Labor & The Feeding Trough – Cause and Effect Part II

In Tuesday’s speech, Michigan Governor Jennifer Granholm still struggled with the reality that six years after her taking the reigns, Michigan is seeing what is easily the worst economy since the great depression. And though she finds it easily shrugged off as caused by jobs going overseas and also caused by the previous administrations, (Federal AND her direct predecessor) she neglects to even consider the reason or reasons that jobs would leave Michigan.

The state of Michigan being a state which allows UNIONS to keep “certain” employees from accepting and performing certain duties is at a disadvantage competitively to those states and countries which have “right to work” legislation, or simply no labor rights movement.  So in the process of trying to become efficient, and cost effective, the businesses must seek out more competitive and effective locations.  It is quite simple, yet the solution of “right to work” legislation isn’t so much as considered by the current administration.

Then there is this..

Granholm alluded to Michigan’s participation with regard to the stimulus package, however what she didn’t talk about directly was her anticipated participation in the feeding frenzy of the stimulus, and one particular program she has been waiting to put her hand out for, the “Stabilization act.” The begging has only begun in this 46 page Neighborhood Stabilization Program “application” designed to “renew value” in troubled areas by tearing down blighted homes etc.. (hmm not in my hood..  not yet at least) Total cost of course on the order of HUNDREDS of millions to have local taxing units literally BUY property as well as dispose at its discretion. Further, it mandates usage of the benevolence of the federal dollars.. (yeesh) to make sure that it specifically targets putting people who cannot afford homes in them anyway.

Though it seems our state government would be remiss in missing this great opportunity to “add value” to the sagging home prices, it neglects to consider the very real effects of such programs in the way they actually cause home ownership to become MORE difficult for some as prices get out of reach.  Further, this is EXACTLY WHAT STARTED THIS ENTIRE MESS IN THE FIRST PLACE. (as noted in my first installment a few days ago. But ultimately, we wind up chasing our tail, for as soon as this money goes into play, the “speculative” values of areas that are currently settling to affordable levels for those who make too much for straight out welfare, yet not enough to afford inflated housing costs are going to become out of reach again.

It CHEATS those who play fair, work hard to earn an honest living, and offers an inflationary element which serves only those who benefit from government largess: The poor, and the very rich.

Something else to note in the “application,” is that it sets aside $7 million as “administrative costs” to handle the Grant or loan or whatever the hell you might call it…  Consider that NO Department ever created is ever dissolved easily, we will then find ourselves on the hook for further enlargement of state liability by the necessity of money management. The following section as case in point (Randomly selected):

Activity Description: MSHDA will work with local partners and use available data to identify households for whom foreclosure cannot be prevented or avoided. HUDapproved counseling agencies will evaluate these households to identify needed support to be successful rental tenants in their current home, including the amount of monthly rent they can afford. Households approved for participation will be given the option of deeding deed their home back to their lender in lieu of foreclosure under the following conditions:
• The lender has agreed to sell the unit to a participating nonprofit organization at a
pre-determined discount from appraised value;
• Any necessary repairs have been identified and will be implemented by the
nonprofit owner.
• The non-profit will rent to the current occupants for an affordable rent (a portion
of the rent may be set-aside in a home purchase account)

The amount of STATE involvement will be enormous if they are to be “accurately” dispersing needed help to the truly “qualified” (read as “appropriately” needy)

The chance of recovery for the state of Michigan slips even further when we ask for and then accept these funds, and ignore the fiduciary responsibility and economically moral standards which once were the rule.  While it is understood that we face further  economic woes, seemingly wonderful options such as this will merely become white elephants and the circus in Lansing will have too much on its hands to NOT expand its tent.

02/05/09 10:20AM UPDATE: In related news taxpayer groups are fighting senate GOP leaders on this issue