My Blog

Year: 2011

  • Wall Street Partying in Davos, We Suffer

    I realize this is not a local issue but I can’t help myself:

    JPMorgan Chase & Co.’s profits last year were the highest in the bank’s history, and Citigroup Inc. returned money to the U.S. Treasury and reported its first full- year profit since 2007.  Governments have so far opted against breaking up or levying extra taxes on banks deemed too big to fail, and the Basel Committee on Banking Supervision, which sets global financial-regulatory guidelines, isn’t requiring lenders to meet new capital standards until 2015.

    (Full story here.)

    Does anyone remember “to big to fail”?  So ya’think those “to big to fail” companies are bigger or smaller today than they were back in 2008?

    They’re all BIGGER!!

    So what are we doing about it?  Nothing.  Nothing at all.  Those “to big to fail” are making record profits while the rest of the country pinches pennies and struggles with massive unemployment and sliding home values.

    You and I, the taxpayer, have been sold a bill-of-goods, a bridge to nowhere.  We, our children, and our grandchildren will have to suffer the effects of our tax dollars going to bail-out these bankers for years to come.  But now they party in Davos likes it’s the 1980’s.

    Something is wrong here.  Very, very wrong.

  • SEC Launches Inquiry Into IL Pension Fund

    The Securities and Exchange Commission has launched an inquiry into public statements by Illinois officials about the state’s underfunded pension fund, the state’s governor’s office confirmed Monday night.

    (Full story here.)

    Well it’s official!  The Springfield cabal has so poisoned the well that now the SEC is asking questions.  We can only hope that they uncover what most of us already know and turn the investigation over the FBI.

    We’ve been lied to for so long on this pension debacle.  It’s going to get worse, much worse before it gets any better.  Don’t think so?

    All you state retirees: Do you really believe that your pension was in any way secured by those blow-off-the-roof income tax increases? All you hospitals and social services that are owed billions: Think that check will arrive soon?  …

    Truth is, you’ve been chumped. None of that is happening.

    Let’s do the simple math: The new revenues will produce $6.5 billion. That amount has to cover a $15 billion budget deficit. Failing a miracle of loaves and fishes, it won’t work.

    Billions in delinquent bills will remain unpaid. New borrowing of $8.75 billion was supposed to take care of that, but even Democrats didn’t have the stomach to swallow that one. Gov. Pat Quinn’s office said that the new taxes would “address” the backlog, which is bureaucrat-speak for “we don’t have a clue.” State Comptroller Judy Baar Topinka warns unpaid bills could double soon, even with the increases.

    (Full story here.)

    It is extremely important to realize that we’ve been sold down the river by the current politicians who refuse to stand up to union leadership.

    Locally, Da Mare — as in Mayor Daley — didn’t want any labor unrest before the Olympic nonsense so he granted big labor long term contracts.  No the taxpayer gets hit with the results.

    We have indebted our children and our grandchildren.  It is incumbent upon us to stand-up and scream like Howard Beale that we’re simply not going to take it anymore.

    We demand better.

  • Position on TIFs

    Well it took some doing, but I have completed my policy on TIFs.

    This is critically important to the sustainability of the city moving forward.  We cannot survive continuing to go further and further into debt year after year while our schools are failing and the TIF funds are growing bigger and bigger.  We need to assess what it would take to shut-down the TIFs, eliminate all of the overhead, take what is needed for debt service, and give the rest of the money back to the operations and schools budgets where it belongs.

    It’s worth pointing out that currently no one else running for alderman in the Second Ward is advancing such a position.  Alderman Fioretti and all the other candidates are taking the position that TIFs are necessary for development, which I so easily prove false.

    I’m waiting for the media to wake-up to this issue and begin asking the tough questions.  Hopefully someone will start soon… before it’s too late.

  • Bankruptcy an Option

    From yesterday’s NYT:

    Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.  …

    Unlike cities, the states are barred from seeking protection in federal bankruptcy court.  …

    But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

    (Full story here.)

    I said that bankruptcy should be an option in my response to the Chicago Tribune’s Ed. Board.  No one else but this on the table.

    More and more people are realizing that cities and states are under-water and that something must be done.  Bad management led to the collapse of GM.  Similar bad management has led to the collapse of Chicago and Illinois.  Why can’t we seek a similar remedy?

    It’s not going to be pretty; but neither is falling off the cliff like Detroit.

  • Unions Investment in Chicago (Elections)

    Four years ago, SEIU spent almost $2.5 million in Council races, spearheading a union effort that helped depose Daley allies like Madeline Haithcock, Shirley Coleman and Dorothy Tillman. Asked about the budget for this election, Balanoff said SEIU expects to be involved “at the same level as last time.” Total expenditures by SEIU and other labor groups, including the CFL, could top $4 million, union sources told the CNC.

    (Full story here.)

    Just ask yourself, why would unions spend $4 million of their members money on municipal elections?  Because it’s worth it.  They get an excellent return on their investment.

    The union makes millions in political donations and they get multiple millions in return.

    So who’s looking-out for the taxpayer?

  • Big Tax Hikes Result in Less Revenue

    Last year, voters in Oregon voted to raise taxes on the highest income earners in the state, giving Oregon the highest tax rates of any state in the nation. It hasn’t worked out too well for Oregonians, according to the Wall Street Journal:

    In 2009 the state legislature raised the tax rate to 10.8% on joint-filer income of between $250,000 and $500,000, and to 11% on income above $500,000.  …

    Congratulations. Instead of $180 million collected last year from the new tax, the state received $130 million. …

    One reason revenues are so low is that about one-quarter of the rich tax filers seem to have gone missing. The state expected 38,000 Oregonians to pay the higher tax, but only 28,000 did.

    (Full story here.)  Hat tip to SCC for the story.

    As Homer Simpson says, Doh!

    Again, I’ve written about this here and here.  People simply leave.  Those who do not understand the Laffer Curve will perish from it.

    And note, this does not happen with a bang.  This happens slowly, quietly, over time.  One middle class family moves to Evanston, then one to Riverside, and another to Elmhurst.  Pretty soon10% of the people paying the bills have left.  Those first on the bus get to pick the best seats.  The rest have a real problem.

    But we can stop this.  We just need to say “Enough!”

  • Wisconsin ‘Open for Business’

    Wisconsin is open for business. In these challenging economic times while Illinois is raising taxes, we are lowering them. On my first day in office I called a special session of the legislature, not in order to raise taxes, but to open Wisconsin for business. Already the legislature is taking up bills to provide tax relief to small businesses, to create a job-friendly legal environment, to lessen the regulations that stifle growth and to expand tax credits for companies that relocate here and grow here. Years ago Wisconsin had a tourism advertising campaign targeted to Illinois with the motto, ‘Escape to Wisconsin.’ Today we renew that call to Illinois businesses, ‘Escape to Wisconsin.’ You are welcome here. Our talented workforce stands ready to help you grow and prosper.

    —  Wisconsin Governor Scott Walker

    (Full story here.)

    Wow!  Thanks to the trifecta of stupidity known as Quinn, Madigan, and Cullerton we can begin to shed even more jobs from Illinois.

    Of course, we can’t really blame Quinn, he ran on the platform of raising taxes.  So it says more about us (and by us I mean the people, not including myself, who voted for him) than it does about him.

    Despite the fact that the state voted these people into office, we really, honestly, deserve better than this.

  • How to Really Save Education

    The cool indy magazine Fast Company has a huge spread on education called, plainly enough, How to Spend $100 Million to Really Save Education.

    Naturally not all of the ideas are fully baked.  It is Fast Company after all; it’s meant to be an article on the fringe, and on the fringe it is.  But at least it’s raising the ideas so we can talk about them.

    Let’s bring all these ideas forward and start talking about them.  Testing some over here and others over there.  What we know is that the current situation is not working.  So there is little to lose.

    We must being the fundamental reform of education.

  • Robbery using Pepper Spray (instead of handgun)

    Three men attempting to rob a Loop Old Navy store Tuesday by deploying pepper spray fled without stealing anything.

    Three men entered a retail store at 35 N. State St. about 7 p.m. and one of them deployed pepper spray or a similar chemical agent on three patrons in an attempted robbery, police News Affairs Officer Veejay Zala said.

    (Full story here.)

    I wouldn’t normally post this (it’s really just another crime in the city) but it goes with the story below, about guns not being the problem.

    Bad people will do what bad people do.  Should we read this story and demand a nation-wide ban on pepper spray?  Of course not, that’s not the answer.

    The answer is to demand a nationwide ban on criminals.  We need to enforce the laws we have on the books already regarding not just weapons but robbery, auto theft, assault, etc.  The Cook County Courts system must stop being a revolving door where criminals go in and out month after month.

    Until we get serious about crime, banning handguns, high-capacity magazines, pepper spray, knives, 2×4’s, is making it more difficult for law abiding people to protect themselves in a city that is short 2,500 police officers.

  • Daley: Giffords Tragedy Show Need for More Gun Laws

    Mayor Richard Daley expressed sadness and outrage in the wake of the Arizona shooting rampage, and said the incident is yet more evidence that stronger gun control is needed.  …

    “But unfortunately, events like this happen far too often in America. We have to come back with some common sense gun laws. I mean no one should have that type of weapon, that kind of magazine on the streets of America.”  …
    “It isn’t what your beliefs are, it’s basically access to guns . . . we have a killing machine going on because of guns,” he said.

    (Full story here.)

    I was waiting for the right time to respond to the Giffords tragedy and I guess this is it.

    First: Rep. Gabrielle Giffords did not deserve to be shot.  Let’s get that clear.  The situation is a national tragedy.  My heart goes out to not only the injured and their families, but everyone who was at the scene and has to live forever with that memory.  It must be brutal.

    Second: despite calls for civility for over 200 years, mudslinging is part of politics.  Free speech is the law of the land (thankfully) and the Supreme Court has ruled — many times ruled — that the solution to bad speech is more speech, not less.  You got a problem with someone you talk it out.  You do not shoot them.

    Now then, with that out of the way…

    Daley’s reaction, and the media’s reporting of the story as a whole, is itself abysmal and tragic.  Is this news?  Of course.  But this story is blown way out of proportion.

    First: Daley’s quote,  “It isn’t what your beliefs are, it’s basically access to guns . . . we have a killing machine going on because of guns,” shows just how dumb this guy really is.   This event occurred because of guns about as much as DUI’s occur because of cars.  If this lunatic drove a van full of explosives into the crowd and went boom would the mayor want to ban vans?  Of course not.  This event happened because of one thing, an evil man.

    Second:  Six people dead and 14 injured.  That happens nearly every week during the summer in Chicago.  Every week in June, July, August.  Over and over and over again.  Year in and year out.  And where is the national story, the outrage, the discussion by the talking heads?  Where’s the policy wonks talking about why and how to solve?  Why isn’t Dianne Sawyer on location in Lawndale interviewing survivors?

    A one time spree killing by a madman is going to happen from time to time.  Such events simply cannot be prevented.

    Another national tragedy is that we’re allowing hundreds of our youth, mostly African-American males, to be gunned down in the street and it receives little to no attention.  Either the media doesn’t care, or the society doesn’t care.  Either way it bodes badly for our city and for America.