Punchinello’s Chronicles

April 3, 2009

Atlas Shrugs Off Michigan

Way back in the 1960s, Ayn Rand wrote about the competent people of the world and the jobs and money they produce. She likened them to Atlas, the Titan who supports the entire world on his shoulders. Looking at the rise in socialism and communism, Rand’s novel, “Atlas Shrugged” examined what would happen if all those people just stopped. If they all just left, quit working for everyone else, and formed their own community.

Fifty years later, the world in which we live could be lifted right out of the pages of Rand’s novel. For decades, now, we’ve heard that President Reagan’s “trickle-down economics” was a joke. It was so laughable that no “real” or “thinking” person would discuss it. We were told by the journalists, pundits, analysts, and university professors that only poor people, uneducated people, and “the masses” would ever fall for Reagan’s idiotic concept of economics.

And so, quietly, because the brilliant thought-leaders of the journalistic community can’t understand it, we now have a living example of so-called Reaganomics and Atlas Shrugging. Below is a partial summary of an emerging news story. I’ve cut out portions only to make a point. The entire article is linked twice.

Leaving Michigan Behind: Eight-year population exodus staggers state

Outflow of skilled, educated workers crimps Michigan’s recovery

Thursday, April 2, 2009 – Ron French and Mike Wilkinson / The Detroit News

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.

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.

Population loss of that magnitude is so rare that its impact has never been studied. But The News’ analysis discovered some sobering trends:

  • 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.

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.”

  • 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.

Those leaving Michigan had incomes 20 percent higher than those who moved here ($49,700 to $40,000), a disturbing reversal of a long-standing trend.

And those figures don’t take into account the “ripple effect” (Ed. Note “Reaganomics”) those paychecks would have had here — an estimated $3.7 billion. (Read the full story…)

So apparently nobody can figure out why those leaving are the smart people, those who actually start companies, start businesses, hold jobs that produce high taxes, and those who spend a lot of money in the local area. Nobody can figure out why they don’t want to stay in Michigan.

It’s a mystery!

And yet, for year after year after year, the same Democrats have remained the elected government of the state. That same party has spent countless dollars to “get the vote” of the poor, unemployed, low-income population. That same party has promised to “fix everything.” They’ve promised to tax the wealthy, redistribute money, and guarantee that everyone will have something for nothing.

And of course, those low-productivity voters have continued to vote the same Democrats into office. Year after year, Michigan’s government has spent other people’s money. They’ve increased taxes, slammed the wage-earners, fostered class envy, and demonized “the wealthy.”

Those same Democrats who now make up the entire federal government in Washington D.C. have demonstrated what happens when they win — when they’re in power.

Michigan is the leading edge of what is taking place in America at large. Those same Democrats have campaigned with the same demographic, catering to the poor, unemployed, special-interest minority groups, telling them they’ll get money for free.

And who are the producers? Who are the ones making all that money? Who creates the jobs, businesses, income, capital gains taxes, investment taxes, and fees? Where does all that money come from?

Why, the people leaving Michigan. And New Hampshire. And Vermont. And soon, New York City.

As the bumper sticker says: “I’ll keep my money. YOU can keep the change!”

The ONLY mystery here is that the government leaders and journalistic analysts in Michigan are stumped. They’re scratching their heads, wondering what could possibly be happening. They have no idea, and can’t fathom why the best and brightest, smartest and most industrious people are leaving.

A total mystery!

Michigan and California are fundamentally well-known throughout the entire United States as being anti-business, anti-capitalism, anti-wealth, anti-conservative states. Anybody can look at the historic trends in both states, and see that the Democratic leaders with progressive-liberal ideologies would like nothing better than to get rid of conservatives.

And finally, those conservatives are getting the message. They’re leaving. They’re shrugging. Much as we watch the same policies drive eBay full-speed into the ground, we’ll now get a chance to see it all play out in the “bigger picture.” In the past years, eBay has driven off the seller, producers, and high-volume “power sellers.” They’ve penalized people who sell, and catered to the people buying flea-market leftovers. And like the government of Michigan, those running eBay are stumped. They can’t figure out why the company no longer works anymore.

We’ll get to see exactly how liberal ideology “helps” the poor, the hungry, the halt and the lame. We’ll get a chance to see how money works, and discover what happens when nobody produces any money anymore.

We’ll get to see what a “merit” system means, and what “incentives” mean in terms of tax reduction, tax incentives, tax breaks, and tax cuts. We’ll get to see what happens when the federal government runs all the industry in a state. We’ll learn whether or not union organizers and leaders have their members’ best interests at heart.

It’s certainly interesting, isn’t it? That mysterious, unknown, silly and mystical force called Reality.

Advertisements

4 Comments »

  1. […] Punchinello’s Chronicles put an intriguing blog post on Atlas Shrugs Off MichiganHere’s a quick excerptWay back in the 1960s, Ayn Rand wrote about the competent people of the world and the jobs and money they produce. She likened them to Atlas, the Titan who supports the entire world on his shoulders. Looking at the rise in socialism and communism, Rand’s novel, “Atlas Shrugged” examined what would happen if all those people just stopped. If they all just left, quit working for everyone else, and formed their own community.Fifty years later, the world in which we live could be lifted right out of […]

    Pingback by Topics about Trends » Atlas Shrugs Off Michigan — April 3, 2009 @ 4:47 pm | Reply

  2. […] Atlas Shrugs Off Michigan « Punchinello’s Chronicles […]

    Pingback by Atlas Shrugs Off Michigan « Punchinello’s Chronicles — April 3, 2009 @ 4:53 pm | Reply

  3. There’s a few things wrong with your analysis:

    First, it would be great if you wouldn’t mind posting the source for your quote that Jennifer Granholm ever promised to “fix everything.” I don’t ever recall her making such an outlandish claim.

    Second, in the lead-up to the economic collapse of the state it was Republicans that were in power (both in the Governor’s office, and in the legislature). It wasn’t until January 2003 that Granholm took office – and at the time, both sides of the legislature were controlled by the Republicans (the Senate is still firmly in Republican control, by the way – so any piece of legislation passed must get by them). In fact, in the past couple of decades, the GOP has dominated Michigan’s government and enacted a number of Rand-ian policies like immunizing drug manufacturers from liability (which didn’t stop them from fleeing the state as the GOP promised) and passing unsustainable tax cuts that bled the state’s rainy day fund dry during the Engler administration.

    Third, you can blame entitlements and democratic policy for the shape the state is in, but when it comes down to it, we’re only in the middle of the pack when it comes to tax rates – and our complex tax structure is a bipartisan mess (as is our complex permitting process).

    Michigan’s economy is in the shape it’s in because politicians of both parties spent the past four decades avoiding doing the politically-unpopular work that would have been necessary to diversify the state’s economy. It has nothing to do with the state being “anti-business, anti-capitalism, anti-wealth, anti-conservative states.”

    The “Reality” is that tax cuts can only accomplish so much (and they’re best applied sparingly and in a targeted fashion; it does not behoove the state to attract businesses in declining industries that won’t be around in a decade or so).

    Comment by SethGecko13 — April 5, 2009 @ 8:01 pm | Reply

  4. SethGecko13,
    I should first clarify that because of the way I write, I often use quotes around 1- or 2-word phrases because I prefer that to italics, which often don’t show all that well. If I’m attributing a quote, I’ll do so directly with either a link, the name of the person or organization, or both. So in the above, I’m not quoting Jennifer Granholm (2009 Governor of Michigan) directly. The quotes indicate an implication and/or interpretation made by the general public.

    But to answer your points, you’re right that it isn’t exclusively the Democratic party that’s brought Michigan to its knees. However, to actually quote from Jackie Mason, “When you inherit a fire, you don’t make it worse!” I remember John Engler as the long-time Republican Governor (1991-2003), and that he was trying to turn the state around, toward conservative principles.

    That being said, politicians in general have pretty much ruined the nation. But within the current chaos, the Democratic party is adding fuel to the fire. Republicans have pretended to be conservative, only to spend as much money as possible in their own interests. So yes, Republicans have helped sustain the foundation laid by the FDR Democrats.

    Democrats don’t pretend to be conservatives, and they spend more money (generally) than Republicans. In 2009, we’re 5 years into a Democratic administration in Michigan. To say that it was entirely Republican groundwork that’s brought the state to its current condition doesn’t make any real sense. Look how quickly the Obama administration is dismantling 8 years of Bush implementations.

    All in all, you’re making valid points. Michigan isn’t the only state falling apart. But what this post primarily involves is the increased outmigration of people with the skills and mental outlook to promote and build new small businesses. New Hampshire and Vermont are in the same situation, and Illinois is right up there with them.

    There’s no question that the Democratic party candidates in general, routinely promise the lower-income and middle-class voters all sorts of gifts and programs, promising to pay for it all by taxing the rich and wealthy. Additionally, with the black population historically voting Democrat and being pretty much in the same conditions, you have to ask how come? So the voters themselves are certainly to blame as well. “We have the best government money can buy,” to actually quote Bob Brinker, financial radio host.

    Not only Michigan’s, but the entire US economy has gone through the past four decades of uncontrolled spending, debt financing, and never-ending budget increases. And yes, that has a great deal to do with anti-business, anti-capitalist, anti-wealth, and anti-conservative principles and ideology.

    Republicans are NOT conservatives. If a conservative enters politics, he or she generally attaches to the Republican party, but only because Republicans have a vague affiliation with conservative values. But only vague. The types of tax cuts Republicans enact, usually favor mega-corporations, not small business.

    The instructive take-away from your comment is that with a Democratic governor, Michigan still has a majority GOP legislature. In Washington, with a GOP president (Reagan), there was a Democrat controlled House and Senate. And in both cases, the spending simply went on and on. So it really doesn’t matter, apparently, which party “controls” government. Neither party seems to have the best interests of the people or the nation in general as a priority.

    Comment by Punchinello — April 6, 2009 @ 2:50 pm | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: