Monday, December 22, 2008

A lifeline shouldn't come at that price

Following the request for financial assistance from the federal government by the Detroit Three automakers over the past month left me feeling like the rest of the country hates Detroit, and by inference, Detroiters. I have to admit, it's been a preoccupation these many weeks and I've been bothered by it -- mightily.

At a time when our state and region are struggling and could use not only a lifeline, but some moral support, I wish our government leaders would have taken a different course. However, they didn't.

They finally approved support a few days ago -- not as much as requested, and with ample strings. It was a far cry from the treatment legislators afforded Wall Street, which it gladly gave $700 billion with no stipulations. Worse, news reports today indicated that financial institutions that received the money can't document how they have been spending the dough -- and that is my money, and yours. Meanwhile, if General Motors and Chrysler (Ford said didn't need any money right now) fail to jump through whoops in a satisfactory manner over the next few months they will be required to pay back their loans in March.

That will probably be the case, unless the Barrack Obama Administration shows the automakers some love when he takes over. The credit market is still in such a state of turmoil that most consumers can't get loans to buy vehicles anytime soon.

Bigger Problems

Metro Detroit cannot afford this right now. I'm not just talking about the automotive industry, I'm talking about the community. Helping Detroit is good, it's needed. I don't just mean the auto industry, for which "Detroit" has become a code word.

I spent a few hours Sunday doing my part as a volunteer with a MorningSide Neighborhood Organization project in which we hope to document blight in the community with the hope of getting property owners and city officials to help address the issue of foreclosures and their decimating effect on the area. On the two streets I documented, I counted 51 vacant homes. Some were abandoned, some foreclosed and a few sat empty with for sale signs in front. Most were either crumbling or vandalized, and need to be razed -- or soon will need to be.

I couldn't help but think people across the country hate us while this is going on?! Our federal government is hesitant to throw a rope to an industry which supports a region struggling like this?

The Detroit News today reported that Michigan is one of only two states (Rhode Island is the second) to have a shrinking population, according to estimates just released by the U.S. Census Bureau.

"Michigan's loss rate increased, with an estimated 46,368 fewer people in the state on July 1, 2008. The bureau estimated the state lost 34,000 people the year before, and nearly 10,000 in 2006.

If the state maintains its losses for another year, its population could fall below 10 million for the first time since 2000. According to the Census Bureau, Michigan has 10,003,422 people," The Detroit News reported.

The loss in population is consistent with the loss or thousands of jobs, a large percentage of which are tied to the auto industry.

From what I saw, it looks like many of those residents just walked away from their homes and moved elsewhere. I'm assuming, based on Census data, that some left the state.

I am convinced that Wall Street received an unconditional bailout from Washington because they run in the same circles, whereas Old Money auto industry figureheads had to go to Capital Hill with hats in hand because they are outsiders. They got a raw deal, even after a $13.4 billion so-called bailout came their way.

Offering money to the auto industry was a social justice issue. With so many metro Detroiters dependent on the industry (including children, families and retirees) helping to ensure its survival is a moral imperative. Why it took so long, and came with such baggage, is beyond me.

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