Archive for the ‘economy’ Category

Apple River Fort State Historic Site last month in Elizabeth, Illinois, located in a county that has 18 reported cases of COVID-19 as of May 10, 2020.

By John Ruberry

Illinois has the wrong governor at the wrong time. 

Oh, I’m not talking about the political positions of Chicago Democrat J.B. Pritzker, the billionaire who was elected governor in 2018. 

Let’s first discuss how he was elected. Largely because of support of unions, who probably fell in love with his wallet, as well as the tacit support of the most powerful politician in Illinois, longtime state House speaker Michael Madigan, Pritzker won the Democratic gubernatorial primary. That’s quite ironic as the Pritzker family has had a troubled relationship with organized labor, starting with the Pritzker-owned Hyatt hotel chain

Pritzker largely self-funded his campaign. So did his hapless general election opponent, multi-millionaire Bruce Rauner. The one-term Republican achieved nothing as governor, other than get bested by Boss Madigan, the mother hen of Illinois’ pension bomb

Illinois’ shelter-in-place order in response to the coronavirus was eased a bit earlier this month. Golf courses, those germ cesspools, are now open. Dine-in restaurants, health clubs, hair salons and the like are closed. Nearly one million Illinoisans, including my wife and daughter, are newly out of work. 

When things get back to what we might call normal, many of businesses won’t be here anymore. Pritzker is a trust fund baby who has never had to worry about economic survival. I’m sure he’s had a few setbacks, but he could always reach into that perpetually-full cookie jar of a trust fund or his accounts in the Grand Cayman Islands. Contrast that situation to the husband and wife who met while working as servers at a restaurant twenty years ago, then saved their money and took out a second mortgage on their home to open their own restaurant. They’ve laid off their servers and bussers, and only half of their cooks kept their jobs. Revenue has plummeted. Taking a third mortgage out on their home to bail out their restaurant isn’t an option. So their dream business, their livelihood that supported children may have only one destiny. Closing down. And then they’ll have no choice but to declare bankruptcy. 

Pritzker doesn’t get it. 

Since the governor issued his shelter-in-place order nearly two months ago most state offices were shuttered. Yet every state employee is being paid. Let’s zoom in on Illinois’ secretary of state office, which is mainly what other places call the DMV. Driver’s licenses aren’t being issued or renewed, the same goes with license plates, unless, with the latter, you are buying a car as most car dealers in Illinois have the ability to provide at the very least temporary state tags. 

Why haven’t state employees like these been laid off? Union rules just might prohibit that but we are told by Pritzker that Illinois is facing an emergency. I’m sure if he wanted to he’d find a state law to justify layoffs. But Pritzker couldn’t simply buy the governor’s office two years ago, he needed votes to win and unions supply lots of voters. And Pritzker, who is not the most dynamic campaigner–he comes across as an arrogant jerk because he is one–will need labor support again if he chooses to run for reelection. 

Sales tax revenue is of course way down in Illinois. Because of that and the state’s mountain of unpaid bills and its appallingly-underfunded public worker pension plans, last month Fitch lowered Illinois’ bond to one level above junk

Unlike its governor, Illinois has no trust fund to bail it out nor does it have bank accounts in the Grand Caymans. Courtesy of Boss Madigan Illinois hasn’t had a rainy day fund for years. 

Pritzker is facing several lawsuits challenging his shelter-in-place order. But his wife violated that order by leaving the state for the refuge of their Florida equestrian estate, in the manner of a medieval royal escaping a plague. 

It’s good to be king. It’s better to be a billionaire living off a trust fund who can use that cash to be elected governor and then lecture people like me as to how I should live my life. He’s been doing so in his daily press briefings on live television that pre-empt talk shows and soap operas. What fun! The Great Oz has spoken!

Rural Illinois has been particularly devastated by Pritzker’s shutdown. Many Illinois counties have fewer than ten reported cases of COVID-19. Three of them have none. 

With great fanfare and expense–$65 million–Pritzker transformed Chicago’s cavernous McCormick Place Convention Center into a hospital because he told us our existing hospitals would be overwhelmed by the coronavirus and there’d be no more hospital beds. After treating 37 patients the McCormick Place hospital closed down. Pritzker took bad advice from so-called experts.

Whether the shelter-in-place order in Illinois and other states worked–or perhaps it was never needed–the lockdowns need to end, with exceptions such as preventing visitors at places with vulnerable people, such as nursing homes. Densely populated cities such as New York and Boston–but not Chicago–probably need to keep up additional protections against COVID-19.

As I wrote a few weeks ago here, a new epidemic is coming. Perhaps it’s here already. One consisting of addiction, spouse and child abuse, and suicide. Economic hardship often brings out the worst in people. 

John Ruberry regularly blogs at Marathon Pundit.

Blogger two years ago

By John Ruberry

“As a result, Illinois government is a massive retirement system that, during work hours, also offers some services.” Chicago Tribune Editorial Board in 2016.

“You never let a serious crisis go to waste.” Rahm Emanuel in 2009.

Last week the president of the Illinois state Senate, Don Harmon (D-Oak Park), sent a letter the state congressional caucus, a gerrymandered lot–more on that latter–asking for $41 billion in aid in response to the COVID-19 outbreak.

The devil is in the details–Illinois is a hellish place—and in that letter from Harmon is a request of $10 billion to fund its woefully-underfinanced public pension plans.

Illinois’ pension crisis goes back decades. In 1989 Governor Jim Thompson, a Republican, signed into law an annual compounded three-percent cost-of-living-adjustment for the state’s public pensioners. But the funding wasn’t there. His successor, Jim Edgar, another Republican, seemingly placed a fix into the system in 1994, “the Edgar ramp,” which started with low payments for the 15 years of his plan. But by that time, when the “ramp” was to kick in, Great Recession arrived. And there were “pension contribution holidays” before then. When the 2008 economic collapse hit Rod Blagojevich, who was as bad as math as Edgar and Thompson, was governor.

In the early 1990s pension payments consumed four percent of the Illinois budget–now it’s 25 percent. The state-controlled public pension plans are only about 30 percent funded.

All that time–except for two years–powerful Chicago Democrat, Michael Madigan, has been speaker of the state House.

According to the Illinois Policy Institute, 19,000 state pensioners collect more than $100,000 annually. On average these pensioners paid a paltry $160,000 into their retirement plans. What a great deal!

New Jersey and Kentucky have public pension funding issues that are as bad, or perhaps slightly worse, than that of Illinois. Will they be asking for pension bailouts next?

Cutting the three-percent COLA has been tried–it was ruled unconstitutional in a unanimous decision by the Illinois Supreme Court because of the pension guarantee clause in the state constitution. Repealing that clause is the smart thing to do but it’s a politically tall hurdle. Such an amendment would likely have to pass both chambers of the General Assembly. Thanks to Madigan, a skilled gerrymanderer who is also the chairman of the state Democratic Party, there are Dem supermajorities in both chambers. Two attempts by petition to effectively ban gerrymandering by way of a constitutional amendment was struck down in court. Allies of Madigan were behind the anti-Fair Map suits. The petition process to amend the Illinois constitution is deeply flawed. 

The organized labor wing of the Democratic Party, the public sector unions, won’t remain quiet if pensions are challenged. Hey there unions, you contributed to this problem too. In 2005 most public service unions signed on to that year’s pension holiday.

Last week Fitch lowered its bond rating for Illinois to BBB- with a negative outlook. That’s one level above junk.

I’m against an Illinois pension bailout by the federal government. For the most part. But if such aid comes in the form of an International Monetary Fund-style rescue package with conditions that Illinois cleans its fiscal house, such as dropping the 3-percent COLA and taking aim at the top pension earners, those six-figure retirees, I’m willing to listen. 

But receivership is best. Okay, let me dream a bit. As Chicago architect Daniel Burnham said a century ago, “Make no little plans; they have no magic to stir men’s blood.” I know, states are viewed as sovereign entities and cannot, as Detroit did in 2013, declare bankruptcy. But what if Illinois agrees to a strings-attached receivership deal? An emergency manager can be appointed. Pritzker, or whoever is governor if receivership comes about, can still handle the ceremonial stuff, such as ribbon cutting for a new bridge and placing bets with other governors when Chicago sports teams are playing for a league championship.

Oh, I’m thinking loans from the feds, not handouts.

As badly funded as Illinois’ pension plans are, many local government pension systems are in worse shape. Illinois municipalities and government agencies, unlike those in Michigan, cannot do so under current state law. That needs to change too.

On a personal note, several friends and relatives of mine are collecting state pensions. Money that was taken from their checks every two weeks for their retirement was instead spent on lord-knows-what. They deserve to be angry and that fury needs to be directed at every Illinois governor from Thompson through Blagojevich. And of course at the Where’s Waldo of Illinois failure, Boss Michael Madigan. He deserves the most rage.

Let me be clear: I don’t take my pension reform views lightly.

Prior to Harmon’s bailout request, the latest pension fix idea was a constitutional amendment to eliminate the Illinois flat income tax guarantee and replace it with a graduated one. That amendment will be presented to Prairie State voters in November. My guess is that it will fail. And even if the graduated income tax amendment passes, the additional revenue won’t be enough. Illinois, which has had negative population growth for six straight years, can’t tax its way of the mess.

John Ruberry regularly blogs from Illinois at Marathon Pundit

It’s time for the lastest edition of DaTechGuy’s Friday Morning Court now permanently moved to 9:30 AM EST on Friday’s

Today’s topics

  1. MSM Reade or not?
  2. Trump the Man with an Opening Plan
  3. WHO are you fooling?
  4. and misc including Catching Mike Trout and product placement

You can watch the livestream here starting a 9:30 AM EST

Remember this is completely a tip jar operation we’re looking to pick up an extra $180 a month via dapodcast we need another $135 for April so if you like what you see consider hitting DaTipjar and if you’re not in a position to then like the video or spread it around and subscribe as I’m a few hundred Youtube subscribers away from qualifying for ad cash on the channel.

On today’s Podcast we revisit the story of Brer Trump Brer Donkey and the Corona briar patch talk about the odds in election 2020, give a bit of proof of scripture on Easter Sunday/Monday talk opening the economy or not and cover a few odd stories that I missed.

The livestream starts at Midnight you can watch it here

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