Specifically, I'd like to take a few moments to talk about how the recent meteoric growth of firms like Lehman Brothers, Bear Stearns, and JP Morgan have contributed to the sapping of Michigan talent, and why this is baloney (a very scientific word) as evidenced by the downfall of these institutions. Someone fresh out of school with no work experience, including bonuses, could easily clear $100 large at a big investment/brokerage bank. Because of this immediately available wealth, fantastic brains with future executive talent flee wherever they are from and head to the operational centers of these gigantic financial houses. Huge salaries and bonuses were not a problem for these types of companies because their profit essentially consisted of Monopoly money, and these firms owned the Parker Brothers factories (oh yeah, that's an analogy). It was nearly impossible to compete with these salaries.
And where do you suppose a small company with an entrepreneurial outlook would prefer to start its business? The place where the average household makes closer to $50K a year, or a place where the average household makes upwards of $150K a year? That's a no brainer. Year after year, individuals and companies cluster closer to the wealth hubs and continue to draw some of the best and brightest away from everywhere else. These individuals and companies have put down roots, and now it would be unreasonable to expect them to leave their homes and centers of business. It would be impossible to touch on the cyclical elements of this population draw - artificially wealthy people pay higher taxes to the cities and states in which they live, leading to better infrastructure enhancements and public institutions like museums and libraries. Property developers build huge and beautiful high rise buildings to attract a slice of the wealthy residents living in that area and the quality of the police protection increases as the wealth of the clientele increases. And so on, and so on.
Now the problem is so ingrained and part of this county's culture that there is almost no way to backtrack. Businesses and their corresponding work force have grown up around these financial centers and have reaped the rewards of the flawed financial system. The saddest thing is that we didn't stand a chance, and part of the reason is that the other team was always cheating.
I am not so naive to think that every person who went to go work for an out-of-state bank would otherwise have come home to work for Compuware, GM, Ford, Arvin Merritor, Masco, or other Michigan businesses, but those companies could not put up a competitive offer. I also know that those in opposition to my viewpoint would say "but Michigan has profound structural flaws that have been evolving for a generation." To you I would reply "how does one work to fix these flaws? Intelligent, energetic, and inspired leadership. Exactly the types of people who have been systematically drawn away from here." The money pulled in the people and the businesses, but the money never really existed after all.
3 comments:
way to go on being all financial and such, but this comment is more to agree with the fact that Michael Phelps definitely did not do well on SNL. Not at all.
(At least he wore a UofM shirt while introducing Lil Wayne...)
Def. scary about the money not existing.
...haven't watched SNL in years. Don't plan on it anytime soon.
And that is why I always root against teams from New York or California.
Seriously, I think your analysis is right on. When the dot.com bubble burst, the money went after new instant wealth. Here is was the mortgage industry and the belief that home prices would always go higher. As you said previously, it is an attempt to earn money without producing anything useful.
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