Essay: Reality Check - 6.4.09

Michigan Radio’s Political Analyst Jack Lessenberry is wondering how we will know when the economy has hit bottom…

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I know you want to hear some more potentially bad news right now about as much as a frog wants to hear that his pond is drying up. But I have reluctantly come to accept the following theory:

We are never going to get any better until we face our problems. Completely, with open eyes, no matter what.

That’s true in our personal lives, and it’s true about Michigan. Now, it IS important to remember the things that make Michigan great. It is important not to lose sight of the potential we have.

Yet we also have to face cold reality. Our governor didn’t quite do that on Black Monday, when General Motors declared bankruptcy. She accurately called it a “cataclysmic event.“

But then she went on television and said there was a “silver lining” to this. “We finally know we are hitting bottom. We’re resilient and we now know where the end is gonna be.'

Well, no, with all due respect to the governor, we haven’t yet hit bottom, even under the best case scenario. We also don’t know where the end is going to be. We know where we hope it will be.

But we don’t know. First, here’s why we haven’t hit bottom yet. General Motors is laying off another 21,000 workers, nearly nine thousand of them in Michigan. They haven’t lost their jobs and stopped spending money in their communities yet.

That will happen gradually, over the next weeks and months. When all these workers lose their jobs, other nearby and supporting businesses will be weakened or ruined as well.

So unemployment will undoubtedly continue to worsen for awhile. The governor also said: “The doctor finally says we have one more painful operation and it‘s gonna take you three months to heal, and the prognosis is good. GM will be stronger.”

Well, we hope so. Everybody hopes so. But that is by no means certain. Now, I recognize that as the top official in the state, part of her job is to be upbeat and put a positive spin on things.

Jennifer Granholm can’t very well come out and say, “it’s hopeless. Leave for North Carolina now.” Nor should she. But again, we don’t know if General Motors or Chrysler will survive long-term.

The goal is for General Motors to reconstitute itself as a smaller, leaner, meaner and more easily profitable car manufacturer.

The Obama administration has worked hard to make it possible for them to do so. But nobody knows if this will happen. Yesterday, the New York Times noted that all these calculations are based on General Motors not losing any more market share.

Yet there is little reason to think GM won’t go on losing market share. It has done so steadily since 1980.

Optimism does not qualify as a strategy. General Motors has to find a way of making cars people want to buy, and then sell them at a profit. That may happen. I actually think it will happen, though it is going to take a lot longer than three months. But it might not happen.

And we just might want to start preparing for that.

Comments

[George]

As an entrepreneur trying to develop a new alternative energy technology, here in Michigan, all I can say is - DO "Leave for North Carolina now"!

I also have to agree that optimism alone is NOT a strategy for success (neither is going overseas with hat in hand). If it were, we could all be living in million dollar homes, with zero down mortgages, sky high stock values and all the green energy we could use.

[Thrasher]

GM selling more cars is not the approach for the future..We need GM to commit to MASS TRANSIT..

This is the model and market for the Future!!!!!!!!!!!

We need our government to spend money on redesigning all of our cities and towns..No more trillions of dollars on the Middle East and chasing down terrorists and dictators...

Now is the time to care about AMERICA

[Mary]

I'm looking for the story or podcast on the Upper Penisula that was broadcast around 5 pm today. Jack Lessenbery was the reporter/commentator and I only heard the last sentence -- something about the federal gov spending $$ in Western UP and Hoekstra being against it. Does anyone know where to find this or know what was said

[Jack Lessenberry]

This is Jack Lessenberry. I plan to address this further tomorrow.

[Any Salyer]

Mary, try here:
http://preview.tinyurl.com/rea48d

(This is for a preview page at tinyURL that lets you see where you are being redirected. Always look before you link!)