Bail-Out Politics: Even Michigan's Economy Is Improving
At Nicky D's Coney Island in Warren, Mich., across the street from a Chrysler truck plant, co-owner Diana Dedvuka has seen her bustling diner come back from a near-death experience. "People are working. They're spending more money. Customers seem to be happier," she said. In 2009, the family-owned restaurant struggled to stay open as Chrysler and General Motors teetered on the brink of collapse. "Our business went down 40percent," Dedvuka, the daughter of a retired auto worker, told ABC News. "Driving to work, you would see these big (auto) plants completely empty. It would give you chills."
Now, Dedvuka says, customers who once feared losing their jobs are complaining about working too much overtime.
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"Since the depths of the recession, we've seen manufacturing stabilize and start to come back," said Robert Dye, chief economist for Comerica Bank. "What we've seen in the auto industry lately has been good news for the state."
In fact, it's been very good news: Tax revenues have jumped so dramatically that Michigan now enjoys a $457 million budget surplus. The auto industry is driving the nascent recovery in Michigan, where manufacturing accounts for more than 20 percent of the state's economy. Indeed, U.S. car sales are revving up at the fastest rate in nearly four years, rising 11 percent in January over a year ago. The state's unemployment rate, while still higher than the national average,has dropped from 12.6 percent, in March 2009, to 9.3 percent in December.
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But in Michigan, the auto industry is so vital to the state's economy that even Republican Gov. Rick Snyder says not bailing it out "would have had a devastating impact on the economy." Economist Robert Dye is even more blunt: "It would have been catastrophic for the state of Michigan and for the U.S. economy as well."
Full article: http://news.yahoo.com/bail-politics-even-michigans-economy-improving-100047912--abc-news.html
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