Welcome to Pottersville (Chicago)


This post is by Jeff Carter from Points and Figures


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There was a gubernatorial election last fall in Illinois.  On Tuesday, Chicago voters go to the polls to elect a new mayor.  If our current mayor, Rahm Emanuel, was running he would not make the top two.  John Kass says to “Wake up Chicago” and on Tuesday I hope everyone is woke.

An aside, is it voter suppression to have an election at the end of February in Chicago when the weather is almost guaranteed to be bad?

If we look at the state, it’s in a financial mess.  We have had the same speaker of the house for over 40 years in Illinois.  The state has basically been run by Democrats and crony capitalist Republicans for my entire lifetime.  Governor Bruce Rauner was the only Republican that offered up out of the box changes, and he was bounced.

Websites like Wirepoints, Illinois Policy, Better Government Association

give you unbiased and pretty hard to read facts.

The issues confronting our state aren’t “social”.  They are fiscal.

I am not naive enough to think that any politician with any sort of power in Chicago or Illinois would implement policies I’d be 100% in favor of.  None of them are interested in free market capitalism, Coase, individual liberty or individual property rights.  Their mantra is “you didn’t build that”.

Our governor gave his budget address.  He used to be for fiscal responsibility, independent redistricting and reforms that would make sense.  Instead, what did we get?  More spending.  $15 minimum wage which will hurt poor people and people looking for a job.  Deeper and deeper in debt.  More taxes.  Progressive confiscatory income tax.  On everything.  Transfer of state assets to pensions which is really bad public policy.  Oh, and get this, instead of cutting budgets and reforming government; a bond issue to pay off the bonds and bills that are due.  That is a hyper-risky way to set policy and really puts the hammer on taxpayers.  But, it’s not like the folks in office even care nor do they understand financial concepts.  They are lawyers who are only interested in keeping and consolidating power.

The new wrinkle is they want to legalize pot, legalize sports gambling, and they project they can generate around $400MM in new revenue.  Our state pension problem is $240B.  This revenue is a drop in the bucket.

I am not against legalizing either, but the simple fact is revenue projections from public policy makers never ever hit their target.  They always miss on the low end.  New York state missed by over a couple billion.  These two changes also ignore the fact that they will probably hit the middle class and poor the hardest.  Yes, wealthy people gamble and may smoke pot but they can afford the repercussions should things go badly.  Others cannot and I am not for public services to remedy the problem.

This is not Trump’s fault.  It’s not the fault of the tax cut.  It’s the tax and spend politicians that have no regard for citizens.

In Chicago, there are four Democratic Machine candidates running for mayor.  Daley, Preckwinkle, Mendoza and Chico are so tied into the existing corrupt machine it’s amazing they poll well at all.  If you want change in Chicago and an end to the corruption, crony capitalism, dirty dealing, under the table deals, and all the dreck that comes with it you cannot vote for them.

On the other hand, not one aldermanic candidate nor other mayoral candidate has offered up realistic solutions to the $130B pension debt the city has.  When you ask them about a potential 401(k) solution there is radio silence.

Pensions are the elephant in the room at the state and city level.

Interestingly, everyone is against corruption now.  Where were they when it was going on before?  If they didn’t know about it they aren’t smart enough or intellectually curious enough to hold office and if they did know about it and didn’t say anything their character is not very good and they shouldn’t be there in the first place.

The financial returns on the assets of the pensions in the state and city are abysmal.

Chicago is losing 176 people per day, and the trickle is starting to become a creek.  If they tax retirement, tax mileage, put on a bag tax, install a progressive income tax, implement a commuter tax, increase the real estate transfer tax, implement a transaction tax, city income tax, asset taxes, the creek will become a flood.

I walk my dog in the park.  On many occasions lately, people who I don’t know and have never seen before ask me about local politics.  Everyone feels everyone else out to see if you are a government worker or not.  In the past couple of months, more and more people are telling me they are fed up.

I am too.

Progressive solutions and socialist solutions won’t work. Socialism only works at the tip of a spear and it’s responsible for millions of deaths in the 20th and in the 21st century.  Socialist solutions will cause more and more people to move away.  There are alternatives to Chicago and the state of Illinois.

Incumbent politicians will cite all the planned development in the city.  However, that only creates jobs for their cronies.  I am for development, but the way Chicago works the politicians get their hooks in and wet their beaks.  It’s not on the level.

Amazingly, the guy running for city treasurer got up after Amazon rebuffed NYC and proposed a robot tax.  If you care about the entrepreneurial community in Chicago, you cannot vote for people like this.  They will kill it.  Chicago didn’t make a list of top entrepreneurial cities in the world.  I was a bit surprised, but the data are the data.

I think the only thing you can do is vote for a person like Paul Vallas for mayor.  He’s not perfect but he’s not a Machine politician.  I know a lot of folks in the entrepreneurial community will back Neal Sales-Griffin.  He’s a good guy.  But, he’d be walking into a den of lions that he’s never faced before.  The probability of him being successful is low and given the stakes, you need someone who has been there before but isn’t beholden to the Machine.  It is not his time yet but someday it might be.  Vallas is the only sensible one if you are interested in busting the cycle of corruption that has existed in the city since the beginning of time.

I also think no matter who your alderman is, you vote for a non-incumbent so there is a runoff.  Competition is good.  It’s excellent for politics and we don’t have enough of it in this country.  With all the gerrymandering, we certainly don’t have it in Illinois.