligent, but clearly I’m not as bright as I’d like to think I am. The funny part is that I’m quite well educated in how the human brain works in terms of rationalizing and wishful thinking and confirmation bias and yet, in spite of knowing all of that, I still fall victim to the same rationalizing and wishful thinking and confirmation bias as everyone else. I can even recognize the fact that I’m engaging in it and yet I still let it override my decision making process because I don’t want to move out of Michigan.

With all these other people going, I say to myself, I become that much more valuable to the companies that are still here. All the while ignoring the fact that the companies that are still here that I’ve traditionally worked for most of my career are on the verge of bankruptcy and begging the government for bailout funds. Granted I’m currently working for Big Dot.Com here in Ann Arbor which isn’t likely to go belly up anytime soon, but even they are eliminating 200 jobs to trim a little fat in these trying times. And before you ask, no, my job isn’t in danger of being eliminated in the fat cutting. Especially not since we went from three techs to two. The only threat to my current employment is the fact that I’m just about to hit my one year anniversary giving me one more year before my contract comes to a mandatory end. Still, I tell myself, I’m contributing to Michigan’s comeback by staying!

Yeah, right…

As bad as the outmigration numbers are now, Metzger worries they may get worse.

“The pattern used to be that people would move away from Michigan and then move back,” Metzger said. “Now, people are moving and then drawing the rest of their (extended) family with them.”

Gina Damuth’s husband, Fred Damuth, was laid off from Pfizer in 2007. Later that year, they moved from Farmington Hills to North Carolina.

Now, Gina Damuth has convinced her parents to move to North Carolina, too.

“I feel so bad for the people stuck in Michigan,” said Damuth, 34. “I was in the Detroit area recently and I didn’t realize the number of people who walk with their head down. You can see it if you pay attention—nobody smiles, everybody looks depressed. My dad says it’s scarier now. People are talking about how they don’t know if Michigan is going to recover this time.”

That recovery will be harder because of the people who have left, said University of Michigan economist Don Grimes. “You can’t grow your economy if you’re shrinking. You basically have an infrastructure built around a certain size of economy, and if you shrink below that scale, you have fewer people to support the infrastructure.”

That can mean higher taxes, poorer services or both.

Some of those costs won’t be felt for decades.

“When you lose people in their 20s, in five years, you won’t have their kids entering school; in 20 years, you won’t have their kids entering the work force,” Grimes said. “It puts you in a downward spiral.”

Indeed, demographers have said the sharp population losses from 1979 to 1983, when the state lost nearly a half-million people in four years, created an “echo dip” in the state’s population nearly two decades later. The current migration, which has seen similar total losses, has lasted twice as long.

I can see it right in front of me: Things are bad and they’re likely to only get worse. Michigan has the highest unemployment in the nation (11.6% in January compared to 7.9% nationally) and has held that status for years. We’ve lost the most jobs out of all the states between January 2007 and 2009 (-7.3% versus national average of -2.0%). Again, if I were as smart as I’m supposed to be, I’d have moved back before I wrote the first entry about Michigan’s population losses. If I were smart I’d use this entry as the motivation to finally make the move now.

But I probably won’t. I don’t want to move out of Michigan. I love this stupid state and I want to see it succeed. Call it misguided loyalty. Call it stupidity. I won’t deny it. I’ll probably still be here in another two two years when I write the next entry about Michigan’s continuing population decline.

This American Life: Bad Bank

Want to understand the whole banking crisis thing? Go listen to the most recent episode of This American Life:

The collapse of the banking system explained, in just 59 minutes. Our crack economics team—the guys who explained the mortgage crisis, Alex Blumberg and NPR’s Adam Davidson—are back to help all of us understand the news. For instance, when we talk about an insolvent bank, what does it actually mean, and why are we giving hundreds of billions of dollars to rich bankers who screwed up their own businesses? Also, two guys go to New Jersey to look at a toxic asset.

I’m far from being an economist, but this put it all into perspective for me. It also brought home just how fucked we are. This is going to hurt regardless of how it’s handled the only question will be how much will it hurt and that depends on how it’s handled. The idea that we, as taxpayers, will see the government recoup the money they’ve given the banks is probably a bit of false hope given out to make the bailouts more palatable. We’re going to end up paying either way.

The surprising bit is the fact that Americans, as a whole, are at least partially responsible for the mess. Sure the banks shouldn’t have been handing out some of the loans they have, but the truth is most of us have been living beyond our means for a long time now. Which is particularly frustrating to someone like myself who has been doing his best to live within his means for years and is still going to get hurt by the financial melt down.

A short news piece on “trash outs.”

I’d never heard the term before, but apparently it’s a service banks pay for to deal with all the stuff left behind when people vacate a foreclosed home. I’ve yet to own a home of my own and I’ve always managed to survive to the end of the lease on any of the apartments I’ve ever rented so I can’t imagine having to pack up and decide what to leave behind and what to take, but the amount of stuff left behind is amazing to me. Check the video:

The sad part is that a lot of that stuff is still in good shape and could be donated to charities, but the crews move so quickly that often times the charities can’t get their fast enough to pick the stuff up before it’s hauled to the dump. I saw a pretty nice dining table I could put to use being trashed in that clip.

Found over at Boing Boing.

Hollywood may set up shop in Michigan.

When I was younger I knew I wanted to be an actor when I grew up, but other than a small voice role in an anime dub, an impossible to see stint as an extra in Hoffa, and being cast as the lead in a community theater production of You’re A Good Man Charlie Brown that I had to drop out of due to work commitments, I’ve never actually achieved that youthful dream. A lot of that is because it would have required moving to either New York (for stage plays, which I’m not fond of) or to Los Angeles (where they have earthquakes and wildfires) and I’ve just never been motivated enough to do that. There’s enough theaters and such around Michigan that it’s possible to make something of a living as an actor locally as my brother-in-law has managed to do, but it’s nothing that’s likely to result in you hitting it big time. It probably doesn’t help that I’ve had absolutely zero training as an actor outside of a high school drama course I took 20 years ago. But perhaps that’ll change as more and more of Hollywood moves to Michigan. With stuff being produced locally there’s the chance that I could at least have some fun being an extra a couple more times.

And the chances of that are improving as things heat up in Michigan’s new film industry. Early last year our state legislators passed a bunch of laws and tax breaks designed to make Michigan much more attractive to film and television productions and it’s already worked quite well. There’s a whole bunch of movies filming in Michigan with more on the way and now word comes down that we may end up with some full fledged production studios too:

State film officials say they are on the verge of sealing an $80 million development deal that would create three film and television production studios in southeast Michigan, boosting one of the state’s few fast-growing industries.

Two of the potential locations for the permanent studios — including one in Detroit — haven’t been used in years, while the third site would have to be built. One of the facilities would be a multi-studio complex that would occupy up to 130 acres, state officials confirmed. Another facility would be geared toward post-production work, such as audio and editing.

The Detroit facility, if the deal is finalized, could be in operation by the end of the year.

[…] “It’s a game-changer,” said Anthony Wenson, CEO of the Michigan Film Office, the agency that promotes the local film industry. “We truly (will) have a year-round industry. We can see a television series shot here. We can provide space for filmmakers to build large-scale sets. We can greatly expand our offerings to the video and digital media community.”

The state film agency has been working on the deal for months and contends it would create the infrastructure to support what has become a $100 million industry in the nine months since Michigan passed the most aggressive film industry tax incentives in the nation.

That would be wonderful if it does grow that big as Michigan is in desperate need of a shot to its economy. Plus, who knows, maybe I’ll finally get a chance to live out that youthful dream.

Found via the Michigan Messenger.

 

Pity the rich for they are experiencing “Luxury Shame.”

It’s not easy being a multimillionaire in these tough economic times. Having all those whiny middle class and poor people crying about how they’re out of work or about to lose their homes just takes all the fun out of conspicuous consumption. It’s gotten so bad that Newsweek has a big article about it:

Multimillionaire Michael Hirtenstein used to flaunt his acquisitions of opulent real estate. “I collect homes because I enjoy it,” he once told DansHamptons.com about his eight properties—which included a $27 million apartment on the 76th floor of Manhattan’s Time Warner Center. In August 2007, the 45-year-old Hirtenstein, who made his fortune in telecommunications, regaled the New York Post with his plans for a $35 million, glass-enclosed duplex in Manhattan’s Tribeca neighborhood, replete with suede-covered walls, three living rooms and a heated pool with built-in underwater video screen. Alas, the economy ground to a halt, and so did Hirtenstein’s conspicuous consumption of real estate. He quietly reneged on the Tribeca duplex, forfeiting a hefty deposit. That isn’t to say Hirtenstein is now selling pencils from a tin cup. “I could walk downstairs now and buy a Ferrari,” he says from a suite at Wynn Las Vegas, which boasts a dealership. “But all of my friends are hurting. I don’t feel like buying random toys.”

Across America’s upper strata, rich folk like Hirtenstein are experiencing an unfamiliar emotion: luxury shame. The late Coco Chanel, doyenne of 20th century fashion, long ago said that luxury is “the opposite of vulgarity,” not of poverty. But in these recessionary times, it seems vulgar to flaunt one’s luxurious lifestyle. And so the wealthy are going blingless and eschewing the spending sprees of the recent Gilded Age, giving new meaning to the phrase “embarrassment of riches.”  The trend is horrible news for the $175-billion global luxury market, which is already absorbing the blows of plummeting personal wealth. Just in time for Christmas, this new “embarrassment of riches” is cutting into sales of high-end retailers and brands like Neiman Marcus and Saks Fifth Avenue, Bentley and BMW, Christie’s and Sotheby’s.

This is terrible and only further weakens an already weakened economy. Fortunately I have a solution:

The Les Jenkins Luxury Indulgences Plan

Are you embarrassed by the obscene amounts of money you can spend on a whim without affecting your net worth in any negative way? Has the troubled economy taken all the fun out of purchasing $500,000 sold gold toilets? Do you feel guilty for your ability to earn more in thirty seconds than some countries’ entire GDP in a year? I can help. My name is Les Jenkins and I’m offering you a Luxury Indulgence that will absolve you of all guilt associated with your ability to spend ridiculous amounts of money on things you would never need in your entire lifetime.

The process is simple: Send me $25,000 and I’ll send you an official Luxury Indulgence good for the guilt-free purchase of any non-essential item(s) up to $1 million in price. Send me $50,000 and the Indulgence will be good for up to $10 million of stuff you don’t need. Or for the low-low price of $100,000 I’ll send you an Indulgence good for purchases of any amount you feel like spending 100% guilt-free.

No longer do you need to feel ashamed for the massive wealth you’ve managed to acquire when everyone else around you is eating out of trash dumpsters. By purchasing my Luxury Indulgences you will not only be helping out one of the impoverished members of the middle class, but you’ll also be helping to stimulate the economy and bring about an end to the recession the country is currently enduring. Les Jenkins’ Luxury Indulgences are more than a way to regain that ability to spend freely without regard to the plight of others, it’s a patriotic way of helping your country return to its once dominate position as an economic powerhouse. It’s a win-win for everyone involved so send your check today!

There’s a few Christians out there that need to read their Bible more.

What’s (amusingly) wrong with the following picture:

It’s a bunch of Christians praying fervently to God in front of a statue of a bull for his (God’s) help in fixing the financial market. This was apparently the idea of a noted Christian “leader” by the name of Cindy Jacobs who’s been hearing the voice of God a lot lately and passes on his message in this article at the 700 Club:

In January of this year, Cindy Jacobs was in a worship service when the Lord spoke to her, “Cindy, the strongman over America doesn’t live in Washington, DC – the strongman lives in New York City! Call My people to pray for the economy.”

[…] The Lord further said, “October 29 was Black Tuesday, the day the stock market crashed, and Satan wants to do it again.” We must be proactive in prayer. At the beginning of the year many intercessors began to hear from the Lord that without divine intervention, a major shaking was coming to Wall Street. This would spread until there were food shortages. Some think that 2009 would be worse than 2008. Of course, it goes without saying that this would affect markets around the world.

Who knew God gave a shit about the stock market? All that talking by Jesus of giving away all your money to the poor and chasing off the money changers was just him pulling our leg. God DOES care about money (which explains why the clergy are always asking you for it on his behalf) and he’s willing to help so long as we’re willing to pray to him asking for it:

“We are going to intercede at the site of the statue of the bull on Wall Street to ask God to begin a shift from the bull and bear markets to what we feel will be the ‘Lion’s Market,’ or God’s control over the economic systems,” she said.  “While we do not have the full revelation of all this will entail, we do know that without intercession, economies will crumble.”

Wait a minute… wasn’t there something in the Bible about a golden calf and Moses and God not being too happy about it? Yes, yes there was. Granted those ancient Jews were praying to the statue itself and not to God while laying hands on the statue like they did in New York, but still that’s gotta be an annoying thing to be reminded of. It also seems somewhat against the message of Jesus to be begging God for money. Not that God can’t afford it seeing as he’s got all these suckers followers giving him money all the time. I guess it all depends on how you interpret the whole “ask and God shall provide” idea. I realize I’m no religious authority, but it seems to me that this particular venue was an awkward choice.

Deal News.com - Black Friday is no longer a day, it’s a season.

Even though I rarely have extra cash laying around these days I still make a habit of keeping up with various websites such as Deal News.com which specialize in finding and promoting deals (natch). In addition to finding literally hundreds of deals every day they occasionally have an article about shopping such as the following discussing how Black Friday is expanding:

Black Friday Is No Longer a Day, It’s a Season

When most people think of Black Friday, they think of the day after Thanksgiving. But the fact is, over the past several years, the idea of “Black Friday” has been expanding.

In previous years, Black Friday had become a two-day event, since many Black Friday sales are available online on Thanksgiving Day. Last year, however, Wal-Mart upped the ante with its “Secret Sale” promotion. That sale started exactly three weeks before Black Friday. It featured a high-definition DVD player (HD-DVD) for $99, Acer laptop for $348, and 50” plasma TV for $999, prices that are still aggressive a year later. Not surprisingly, Wal-Mart received millions of dollars worth of free PR for its “Secret Sale” (a misnomer if ever there was one). Importantly, Best Buy beat Wal-Mart’s price on the HD-DVD player that day, showing a willingness to compete with its own loss leader and getting its own free PR.

Wal-Mart’s goal was to extend the halo from Black Friday into multiple high-buzz sales events throughout November. You’re likely to see the same game plan this year from Wal-Mart, which enters this holiday season much healthier than its competitors. And where Wal-Mart goes, Best Buy, Target, and the others must follow. It’s a live-or-die holiday season for many stores this year. Retailers can’t ignore the power of huge, “Black Friday”-like sales events on the run up to Thanksgiving.

And if a retailer is thinking about not competing, it had better think twice. Four years ago, Wal-Mart skipped Black Friday entirely, with no major ad push and no “doorbusters.” The result was the worst after-Thanksgiving sales weekend for Wal-Mart in years. Retailers who don’t want to compete with Wal-Mart by expanding Black Friday into a month-long event run the risk of having bad sales for an entire month, a death knell for most.

The article goes on to talk about how a lot of stores have to borrow in order to purchase their merchandise and then hope they make enough off the sales to pay off the loan and turn a profit, but with the current credit crunch, thanks to the assholes on Wall Street, that business model is a very difficult one to maintain. Banks are being very stingy with credit and the fact that the banks know consumers are cutting back on unnecessary purchases makes them even less open to giving out credit to retailers. Combine that with the fact that many retailers are struggling and things could get bloody:

Every year, a few struggling retailers file for bankruptcy (or go out of business entirely) after Christmas. It’s a normal cycle. However, that’s changing. Last season, CompUSA started liquidating its stores in early December, and it was completely gone by January. (The new CompUSA is now run by TigerDirect.)

This year, things have gotten worse. Linens ‘n Things is already bankrupt. It’s liquidating its stock online and in stores before closing shop. Circuit City is trying to avert bankruptcy by closing over 100 stores and laying off thousands of employees. Mervyns is closing all 175 stores. JC Penney is in trouble. Sears is closing yet more stores. And it’s just October.

Make no mistake: Thousands of jobs are at stake, and so many stores going out of business is bad over the long-term. But in the short term, these stores must liquidate their inventory. Consumers benefit from liquidation sales. Plus, you’ll soon see more closeouts at stores like Buy.com, Woot, Fry’s Electronics, TigerDirect, and others that resell distressed inventory.

Which means, ironically enough, there’s some excellent deals about to come down the pike. Deal News.com is estimating that the deals we’ll see this season will be the best since the days of the first dot.com bubble (2001):

It’s a perfect storm: Consumers have cut back spending. Stores must slash prices to drive traffic to their stores. Competition and reduced margins will drive struggling stores into bankruptcy. The credit crisis will hammer bankrupt stores, forcing them to auction off their inventory to those liquidators that still have access to cash. And finally, a $2,000 HDTV pops up on Buy.com for $1,199.

I knew I should’ve held off on buying a new LCD TV until the fall. Of course that’d have meant no TV or movie watching for three or so months so I suppose it works out in the wash.

If you’ve got any spare money this year, assuming you’re not in the same boat I am, then it’s going to be a great time to shop. If you’re a retailer, though, then things are going to be very rough.