An article on Detroit that is worth the read

Detroit had filed for bankruptcy protection a while ago. The rationale for this was simple, they simply did not have the cash flow to pay for all their liabilities. They had limited access to debt markets for a number of reasons, and they couldn’t keep cranking up the taxes on residents and businesses in the … Read moreAn article on Detroit that is worth the read

Part of the reason why Detroit has a long rough road ahead

is due, in significant part, to bad law and bad policy enshrined in law. Ideological view points are hard coded in the firmware of Michigan. Which allows lawsuits and results such as this. It cannot be overemphasized how bone-headed this particular law is. That one can never, under any circumstances, reduce pensioner benefit values. This … Read morePart of the reason why Detroit has a long rough road ahead

… and bang goes Detroit …

This brings me no joy. I went to grad school in Detroit. I like this city. It has character, it has guts, it has potential.
It also has no cash to continue operations. And that sucks.
Detroit filed for chapter 9 bankruptcy a few hours ago.
There are many reasons for this, but there are a number of specific ones, that are generalizable to businesses as well.
First, population decline has led to a tax revenue decline. Detroit is no longer a large US city. Population is hovering just over 700k people, and dropping rapidly. Fewer people means smaller tax base. One may argue about the collection efficiency (low) and other issues, but the point is that to collect a fixed/growing tax revenue amount from a smaller group of people means you raise their tax rates. Detroit has not been in a position to absorb tax rate increases in several decades.

Read more… and bang goes Detroit …

Do we really have enough native STEM workers in the US?

Yes, actually we do. Too many.
Turns out that little law of supply and demand does in fact hold true. The higher the demand for something in limited supply, the higher the price (wages) you will pay for it.
By applying forces to this law, you impact a number of outcomes. That is, if you start monkeying around with the supply, sure, you can adjust the price you pay for the STEM. And, you get a whole host of other, well, I’ll call them unintended outcomes, by doing so.

Read moreDo we really have enough native STEM workers in the US?

Will the US default soon?

Quite possibly. We have a toxic mixture of overspending, insufficient revenue to cover the spending, and a borrowing limit. Several ideas have been floated over the last few weeks, including minting a $1T USD coin and depositing in the federal reserve. Thats $1012 USD folks. This is sort of like quantitative easing, aka printing more … Read moreWill the US default soon?

Interesting post on macroeconomic trends, risk, investment, and farms

Saw this linked on from zerohedge. Understand that, to a degree, this is a sales pitch for this persons’ new fund. But the reasoning behind doing what they are doing is fascinating to me. Along with a description of what happened to the global financial markets. Definitely worth the view just for the history and … Read moreInteresting post on macroeconomic trends, risk, investment, and farms

Interesting and depressing article on Michigan's future

A few prefaces …
First, I disagree with the premise throughout this article that our governor is timid. He is, IMO, and in many people’s opinion, doing a great job. Governor Romney is very similar to Governor Snyder in many ways. Timidity really isn’t apparent.
I guess that people see someone making a cost-benefit analysis for engaging in a particular debate, or pushing for a particular outcome, and deciding to forgo a particular fight, as being timid. I disagree. You fight the battles that are meaningful, and the battles you can win. You don’t aim for a bridge to far at the outset. Because if you do aim for that bridge to far, you’ll expend far to much political capital needed to accomplish your goals. Accomplish the goals, and then push.
Second, I don’t disagree with the authors characterization of the proposals in front of us here. This is pretty accurate.
And if they pass in toto or in significant part, business will probably start exiting the state enmasse. Worth considering if you are in Michigan and voting in a few weeks. Make the climate hostile to business, and it will move. Make it more expensive, and it will move. Funny how that works.
We will be opening an office in NJ/NY area fairly soon. We are a Delaware C company. If the climate here is made even more hostile than it was during the preceding governor, yeah, we’ll move. We don’t need the drama.

Read moreInteresting and depressing article on Michigan's future

Beautiful smackdown

This is epic. As originally seen on @mndoci ‘s twitter stream. Short version: Those who don’t have a clue, really … REALLY … shouldn’t write lengthy journal articles about what they don’t have a clue about. Lest they get smacked down. Like this. For some reason, its an article of faith for many people, who … Read moreBeautiful smackdown