Fire Sale in the Chicago!

Great Chicago Fire

Written by Luke Hamilton

Did Mrs. O’Leary’s cow kick over another lantern??

Why are residents and businesses streaming out of Illinois in alarming numbers? Over the past several years, dozens of companies have left Illinois; either shifting corporate HQ to more favorable tax climates or moving the entire company itself. Organizations like Jelly Belly, OfficeMax, Baxter International, Jimmy John’s,, Hostess Brands, Sony Biotechnology, and State Farm Insurance have moved out of the state or have announced their intention to do so in the near future. These companies are fleeing to places like Wisconsin, Indiana, Tennessee, and Texas; states which are relatively-close with robust fiscal forecasts and much lighter tax burdens. Illinois has lost 640,000 jobs in the past 14 years.

The ripple effect of such drastic downsizing is that between 1995 and 2009, an estimated $26,000,000,000 in taxable revenue left the state. That’s enough to make the most hardened politician shed a tear.

But it’s not just companies who are leaving. A Gallup poll taken in April 2014 showed that Illinois leads the nation in citizens who want to leave their state, with 50 percent of Illinoisans answering in the affirmative. According to the most recent IRS figures, between 1995 and 2010 an estimated 850,000 Illinoisans moved to other states. This number is net of arrival/departures, so that means the actual number of departures is even higher. Of course the relevant question is: Why?

Chicago has quite a lot to offer. World-class restaurants, blues and jazz musicians which are the envy of music fans across the globe, five professional sports teams (actually four, since the Cubs haven’t fielded a professional-grade team yet this season), nationally-recognized theatrical performers and artists, and a continuous mile of stores in the heart of downtown. Chicago is also famous for being the birthplace of the Second City comedy troupe and the creation of long-form improvisational comedy. It sports one of the most picturesque skylines in the world and features dozens of scrupulous politicians who work tirelessly for their constituents. (Erm… that last one didn’t sound quite right…).

Of course the obvious truth is that residents and businesses are fleeing Illinois because the political climate is enervating. The Illinois General Assembly is controlled by an old-school Democratic Machine politician who has set up his own private fiefdom in Springfield over the past 25 years and the state itself is steered by a feckless Governor who’s managed to avoid any memorable accomplishments during his two terms apart from being Not Rod Blagojevich. The entire state is held hostage by Cook County and Chicago, and much like the Arabian strongmen who kept peace in their Middle Eastern countries until recently, “Da Mare” Richard Daley ruled Chicago with an iron fist and kept the City That Works working. Rahm’s reign has been much less effective.

Instead of a smooth transition from the Daley dynasty to the Emmanuel dynasty, there’s now a rumor of a challenger to the throne. Karen Lewis, head of the Chicago Teachers’ Union, is close to announcing her bid for mayor. Given the fact that Rahm enjoys nothing but rancor from Big Labor, Lewis’ candidacy would give union members someone to rally behind.

lewisSo the state will either be run into the ground by a dictatorial ex-ballerina with a Napoleon complex or an amorphous, bellicose Socialist with the money and the muscle of national unions behind her. The clash between Rahm and Lewis is ultimately to determine whether the traditional Chicago Machine model will live to fight another campaign, or if it will be deposed by the bacterial infection which killed Motor City.

So why does this matter after all? It is important to pay attention to the social bellwethers and emerging trends in our culture in order to predict the landscape of the future. As this column has previous mentioned, observe Detroit. Yes, the collapse of a once-great American city is sad, but what it teaches us is the awful price which accompanies parasitic labor unions, working in combination with corrupt politicians. Thus far, Chicago has avoided Detroit’s fate, despite being plagued herself with labor unions and corrupt politicians. But the Windy City operates on a slightly different model of politics from Detroit. The power struggle in Chicago does not hinge on labor contracts, but instead around the Machine’s purchase of political influence, with the juiciest pork pieces going to those closest to the throne.

Chicago was Crony Capitalism before the phrase became popular. It’s a bit different from Crony Socialism in that wealth continues to be created in a capitalist society. In a crony-capitalist society, more of the wealth goes to those who make the rules (and those who fund those who make the rules) than the rest of the population, whereas in a crony-socialist environment there is no wealth creation just redistribution of an ever-decreasing pile of government cheese.

To the degree that other cities and states have adopted the Progressive pairing of Commercial and Governmental bedfellows, they can expect to follow the lead of Chicago and all of its departing citizens. It follows that more crony capitalists will attract more professional politicians who will draft more legislation to increase their political heft which will cripple free-market forces and will lead to decreased prosperity and increased inflation, requiring the elevation of corporate and private tax rates which unfailingly lead to the decimation of the job market in just a few short years.

It’s a good thing that Chicago is the Windy City because it will need something which will serve to clear out the tumbleweeds left behind by an extinct private sector. Sweet Home Chicago is quickly becoming a Money Pit of drastic proportions.