Tar Heels Deliver Hard Truth on the Michigan Economy
No, this post is not really off-topic. And no, Mr. ToughMoneyLove doesn’t mean to pile on all of those in Michigan who are unemployed through no fault of their own.
But enough already about how the Michigan State Spartans – crowned the “team of destiny” by an epidemic of wishful thinking – were going to inject hope and comfort into those being dragged down by the Michigan auto industry. Win or lose, that kind of fantasy attitude is not going to help anyone recover from economic misery. Nor will it expedite the acceptance of a radical change in economic thinking which is sorely needed.
Accept the Reality of How You Got There
What a load of “let’s avoid the truth.”
First, Detroit became perhaps the worst large city in America long before the current economic crisis. Corrupt leadership, over-dependence on a declining industry, the list of contributing factors could go on. Michigan itself has relied too much on the negotiating muscle of its labor unions to force-feed economic benefits to a declining membership.
Now all of that has come crashing down. But are we hearing acceptance of why they crash and burned? Are union leaders issuing apologies for burdening auto makers with oppressive labor costs? Are members of management taking the blame instead of bonuses for bad decisions, including agreeing to union demands?
Some are now “admitting” mistakes. But that is only because they are increasingly dependent on life support provided by taxpayers. The government has also been slow to accept reality, as demonstrated by its deep incursions into the finances and now the management of GM.
Why can’t these folks be more like Tom Izzo, the competent realist who directs the highly successful Michigan State basketball program? After the game, he immediately accepted reality, acknowledging that Carolina was clearly the superior team. When will those running the bilge pumps on the SS GM-Chrysler-Titanic reach similar levels of acceptance?
Accept the Reality of What Must Change
Yes, the UAW finally made some concessions. The government partially forced its hand. But a lot more hard truth needs to be heard and understood by the players in the auto industry before its future is secured.
I am not confident in the GM Total Confidence plan. Are you?
Where is the Chevy Volt? It will be too little, too late.
Where is the recognition that too many broke Americans were buying cars they could not afford? The auto industry depended on bad decisions by underfunded consumers to get feature-bloated vehicles off the lot. GM’s “new and improved” strategy is to target those same buyers by offering to make nine months of car payments if they lose their job. Please.
Thank You Tar Heels
Yes I am a Carolina fan, by proxy. One of my sons graduated from UNC and is very proud of his school. So I am pleased they won.
But I am also pleased that Michiganders (or whatever they call themselves) will no longer be distracted by the hype from working their way through the pain of economic reality.
I have often written that money and emotion do not go well together. It leads to blaming external factors instead of looking internally. It also causes fantasy and wishful thinking:
- “I will find some way to make these payments.”
- “I deserve this.”
- “If I buy it, the money will come.”
- “Gasoline will always be cheap.”
- “More SUVs means more profits.”
- “See the USA in your Chevrolet”
Stop fantasizing. Accept where you are. Acknowledge how you got here. Make the changes that are necessary. Only then will you clear a path to your recovery.