Friday, July 24, 2009

Detroit RIP

"Battered by massive layoffs, home foreclosures and nearly a decade of economic decline, more residents of Detroit's middle-class suburbs are having a tough time putting food on the table. ... Michigan has long struggled with poverty and unemployment in its urban areas. But the spread of financial hardship has been jarring for a region where the manufacturing-based economy once provided for high wages and comfortable middle-class lifestyles. ... The problem is likely to get markedly worse in the coming months. Michigan, where the 14.1% unemployment rate is the highest in the nation, faces still more layoffs in its principal industries: auto manufacturing, which is in the midst of a sweeping restructuring, and the health-care business, which is reeling from the auto makers' benefit cuts. .... By the end of the year, roughly 100,000 residents will have lost their benefits, according to the state's unemployment agency. ... In May, the caseload for Michigan's Food Assistance Program, which administers the USDA's food-stamp aid for the state, rose to 718,277 households, up 3.1`% from April and neatly triple what it was at the start of the decade. ... In Dearborn Heights, a suburban neighborhood near Ford Motor Co.'s headquarters, one mother of two says she made her first visit to a food pantry last month, after her husband lost his job as a mechanic making between $50,000 and $60,000 a year, causing the family's finances to unravel. ... She said she didn't initially tell her husband that she had gone to a food bank for help, and the rest of her family doesn't know. They are scraping by on income from her part-time job, which pays less that $12,000 a year, and her husband's $360 a month in unemployment benefits", Alex Kellogg, at the WSJ, 10 July 2009, link:

Uncle Sam spends tens of billions to keep Lloyd Blankfein in cigars and look at this.

1 comment:

Anonymous said...

The hardships endured by millions of families in this crisis are not individually newsworthy.

But history will aggregate the suffering and contrast it with the cash transfers from the US Treasury to CEO Blankfein and his colleagues.

Both Presidents Bush and Obama will face the withering criticisms of history.

Historians will say of them that they took the nations treasure and paid off financial firm bond and CDS holders at 100% while every other stakeholder lost all or and a good portion of their investment.

And these Presidents enabled increased concentration in the banking sector and stood aside as assets were amassed in fewer and fewer hands.

History will say that the mirage of the need for "stability" enabled two leaders of the most powerful nation on earth to be coopted by Wall Street. And by allowing increased concentration to have introduced more instability.