The winter months in Michigan can be, and usually are, rather dreary. During our annual holiday visit to metro Detroit, along with the usual lack of sunshine, we had experienced the joy of pouring rain on Christmas day. Fun. Of course many can get used to such weather, and some will even claim to like it. For some reason many Michiganders complain all winter about snow.  Some even claim to prefer cold, damp weather to dry, cold weather. Many say, “well, at least it’s not snow!”, whenever it rains. Because soaking wet and cold is apparently so much better. Besides, snow is the only thing that covers up the brown grass, bushes, trees, and all of the mud that we get to experience a good four, or more, months of the year. But, if someone claims to like it, who am I to judge. Whatever makes you happy…

On the plus side, we enjoyed the usual things during our visit to metro Detroit. We spent time with family for holiday brunches, lunches, and dinners, as well as at a memorial for my grandmother who had recently passed away at the age of 98. We ate and drank at some of our favorite metro area restaurants and bars, and caught up with Friends. We also got to enjoy a Red Wing’s game, as we watched Detroit beat the Colorado Avalanche.

In the weeks leading up to our trip back to Detroit, we scheduled some drywall work to be done prior to our arrival. Over the eight years we’ve owned the home we’ve gutted the bathroom and kitchen. And by gutting, I mean we ripped out absolutely everything. In the bathroom we had to stand on floor joists as we laid new sub-flooring. In the kitchen we spent days ripping out old underlayment covered with nasty, worn out linoleum made to look like bricks. In both rooms everything went. The bathroom got a new cast iron tub, all new plumbing, ceramic floors and tub surround, as well as new insulation and drywall. The kitchen received all new cabinets, appliances (other than the fridge), and new oak, hardwood flooring. We also replaced insulation and drywall in two bedrooms, refinished all of the old, existing hardwood floors, as well as the new kitchen flooring, after ripping out disgusting, rental house carpeting. We patched holes in the foundation leftover from the cement forms. All of this was done by us, with the rare helping hand of a professional plumber or electrician. The only thing we didn’t play a major role in installing was the new furnace and air conditioners.

We did as much as possible ourselves because we didn’t want to take out a loan on our house. We didn’t believe that borrowing to fix up our rather modest ranch house was a smart move. Instead invested a lot of sweet equity, saved money in envelopes, and always paid all bills in full. The only exception was the twelve months, same as cash, credit card Ikea gave us. We did take advantage of a free year long loan. Of course we paid this off in full before the deadline. We had also purchased a house we could afford, even on one income should one of us lose our jobs. And this happened shortly after buying the house. My wife’s company was purchased by good ole’ Barry Diller, and was promptly laid off. I quit my job a few years later to try my hand at self-employment. We never had to stretch to afford the house. We were never house poor. We even paid extra on the measly $666 dollar mortgage each month in a effort to pay down the principal.

While we did see hardship coming to the metro Detroit area, we didn’t have the renovations finished soon enough to sell when we new we should. And while we saw the writing on the wall, we certainly didn’t know it would get as bad as it did. Upon arriving home we worked hard on finishing the basement on our house, not really knowing the extent of the value lost in the previous six months. Sure we new it had lost value, but all told, it’s probably down 40% or more from it’s peak value. We were told by our real estate agent that we really needed to finish the basement, and so we were intent on it…until we realized what kind of shape we were in. Instead of throwing good money after bad, we began to think in terms of damage control. We may as well burn a pile of money on the driveway. Or perhaps put a pile of money on the driveway. At least that would generate some interest in the place.

Now I constantly read articles like:

Underwater Mortgages Hit 11.3 Million

Strategic Defaults

Debtor’s Dilemma: Pay the Mortgage or Walk Away

Strategic Non-Foreclosure Becomes Official Policy

Freddie Mac: “Potential Large Wave of Foreclosures”

After learning that we were hopelessly under water, we dropped all tools and stopped work on the house. Strategic default, the new term for walking away even though you’re currently good on your payments, became a very appealing thought. We moved for work, and we can’t, and don’t want to, go back. Two years of paying the mortgage on even a cheap house (that we don’t live in) is a huge amount of money that is not saved for retirement (not that I ever expect to actually retire), or for the unthinkable potential need for a future debilitating illness, or for other future needs.  The money becomes locked away, in a sense, prevented from being used for more useful in the economy. Even though we bought way less than we could afford, never borrowed against it, and did all renovations ourselves, we are still faced with the possibility of owing $30,000, if we can even sell the house. This is perfectly plausible scenario even though we did everything “right”. And now the mortgage and banking industry wants me to think of my legal obligation as a moral obligation. The legal documents say it all. They state in the terms what we owe, what the collateral is, and what happens if we fail to pay. There’s no mention of heaven or hell, good or bad, right or wrong…only terms of agreement, and potential penalties should one side fail to uphold their end of the bargain.

I don’t like the idea of walking away, and we’re doing what we can to avoid it. But at some point we need to, once again start saving the large sums of money needed for our future. The longer we hold off, the worse it becomes. Even the moral compass in my head is weak compared with pending problems of a future with too little saved. Which potential scenario is worse? The one were we walk away from a legal obligation with a bank? Or the moral obligation were we fail to take care of ourselves and our families, without relying on public handouts?

After living and working for the past two years in D.C., and Denver, Colorado, coming back to the Detroit area is a real eye opener. What was once a maddening and frustrating place to live is now just plain depressing. With the real unemployment rate estimated to be near 20% for the state, and a ridiculously high 50% for the city of Detroit, still falling real estate values (down 40% in my area, and including our house), a crumbling infrastructure, financially strapped municipalities and school districts, and a apparent 50% commercial vacancy rate (just judging by what I can see..), the metro area seems to continually worsen. Each time I come back it seems that things couldn’t get worse (even though I don’t believe the area’s hit bottom yet), yet it always does.

Living in the area, one becomes accustomed to things residents in most other areas would never imagine. Roads that get complaints in other areas, metro Detroiters can only dream about. The public transit that others complain about being crowded or expensive, doesn’t even exist here. Same with the practically non-existent bike lanes. In Denver I ride my bike everywhere, only getting in the car to make longer distance trips. It’s something that I found to be unacceptably difficult here in southeastern Michigan. When I did make a trip by bicycle here, I was that strange person riding their bike on the road carrying grocery bags; presumably some poor sap who’d had his license taken away, or who didn’t have enough money for a car. In Denver, I’m just one of many using a bicycle for, believe it or not, transportation. Imagine that… Our neighbor here in metro Detroit would drive one block to buy cigarettes.

Driving around metro Detroit, it’s rare to see more than one or two people out getting exercise of any kind. In Denver it would be rare to see less than a dozen people exercising on my two mile ride to work. The weekly Wednesday night cruiser ride in Denver attracted up to 850 riders on a single night this past summer. Of course one has considering how many other options there are for socializing, entertainment, and outdoor activities. On any given week there will be rides, runs, creative Meetups, art openings, and just about anything else an active person under the age of 95 might enjoy. I know some of these things exist in metro Detroit, but the often long distance between them isn’t just inconvenient, but a huge waste of time, and dangerous when you consider all of the different highways one would have to travel to get from, say, Royal Oak to Ann Arbor on a weekday evening.

I have a point, beyond yet one more rant about the area. And the point is this: does anyone, who hasn’t left, or doesn’t want to leave, understand what needs to change about the metro area? Everyone knows that Michigan needs jobs. But I get the feeling that many who remain believe that those who left were weak, or quitters, or don’t like hard work. Those “quitters” who left the state, left because they had other opportunities…better opportunities, and most likely a chance at a better lifestyle. They didn’t leave because they weren’t up for a challenge. If an area offers jobs, and “opportunities” rooted in the past, and another area is embracing the future, why would I choose that challenge? If you can be on a better team, who wouldn’t choose it? Sure, some would rather be a big fish in a small pond, but this particular pond keeps getting smaller, and dirtier.

The point is often made that the area needs to bring back manufacturing jobs. I wouldn’t argue that manufacturing jobs…heck any jobs, would be good for the area. But maybe what the area really needs is to face reality. Metro Detroiters need to adapt to changing times. An education may be a good place for many to start. The claim is often made that metro Detroiters are scrappy, gritty, and hard working survivors. What mid-west city doesn’t believe that? The question is, what do survivors do when there old way of doing things doesn’t work anymore? They change their way of doing things. What did metro Detroit do when it was obvious the ways of the past were going to end soon? Nothing. Detroit made pretty much all of the same mistakes Pittsburgh has made, but unfortunately, unlike Pittsburgh, Detroit’s had very little of the fortuitous investments in other industries.

The question that should be asked, that often isn’t, is why have our young and highly educated citizens been leaving for decades? If the question was asked of every one of them, that has left the state, one would get a variety of answers from jobs to lifestyle. If you were to ask what it would take to get them to come back to metro Detroit, the answers would be equally varied, but I doubt many want to come back for traditional manufacturing jobs. Nor did many of them leave because of a lack of traditional manufacturing jobs. As a friend said the other night, “the state is a storefront. Why would anyone want to come in?”

When time Magazine offered advertising space for a campaign designed to draw this very demographic to southeastern Michigan, they asked five large agencies to answer the question, “If I’m young, talented and creative, and open to all kinds of opportunities, why Detroit?” Take a look at the ads… My personal opinion is that these ads do a better job of answering, “if I’m young, talented and creative, and open to all kinds of opportunities, why leave Detroit?” The ads do a great job of pointing out the disconnect that exists between those who have lived here a long time, and made lots of money here, and those of a younger more mobile generation. Outside of the suburbs of Detroit, who cares about Kid Rock? It really makes me wonder, if these people even understand what types of music the target demographic listens to? I can tell you, it’s not Kid Rock. Not a single one touched on any compelling reason for someone from outside of the area, to relocated here. Why are we even asking the old guard how to attract a new generation of creative, enthusiastic, and highly motivated entrepreneurs and creatives? L. Brooks Patterson still wants to stake metro Detroit’s future on the widening of I-75 from 8 Mile to M-59. MDOT and SEMCOG still seem to believe all transportation should be done in an automobile. No bikes, no trains, no walking…again that’s for the Third World poor, such as those in New York, Chicago, Atlanta, San Francisco, Portland, Denver, London, Brussels, and Toronto.

The morning after I arrived back in metro Detroit, we watched part of a round-table discussion on a local news show. The topic was, of course, about the area’s future. It appeared that not one of the participants was under the age of 60. Not that those over 60 have nothing to contribute. But asking only those who lived through a very different time period how we should proceed into the future misses the point entirely. We are in this situation because we (they) thought that what worked in the past would surely work in the future. If it was good enough then, it’s good enough now. Needless to say, watching did not make me feel very encouraged about the future of metro Detroit. Does anybody here, in any leadership position, with any power, or with money, get it yet? Do they understand the real issues? Do they know what it’s going to take to bring people back, or to make them stay?

I recently got to thinking about freelancing, why I and others do it, and what it means for cities like Detroit. An article on Business Week’s website titled, Beware the Freelance Economy, discusses a recent trend in this country in which the share of business with no employees (freelance) has increased relative to traditional employee businesses. The author contends that freelance businesses do not increase employment, nor create wealth. Furthermore the author believes that, “…people would be more productive in this part-time work if they did it as employees who were part of a bigger organization that could achieve scale economies…” He finishes up with a bit of a warning, and a general question as to why this trend is occurring.

Having been a full time freelancer, or self-employed individual as I liked to call it, for almost five years, and now a part time freelancer, I feel like responding to some of the points made in the article. I also think I have a pretty good answer for why this trend, that the author finds so troubling, is occurring. Being a fairly typical Gen Xer, I saw the Boomer Generation as missing out on so many important parts of life. I lacked direction, and questioned everything. The answer, “because that’s life…” or whatever, didn’t quite cut it for me. I saw a lot of, unnecessary in my mind, stress, and anger in the generation ahead of me as they strove for middle and upper management positions at large corporations that ultimately failed to offer the promised stability or loyalty that their employees seemed to give them.

This appeared to be the American Dream. Work 60 plus hours at a company that saw you as disposable, so you could own a couple of cars and a house in the suburbs. Along with that came dedicating your life to a corporate entity that often became more important than family, hours waiting in rush hour traffic, and generally mind numbing and unrewarding work. Like so many others though, as much as I despised the large corporate workplace, I found the need to make a decent living, have health insurance, and a desire to save some money for later in life. Working in bike shops, and the like wasn’t cutting it. After college graduation I bounced between “real” jobs like accounting, and fun jobs like working in bike shops. The real jobs left me feeling unfulfilled. I worked hard at them, and was often recognized by my employers as a top employee, yet they did little for my soul. Working in the bike shop, on the other hand, allowed me to introduce people to an activity that could become a meaningful part of their lives. Often times the relationship between customers and employees turned into long term friendships in ways they rarely did in my “real” jobs.

During the almost five years of self-employment, I experienced unprecedented self motivation, and dedication to my work. Ownership, it turned out, was very important to me, as was actually being interested in what I did all day…every day. Furthermore the feeling of control, and the escape of the high school mentality of my “real” jobs, where employers cared more about when I came and went and less about what I actually accomplished, was rather nice. Self employment comes with it’s own set of headaches, but what job or career doesn’t?

Now, almost everyone I know is self-employed or a part time freelancer. We all do multiple things with our lives. Dedication to the big corporation isn’t as appealing, doesn’t seem to offer what it used to, and certainly isn’t the end all, be all of most people’s lives. Personal growth and satisfaction seem to be as important as money these days. And while a part time job at Starbucks may (this is arguable) contribute more to wealth and job creation than freelancing, it may not contribute more to self-fulfillment and personal growth. While the author, Scott Shane, may be a professor of entrepreneurial studies, most freelancers couldn’t care less about the National implications of their side businesses. They do it because they want to. They do it because they need to. And this is as it should be. As a country we should embrace this. If someone feels motivated enough to do work on the side, it should be encouraged. My freelancing earns me more money to me than a second job would, and employs me just as much. The additional money earned is put back into the economy when I go out to eat, go on vacation, or by a new bicycle. It’s money that wouldn’t have been spent with out the side work. And more importantly it’s fed my need for personally satisfying work, and has led to other career opportunities that I would not have had otherwise.

Finally, what does freelancing mean to cities like Detroit? And why should cities like Detroit embrace freelancing and self-employment? While most freelance work may never lead directly to larger, job producing companies, some will. Connections will be made, networks will grow, and the area can benefit directly from them. Portland, Oregon, is an example of a city that has, for many years, attracted freelancers, and many companies have been started by the self-employed joining together. Detroit currently has a low cost of living, allowing for freelancers to keep a low overhead while building their business. Most will never amount to more than that, but even if a few do, it will contribute to health of the economy and the reputation of the area. A good reputation for entrepreneurship, self-employment, and creativity will attract more of the same. The alternative is always relying on someone else to provide for employment opportunities. And as it stands right now, nobody seems to be stepping in to fill that need.

When the wall to your church collapses onto the sidewalk and street, there’s no need to stop holding services. With a pile of bricks and an i-beam laying across the sidewalk and into the street, the name of the church, the pastor, and the service schedule was simply painted on a once interior wall. As singing and sounds of “praise God…” blared from speakers of a church across the street, pedestrians walking along the sidewalk either climbed over the pile or walked into the street without so much as a pause to consider the somewhat strange  situation. It is a testament to what can be considered “normal” in the city of Detroit.

Learning to cope or what a career coach discovered in Detroit

The article  reinforces the importance of flexibility, and continual education for a successful career. For most, the days of learning something in school, or on the job, and applying it in one career for the rest of your life, are gone.

On the other hand, the recommendation for the church newsletter publisher to put together a portfolio and shop it around at creative Meetups, will likely lead to nothing. A brand new designer at a designer Meetup, will, at worst, meet other new designers with no work, and at best meet successful veterans who don’t have enough work. This is true in most places, and even more so in metro Detroit.

Happiest U.S. states are wealthy and tolerant

I didn’t find this surprising. It actually reinforced my preconceived notions. Unfortunately Michigan didn’t do too well in either category. And  it shows in the results, with Michigan ranking 41st in happiness.

The following quote from the article was particularly interesting: “Of the personality factors, neuroticism took a toll on a state’s cheery count, suggesting people living in the happiest states are more relaxed than their gloomy counterparts.”

From Wikipedia comes the following definition of neurosis:  “poor ability to adapt to one’s environment, an inability to change one’s life patterns, and the inability to develop a richer, more complex, more satisfying personality.”

Steven Rattner: Why we had to get rid of GM’s CEO

When Rick Wagoner was ousted from GM, many people came to his defense. There was anger. How dare a government appointed “czar” (Steven Rattner), with no automotive industry experience, fire GM’s CEO.  “What does the government know about running a car company?”, the defenders would say. I constantly heard how Rick was a “nice guy”. As if that matters. I like nice guys too, but Wagoner had proven his inability to turn GM around.

What does the government know about running a car company? Nothing. What did Rick Wagoner know about running a car company? I don’t know, but it was definitely time for a change. Don’t worry too much though, over his tenure at GM, Rick Wagoner made over $63 million, and left with a $20 million retirement package. Raise your hand if you’d like to lead a failing automotive company…

Clusters of Entrepreneurship 

There were a few points that immediately stood out in their relevance to the metro Detroit area, including the following:

“Economic growth is highly correlated with an abundance of small, entrepreneurial firms.”

“There is a remarkably strong correlation between smaller average firm size and subsequent employment growth due to start-ups.”

“Evidence does not support the view that regional differences in demand for entrepreneurship are responsible for these entrepreneurial clusters. Instead, the evidence suggests that spatial differences in the fixed costs of entrepreneurship and/or in the supply of entrepreneurs best explain cluster formation.”

Automobiles on Steroids

“If weight, horsepower, and torque were held at their 1980 levels, fuel economy for both passenger cars and light trucks could have increased by nearly 50 percent from 1980 to 2006. Instead, fuel economy actually increased by only 15 percent.”

Technology usually makes things more efficient, and cheaper. In the case of the Big Three, they made them less efficient and more expensive.

Slaying of murder witness in Detroit leaves trail of fear

There’s not much to say about this, other than those who feel that the suburbs don’t need to worry about the plight of the city are mistaken. The brutal murder occurred at a restaurant at 12 Mile and Telegraph Rd. The witness to that murder was gunned down before the trial.

Home Builders (You Heard That Right) Get a Gift

It’s great to see a Michigan company who played a large role in the collapse of the real estate market get $450 million in tax refunds. Guess who’ll get to pay for that? With “$1.5 billion in cash and cash equivalents on its balance sheet, according to its most recent financial statement”, it’s not like Pulte was in danger of shutting it’s doors any time soon.

Don’t call  him a Detroiter

A recent post on Time’s Detroit Blog about a letter written in response to a comment by George Jackson, in which he stated, “in a sense we are all Detroiters”, brought out some angry and emotional comments.

“When the city of Detroit begins to embrace the economic models that make great American cities, perhaps then the surrounding counties that are enjoying a modicum of economic success will consider aligning themselves with Detroit.” Unfortunately, modicum is the key word here.

Signs of Hope

Can energy be Michigan’s salvation? What the author, Bob Herber says is, “What we’ve lacked so far has been the courage, the will, to make it happen. ”

One of the recurring sentiments I get from metro Detroiters is not just a lacking will, but a belief that things don’t need to change. “V-8s are good damnit! We’re America!” V-8s are pretty cool…but, it’s old technology, and we need to start embracing the future in this state.

The entire area in which this house is located has been abandoned. Cement barricades block several of the streets, and large weeds, bushes, and even trees are growing through cracks in the pavement. Over the years I’ve visited this area many times, and have been chased by a pack of stray dogs, and had to drive around 20 foot high piles of toilets, and sinks. This time the overgrowth, mainly the tree of heaven (aka. ghetto palm), was almost completely obscuring several of the houses, and the grass was chest high.

Only a short distance away cars rushing from the suburbs to the city, and back again, pass by continuously. From the sunken Lodge Freeway, it’s almost easy to ignore the devestation, as often only the burned out rooftops are visible from the driver’s vantage point. This section of the city borders Highland Park, and has been particularly hard hit by population loss, unemployment, and abandonment.