Vote Buying And Pandering

That's JB Pritzker

If you bought the story that JB Pritzker was some sort of genius businessman like Donald Trump, I have a bridge in Brooklyn to sell you. Donald Trump’s father was a small time real estate guy. Trump built a multi-billion-dollar business. JB’s grandfather built a multi-billion-dollar hotel chain. JB surfed. He wasn’t born on third base. He was born in the dugout watching other people play.

Donald Trump likes to chide him and say he was such a bad businessman that the family wanted him to run for political office.

JB just signed the life of every Illinois taxpayer away.

If you have been paying attention at all, you know that blue state finances are not nearly as good as red state finances. As the population ages and as businesses calculate the costs of operating in blue states, they leave for red states. It’s a trend that has been going on for the better part of a decade now. If you read publications like Wirepoints or Illinois Policy, this is not a surprise.

Taxes in blue states are far higher. California tries to say its tax burden is less than Texas's, but it isn’t. Property taxes are the only place Cali wins, and that’s because the property tax scheme in Cali screws up the housing market. I remember when I moved to Nevada, people in Illinois told me to watch out for high sales taxes, but my rate in Chicago was 10.25% and my rate in Nevada is 8.25%.

Blue state political officials will try and find believable excuses for the flight. They will shade the statistics and try to cover it up. In places like California or New York, where the population is significantly larger than in Illinois, it is easier to cover up. Besides, with Hollywood, Silicon Valley, and Wall Street, both of those states have centers of opportunity and hope where a person can make a billion dollars even if they aren’t from there. Hence, they are attractive.

During Covid, due to the draconian laws California put in place, a lot of Silicon Valley started to migrate out to places like Austin, Texas, and Miami, Florida. But, it was a trickle and no big, huge move came. It’s just too hard to move that entire tech network.

LA doesn’t film in LA anymore. But production, financing, and the network are still in LA. Film could move, but hasn’t yet. But, it’s probably the easiest one to move out of the three cities. In the early 1900s, it moved from Chicago to LA. Mostly because of the weather.

Taxes are a consideration for people and companies, but for companies, it’s simply a lot harder to pick up sticks and move. Not only are there physical supply chains and human knowledge networks that have to move, but there are fixed costs and infrastructure that could be hard to replicate in another place. This is one reason why Trump’s tariff programs could be especially taxing. Companies will have a hard time moving production out of China to somewhere else.

What did Pritzker do that will make him the most damaging politician in Illinois history? There is a litany of things he has already done on social issues, like transgender. However, last week, he signed a “pension sweetener” for fire and police people. He’s going to hide behind the “we need fire and police people” line. Not too many people would argue with that. But, truth be told, fire and police people weren’t actively voting Democratic over the past few elections, and Pritzker is simply trying to buy votes.

Pritzker has also locked horns occasionally with Chicago’s Marxist Mayor Johnson. Pritzker needed to give him a W on this issue, and he perceives he gets a W too.

The city of Chicago and the state of Illinois have had pension troubles for years, thanks to the deal Republican Governor Jim Edgar (Combine) made with now-convicted felon Democratic Speaker of the House Michael Madigan. It sealed the fate of Illinois taxpayers and put them six feet under ground.

I was at a Chicago Economic Club lunch in 2007 when I first became acutely aware of it. There was a way out then. However, at that lunch, a person stood up in the Q&A and asked about the “constitutionality” of the two public company CEO proposals. Clearly, he was a government operative.

Illinois Supreme Court Judge Anne Burke (Combine), and wife of convicted felon Democratic Alderman Ed Burke, put the nail in the coffin of the ballot initiative Illinois voters approved to reform pensions. From that point on, Illinois’ solution was a Tier 1 and a Tier 2 pension system based on seniority.

Pritzker blew that to pieces, and now every single public sector union will want the same deal. There is no way Pritzker won’t give it to them, and there is no way the Democratic supermajority won’t give it to them.

Illinois and Chicago have some of the worst-rated muni bonds in the US. I cannot fathom how the ratings agencies do not downgrade them to junk status now. That means even higher interest rates with even more covenants in the bonds, which fall directly on taxpayers. You are deceiving yourself if you think the response of all governments in Illinois will be to cut spending. It’s not happening.

Government in Illinois and the towns, counties, and cities of Illinois isn’t about governing. It’s about political patronage. Patronage allows politicians to stay in power and rule like dukes, lords, and kings over citizens. It allows them to decide where the money goes. Because they have the power of government at their fingertips, they can use the tip of the spear to enforce any decision they make, and people have to bend the knee to them.

I left Illinois in 2020. I had taken a lot of business risks during my life and made, then lost, then made money. I wasn’t going to let some bloodsucking government take it. For me, it came down to four choices: Nevada, Tennessee, Texas, and Florida. I think many Illinois people do the same math and come down to the same choices. Pretty easy to find a Bears, Hawks, Cubs, or White Sox bar in any of those states. There is a large number of Big 10 alums in my Las Vegas country club. They didn’t move for the weather.

I pulled this from Illinois Policy.

You won’t find any stories about this in the traditional Chicago media. If they do a story about it, they will accentuate the “other side” so they look unbiased, but they are biased. Chicago media’s meme shouldn’t be a typewriter or a microphone, but knee pads and a toothbrush.

People like Rahm Emanuel will say they are centrist, but when they had power and the opportunity to do something, they did nothing. They serve themselves, not taxpayers.

One reason Democrats needed Biden to get elected in 2020 was to bail out blue states with Covid and stimulus money. All those states squandered the money. No surprise there. They are counting on Congress to flip in 2026 to get the money flowing again, and will “work hard” (that means stealing) in 2028 to win the Presidency again.

Gee, I wonder where the billions wasted by Secretery of Transportation Pete Buttigieg actually went?

One solution is to vote Republican. But, Democrats would rather partner with a communist than vote Republican. Even if Republicans were to control every single office in a state like California, New York, or Illinois, the legacy problems are so severe it would be hard for them to change them.

At least in California and New York, you have centers of growth to build upon. In Illinois, there is nothing. Chicago is a wasteland for virtually every industry. Satellites are put there, not the main deal. Sure, Google has an office. But the center of gravity for Google is Silicon Valley.

Trading used to be a huge economic engine for Chicago. It sort of still is, though electronic trading changes it. You don’t have to be there to be there. If Chicago gets its wish and puts a transaction tax on trading, you can kiss all of that goodbye.

Chicago used to be an insurance center. Not anymore. All those companies were offshored or rolled up into other companies.

Chicago used to have a decent merger and acquisition sector. Not anymore. No investment banks of any size or depth are present there. It’s a middle market on down place.

Chicago used to have a good banking sector. There are no top ten banks headquartered in Chicago. Harris was bought by Canada’s BMO. Northern Trust’s business is mostly in LA. Chicago is simply a satellite.

Carl Sandberg wrote glowingly about Chicago back in the 1800s. “Hog butcher to the world,” etc. My friend Professor Donald Miller wrote the book “City of the Century” about Chicago. Nothing has culturally changed from Professor Miller’s book. The 1800 Republicans were as corrupt as the 1900/2000 Democrats.

Now, Chicago is an afterthought. It’s not on the minds or lips of the people who are the world’s leading thinkers. It is not a place you have to be. There is no center of gravity in Chicago. Logistical companies exist there purely because of geography, not by choice.

People live there because they have always lived there. Family ties pull them. It’s what they know. Midwesterners aren’t big risk takers, and to pick up sticks and move seems highly risky to them. In the US, people used to migrate en masse for opportunities. We don’t anymore because the social safety nets of the federal and state governments disincentivize movement for opportunities.

Given the state of government finances in Illinois, the city of Chicago, and the counties and other towns in Illinois, I don’t think it is a place you want to be now or in the future. Your property taxes will only go up since it is the personal piggy bank of politicians. Income taxes will eventually go up. Any fee associated with water, fire, or police will go higher. New taxes, like bag taxes or cloud taxes, will be invented and applied. Parking taxes, the taxes associated with owning a car, like a vehicle sticker, will go higher. Insurance rates will go up as they tax and increase minimum coverages. It is only a question of time before they tax services. No doubt, the exemption on income tax that retirees have will go away.

Only bankruptcy can solve the problem. Bankruptcy and reorganization could kill big government. But remember, in Illinois, big, corrupt government owns the court system. Remember Anne Burke? Any change will be a huge uphill fight, and is Illinois even worth fighting for? There is nothing there.

Addendum:

Just so you know, Illinois doesn’t allow for bankruptcy by LAW. So, how will it happen? In Harvey, bondholders reamortized the bonds. Only pressure valve is skyrocketing taxes. Also, there is always a “market” for muni debt since muni bond funds must be 100% invested. However, there is a price. A muni debt fund might only purchase a slice of Chicago or Illinois debt to assume some risk, but they will charge a high interest rate. The bulk of that fund will be invested in safer securities.

Another thing that will happen is Chicago will get permission from the state for a city income tax. It is a question of time before cities like Oak Park and Evanston do the same.