… 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

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 more

Nails it !!!

Dave Barry in his usual fine form … summarizes our year. The one take away should be … WHAP Did anything good come out of 2012? Maybe. Just maybe. Consider: For years now, Washington has been paralyzed by bitterly partisan gridlock, unable and unwilling to act in the face of a looming, potentially disastrous economic … Read more

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 more