Divine or Diabolical�By David Saint-Onge� This article is a re-printed from the�

April 2010� edition, as approved by the UP Business Today�

Which came first, the chicken or the egg?�This age-old metaphor has been bandied�about for everything from politics to econom-�ics to education to religion. Despite the topic,�this circular cause and consequence issue has�recently grown into a new phenomenon as the�current economic challenges of unemploy-�ment, reduced demand, production slow-�downs, and bankruptcies become increasingly�ingrained into our daily lives.�

If you ask them, people are scared. They see�Washington fighting for something that really�pays no immediate dividends to anyone.�They see their State government in disarray�with continued talk of lower revenue sharing�to municipalities and lower aid to K-12’s and�institutions of higher learning. Heck, now�there is talk of taxing the soda we drink and�the athletic events we attend. It’s crazy out�there and logic has nothing to do with it.�

Here in our local communities there is a grow-�ing sense of urgency to get it right and to get�it right now. Our collective ability to educate�our children, process our wastewater, protect�our citizens, and keep our communities vi-�brant and healthy is slipping away. State�revenue-sharing amounts are decreasing and�we are desperately trying to keep doing what�we do but with less money. Additionally, our�local tax money is shrinking as property val-�ues decline and businesses disappear. The�basic community services we have always�taken for granted are at-risk, and it’s time we�understand the severity of the issue.�

Here at home we need to truly consider the�consequences of America continuing to wal-�low through all of 2010. If you recall, many�economic pundits predicted the economy�would suffer through 2009 and into the early�part of 2010 before rebounding. But here we�are through the end of the first quarter of 2010�and not much has been resolved. Unemploy-�ment remains high, capital is tough to come�by, and we’re arguing about universal health-�care. With all this baggage, it may be time for�all of us to start thinking out-of-the-box and�for municipalities, school districts, and even�businesses to consider consolidating opera-�tions. If we don’t, we may find many will�simply vanish.�

For those who only want what they already�have and are not interested in thinking new�

thoughts, the only way for us to continue to�enjoy the public services we currently enjoy is�for States and the Federal government to raise�taxes and/or debt. This approach has ramifi-�cations. As I have argued, the State of Mich-�igan cannot tax itself to solvency. This is a�logical statement so perhaps I should explain.�As Michigan struggles to reinvent itself, its�revenues (taxes) have fallen sharply and its�costs have risen extraordinarily. The loss of�jobs, the demise of businesses, and citizens�hoarding their money are all causal effects.�Likewise, as unemployment remains high so�does the cost to aid workers with unemploy-�ment benefits. Furthermore, since govern-�ment is people helping people, the public�sector is inevitably slow at recognizing what�the private sector knows all too well; you�cannot keep staffers you cannot afford. In�short, it may be some considerable time be-�fore the State of Michigan coffers are flush�with cash, consequently revenue-sharing will�most likely continue to decline despite our�best hopes.�

So in essence what comes first, economic�upticks that allow workers to go back to work�and businesses to expand, or do we tax every-�one who is working more because more work-�ers are not working? The chicken or the egg,�that is the question.�

The ultimate way to heal what ails a strug-�gling economy is to support businesses.�Small business is the economic engine that�will allow us to recover our economy. Busi-�nesses will do business where they can pros-�per. Business needs an environment of�certainty to be profitable. Profits are then�used to invest in new technology, employee�compensation and training, and necessary�infrastructure. If you give businesses these�opportunities they will stimulate and move�the economy forward.�

In a recent study conducted by CNBC, all 50�states were evaluated on the criteria for busi-�ness growth and sustainability. In the order of�priority (not my order but theirs), the criteria�from high to low included:�

• Cost of Doing Business�• Workforce�• Quality of Life�• Economy�• Transportation and Infrastructure�

• Technology & Innovation�• Education�• Business Friendliness�• Access to Capital�• Cost of Living�

Michigan ranked 41st overall, scoring the�highest in Technology and Innovation and the�lowest in Economy. This overall ranking�does not bode well for us at the local level�because if the State cannot help itself, how�will it help us?�

In a recent article by Cindy Perman published�on CNBC entitled “What Do You Do with�Detroit? Bulldoze It?” perhaps the answer for�some is extreme. Apparently Detroit Mayor�Dave Bing is working on a plan that would�reconstitute select areas of the City into farm-�land. Yes, farmland. The notion is the most�desolate areas of the City are, for all intents�and purposes, being abandoned. By bulldoz-�ing these areas it will allow area residents to�relocate to stronger neighborhoods and would�give the City a chance to grow again.�

According to the article, “Things that were�unthinkable are now becoming thinkable,”�James W. Hughes, dean of the School of�Planning and Public Policy at Rutgers Univer-�sity, told the Associated Press. “There is now�a realization that past glories are never going�to be recaptured. Some people probably don’t�accept that but that is the reality,” he said.�

As we all struggle to cope with an ever-chang-�ing economic landscape one thing is sure,�change is the norm. For local economies to�maintain some semblance of service similar to�what we’ve enjoyed for many years we need�to consider alternatives, no matter how diffi-�cult or inconvenient they may be. Such pro-�posals, when considered, evaluated and�presented for discussion by politicians, school�board superintendents, university presidents,�and municipalities, are neither divine nor dia-�bolical, they may simply be a variation of the�age-old metaphor - which comes first?�

By-line: David Saint-Onge is President and�Principal Strategist for Black Ink Assets�(www.blackinkassets.com), a business con-�sulting company that enhances organizational�performance, guides business growth, helps�businesses understand productive sustainabil-�ity, and serves business owners with effective�business exit strategy planning and imple-�mentation.�