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The Year in Politics

By Robert E. Martin

The year 2009 is poignant and significant for many reasons – not only does it represent the end of the first decade in a new century, but it also signified the 30^th year of this publication’s existence as an in-depth investigative journalistic resource for the tri-cities in an era of personality & lifestyle driven gloss, compounded by the booming advent of disposable online journalism.

This was also a decade in which we watched leaders squander the economic prosperity and peace of the previous decade on an endless war as financial markets trashed our economy on elaborate Ponzi schemes that falsely inflated the housing market by selling expensive homes to people that could not afford them.

In many ways, the decade really began on Dec. 12, 2000; the day the Supreme Court of the United States broke over two centuries of precedent to anoint George W. Bush as President of the United States, with the help of Senator Joe Lieberman, who gained a reputation breaking ranks with Democrats to advance Bill Clinton’s impeachment, broke with his old running mate Al Gore to side with Republicans on the issue of counting invalid military ballots in Florida, which cost Gore hundreds of needed votes, and is now trashing any hope of meaningful health reform as the decade comes to a close.

Indeed, it’s looking a lot like the ‘Gilded Age’ of the 19^th Century these days. With government unable and resistant to reign in spending, there’s a gold rush on – with the price of gold going it’s highest ever over $1,100 an ounce this fall – and the disconnect between the nation’s richest and downtrodden widening as the middle class evaporates.

Taxpayers have put up an estimated $17.5 trillion toward guarantees, loans, and bailouts since 2008, but what do they really have to show for it? They’ve seen their net worth drop by an estimated $14 trillion and the number of people in the country without coverage now totals about 50 million – just shy of the combined populations of Australia and Canada. Meanwhile, according to the Center for Responsible Lending, nearly six million homes in the U.S. have been foreclosed upon in the last three years, and another home is being foreclosed on every 13 seconds.

Banking interests have been the key beneficiaries of that $17.5 trillion in guarantees, loans & bailouts, yet they actually do have something to show for it. At top-tier firms such as Goldman Sachs and J.P. Morgan Chase, the aid has meant record profits. Along with Morgan Stanley these three entities, which received funds from the ‘Troubled Asset Relief Program’ will reportedly dole out an unprecedented $29.7 billion in bonuses for 2009, almost half of that by Goldman Sachs alone, meaning it will enrich its 31.700 employees by an average of $415,000 each, as reported in Vanity Fair.

As for the banking industry as a whole, Congress did pass needed legislation to hold down arbitrary increases in interest rates on credit cards; but not before postponing the effective date of the new law one year down the road, which allowed Citibank to pump up the interest rate for some credit-card holders to nearly 30 percent, with other companies soon following suit. As a whole the banking industry will take in an estimated $38.5 billion in 2009, just on charges for bounced checks. Indeed, all those myriad little extra fees now account for more than half of the industry’s profits.

As for ‘Government & Education’, they also did quite well in 2009, thank you. According to The Free Enterprise Nation, which is a national organization representing the economic interests of those within the state who actually work and support the ‘private sector’ portion of our economy, the latest survey by the U.S. Government’s Bureau of Economic Analysis showed that the average federal employee earns $119,982 per year in compensation & benefits, while the average private sector employee earns $59,909. To cover the additional compensation packages of government employees, $100 billion a year is taken from the private sector in income taxes.

Nowhere is this point better illustrated than with the case of Delta College president Jean Goodnow, who managed to navigate an 11 percent increase in her salary for a total compensation package of $212,779 plus fringe benefits.  As Delta College Trustee Kim Higgs pointed out in a guest editorial for The Review earlier this year, ‘While Michigan has suffered an negative 11.4 percent decrease in average household income over the past nine years, the Delta College president receives a compensation package that almost doubles that of the average salary of all State Governors in the United States and a base salary higher than that of U.S. Senators, Congressmen, Supreme Court justices, and all the members of Obama’s cabinet.

Speaking of Barack Obama, the year that began with a ‘Presidency of Hope’ ended with Obama not appearing all that different from George W. Bush on important matters of the economy and health care.

When Bush’s Treasury Secretary Henry Paulson navigated the huge Wall Street bailout, he was simply replaced by another Goldman Sachs’ alumni in the form of Timothy Geithner under Obama, with Obama’s team actually advancing a bill to allow Wall Street companies to take future bailouts whenever needed, without the approval of Congress - so much for stronger government ‘oversight’ of the financial industry.

As for health care reform, December also witnessed Obama’s FDA arguing against provisions in the health care overhaul bill that would open Canadian borders so that consumers could actually purchase cheaper drugs from Canada.  The FDA under Obama argued the same point that the department held under Bush that allowing Canadian drugs into the U.S. might be ‘unsafe’ – a move that caused John McCain to scratch his head and ask why Obama was so keen on protecting the pharmaceutical industry.

With health care costs skyrocketing and premiums doubling and tripling for families over the past decade while wages and income remained relatively flat (unless you were in government or education) it has become obvious that we need meaningful health care overhaul.

Ironically, a majority of Americans and experts agree that the only way insurance costs will go down for health care is if leverage is placed upon the industry to offer competitive pricing – hence, the importance of including the ‘public option’ in any meaningful health care reform overhaul.

As the year comes to a close it looks like Democrats in the Senate are preparing to give up on the public option. None of the proposals that have been floated ensure private insurance companies will face meaningful competitive pressure. Even the most attractive of these proposals won't stop private insurance companies from ripping us off. So while they may call whatever emerges a "compromise," it will substantively signal a total capitulation.

Instead of admitting that some in the nominally left-of-center Democratic caucus have more fidelity to the economic interests of the insurance companies than the will of the American people, they are instead trying to come up with something that they can call a "public option" that might fool people into thinking something meaningful was achieved.

The Congressional Budget Office forecasts a $100 billion in savings through the public option. If the Senate gives up on the public option in return for a pretend expansion of Medicare, it will essentially allow private insurers to cherry pick those that they cover.  By forcing all Americans to purchase health insurance, government will in essence be creating an even more economic windfall for the insurance industry, as private insurers will be able to dump the poorest and least health (i.e. least profitable) consumers who are ages 55 to 64 onto the Medicare rolls.

Say a prayer that the ‘double zero’ decade marked by lost opportunities does not devolve into the decade of ‘last’ opportunities.

Saginaw City Hall: Status Quo

By Mike Thompson

For Saginaw city government, 2009 ended in just about the same way that 2009 began – for that matter, 2009 ended in about the same way that 2006 began.

Darnell Earley still is the city manager, the reform City Council that took hold in November 2005 remains essentially in place, and the 30-year-old property tax cap limits have survived yet another referendum.

Earley’s hallmarks remain as professionalism and budget controls, evidenced by his selection as president of ICMA, the International City/County Managers Association. His public relations remain frosty, similar to Ed Potthoff from the 1960s and 1970s, but council members overall give him high marks.

Council members who took control under 2005's “One Saginaw” philosophy of reduced public discord, which culminated in the 2004 midnight firing of Deborah Kimble as city manager, have remained steadfast. Voters returned four general One Saginaw adherents to office in Larry Coulouris, Andrew Wendt, Dennis Browning and Greg Branch. Browning returns after nearly a five-year hiatus.

However, some internal backbiting took place when Branch took over from Joyce Seals for mayor on a 6-3 vote, bringing along Amos O’Neal as mayor pro-tem.

Seals, for her part, says there still is discord, except that now it’s behind the scenes.

While council members may consider themselves a “new council,” they agreed with their predecessors that the 1979 property tax cap limits are a bane for the budget, and they placed a referendum for removal on the ballot for the sixth time. Voters again shot it down, this time by a 3-1 ratio. This continues a long-standing odd trend in that voters support council candidates who oppose the tax caps, but when their chosen candidates ask them to remove the tax caps, voters reject the advice.

Some council members, in self-assessment after the overwhelming defeat, saw steps that they could have taken differently. They had pledged to immediately reduce the overall tax rate to 11.4 mills, but they opened the door for a potential creep up to 20 mills. They spent $47,500 for a workforce study by an outside consultant, Plante & Moran, rather than asking Manager Earley to do so internally. Then, on election eve, they received a $93,000 proposal to restore an assistant development director under Odail Thorns Jr.

The council waited until after the election to approve this expense, but regardless of the merits (a federal HUD demand for increased oversight of potentially increasing funds), the damage was done among the “vote no” segment of the public that already was skeptical.

Council members through the years have found ways to dodge the 1979 tax caps, including a trash tax and fee, an income tax increase and a public safety millage. Still, those gains have been offset by major federal and state cutbacks, a declining tax base, spiraling costs for health care and utilities, and excessive public safety pensions granted by previous councils.

As a result, budget forecasts call for roughly $3 million annually in additional cutbacks. Council members already foresee going back to voters in 2011 with another request for added revenue. The only reason they won’t try again in 2010 is that state law forbids another tax referendum within two years of the previous request.

Meanwhile, in spite of Earley’s status as ICMA president, City Hall has not followed up on a 2007 ICMA report that recommended the Fire Department should use its "relatively large amount of non-committed staff time" to assist the Police Department. In other words, during a typical 24-hour shift, a firefighter spends less than 1 hour fighting fires. What about those other 23 hours? The firefighters’ union responds that firefighters also spend time in training, in maintaining and washing vehicles, and so forth. But still?

The neglected ICMA proposal would not create a total public safety merger, but it by far represents the largest possible idea for cost cuts and cost efficiency, because public safety comprises two-thirds of the city’s general fund budget.

Another idea is for firefighters to share a role in housing code inspections of rental units.

If cost-efficient other roles are not found for firefighters, then future budget cuts may include closure of one or two of the city’s four remaining fire stations, which properly are located in quadrants of the city. Saginaw once had 11 fire stations; in fact, Nine’s Firehouse Pub near the intersection of Court and Bay is named for a building that formerly was Fire Station No. 9.

Imagine, for example, if the State Street Fire Station were closed. Residents of northwest Saginaw would have to rely on responses from the downtown Central Fire Station, or the Fordney Fire Station way over yonder on Gratiot Avenue. Or, if the Hess Street Fire Station were closed, residents of southeast Saginaw would have to rely on the downtown Central Station or for the Fordney Station crew crossing the river.

These are not good scenarios.

Will the City Council return to the ICMA study in 2010, or will the council remain as essentially a non-policy making rubber stamp for the city manager?

Meanwhile, can older suburbs such as Saginaw Township continue to safely rely on volunteer fire departments that are so slow, that news media crews often arrive at fire scenes before the firefighters arrive. This is a crucial public safety topic that Review Magazine will explore in 2010.

County Government: More Old Guard?

The city of Saginaw’s estimated population of 55,000 barely constitutes one quarter of Saginaw County’s 200,000 residents. Still, there often is more focus on the city than on the county.

Bregitte Braddock emerged at the County Board of Commissioners’ new chairwoman for 2009, and she granted an in-depth interview to Review Mag.

Braddock grew up in Chicago and moved to Saginaw in 1984 to launch a career in management at the then-General Motors Saginaw Steering Gear Plant, where she now serves as production control manager for Delphi Steering.

As part of the Democratic majority on the County Board, Braddock promised changes to include Republicans in the power structure, as proven by her committee appointments.

However, Bregitte Braddock now departs as County Board chairwoman because she is hired as manager of troubled Buena Vista Township, which will present an interesting challenge.

Is the County Board prepared to overcome Democratic Party cronyism, which Braddock seemed ready to confront? Recent appointees to an expanded Road Commission include Todd Hare, former County Board member and chairman, even though Hare resides within the City of Saginaw and the Road Commission is not responsible for city streets.

So, we shall see.

Desperately Seeking Stimi

Review Magazine obviously is not some sort of media giant that can cover every single news story, but then, the existing media giants often fall short on the main stories, for whatever reasons. This is where The Review attempts to fill the news breach, as a supplement to one-of-a-kind coverage of local arts, entertainment, culture and politics.

One example during 2009 was the $787 billion economic stimulus package that Congress passed in February, as President Barack Obama’s first initiative. This stimulus sum amounts to about $2,600 for every mid-Michigan (and American) man, woman and child, which makes even those City Hall property taxes and fees pale in comparison. But as we observed such scant coverage on the local TV news or in the local once-daily papers, we adopted “Desperately Seeking Stimi” as a theme.

            What did we learn about Stimi?

(1) The stimulus did indeed contain tax cuts, to the tune of $252 billion, or nearly one-third of the total. Was this enough? Republican Congressman Dave Camp of Midland and the Democrats’ Dale Kildee of Flint debated this point this point, among others, on our pages. Check Review Magazine’s archives. Our mid-Michigan region certainly is represented by both points of view.

(2) What about Stimi aid for small business, which is supposed to be the backbone of job creation. Representatives Camp and Kildee both confirmed that about $13 billion of Stimi, or 2 percent, is for traditional small business assistance. Readers may form their own conclusions. To date the only form this assistance to small business has come in is through Single Business Loans to alleviate debt up to $30,000.

(3) Were Republicans given a voice among the Democratic majority? Congressman Camp, with his seniority on the House Ways and Means Committee, explained a closeout. Our view is that even loyal Democrats should admit that Camp had a point about being excluded.

(4) Some Stimi funds served as bailouts for state governments. For example, Michigan’s K-12 education cuts would have been even more severe without Stimi. This made Stimi seem sort of invisible, because we didn’t view the larger state and local cutbacks that would have occurred. There were critics among federal legislators, who argued that state legislators needed to get their acts together rather than falling back on Stimi for bailouts. But this seemed quite ironic, in that the feds can pile up endless debt while states (and municipalities) are required to balance their budgets.

(5) In Desperately Seeking Stimi, some Stimi was indeed discovered. Communities have received funds for local police, such as five officers in Saginaw. Highway and road repair projects were accelerated.  Saginaw’s Veterans Hospital will get a makeover. Domestic violence shelters will receive funds. Job training has been funded, although the question remains, for what jobs?

(6) In other areas of Desperately Seeking Stimi, however, there are disappointments. The Saginaw County Community Action Committee (CAC) received $5.4 million over three years to weatherize homes for low- and low-middle income households. Then the U.S. Department of Energy stepped in with construction standards, and the U.S. Department of Labor stepped in with wage standards, and the Michigan Historic Preservation Trust stepped in with preservation standards. Amid all of the bureaucracy, weatherization of the first home among 793 to receive funds won’t happen until 2010. This slowness of action was not the intent of Stimi supporters.

The economic stimulus bill, officially known as the American Recovery and Reinvestment Act, was passed as a two-year plan. Therefore, Review Magazine will continue to endeavor to Desperately Seek Stimi during 2010 and to track this $2.600-per-citizen taxpayer expense, even while mainstream local media seem to miss the story.

Environmental Victories

Environmental activists follow a lonely train that sometimes seems fruitless. Years pass, and nothing really seems to happen on the environmental front. However, 2009 was not that sort of year. Mid-Michigan environmental activists achieved a pair of victories, although tentative in nature.

Dow Chemical Company signed a long-awaited pact aimed at eventual dioxin cleanup, prodded by a newly aggressive federal Environmental Protection Agency under President Obama and EPA Administrator Lisa Jackson.

Meanwhile, the Michigan Public Service Commission has strongly questioned the need for Consumers Energy to build a new $2.3 billion coal-fired plant at the Karn-Weadock facility in Essexville. One question is whether there is public need for more electricity. Another is whether Karn-Weadock occupies a wetland.

“I don’t know if it’s a winning streak, but it’s an upward swing,” said environmental activist Michelle Hurd-Riddick in an interview with Review Magazine. “This has always been a roller coaster ride, with highs and lows, victories and defeats. We always have to remain vigilant and hold their feet to the fire.”

She adds: “I dare anybody from the Chamber of Commerce, to the legislators, to the public health officials, to state that it’s OK for a child to grow up on contaminated property, or to eat contaminated food. Our greatest economic resource in this region is our river system. The entire region could thrive on activities on the river. Why don’t more people see that?”

Checking Out Our Weathermen

On another environmental issue, Review Magazine surveyed our main local weathercasters regarding their views on global warming.

What did we learn?

Mark Torregrossa from WEYI Channel 25 is a global warming liberal who seemingly could find an easy place in the Obama Administration.

Darren Bradley from WNEM Channel 5 is a global warming moderate-liberal who believes that climate change indeed is a legitimate issue.

J.R. Kirtek from WJRT Channel 12 is a global warming conservative skeptic who questions the science of recent years.

We just thought you’d like to know.

But as Bob Dylan noted many years ago, when it comes to the topic of politics in the year 2009, ‘You don’t need a weatherman to know which way the wind blows.”

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