Illinois: State Of Embarrassment

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Most critics of Barack Obama’s desultory performance the past three years trace it to his supposedly leftist ideology, lack of experience and even his personality quirks. But it would perhaps be more useful to look at the geography — of Chicago and the state of Illinois — that nurtured his career and shaped his approach to politics. Like with George W. Bush and Texas, this is a case where you can’t separate the man from the place.

The Chicago imprint on Obama is unmistakable. His closest advisors are almost all products of the Windy City’s machine politic: ConsigliereValerie Jarrett; his first chief of staff, now Chicago Mayor, Rahm Emanuel; and his current chief of staff, longtime Chicago hackster William Daley, scion of the Windy City’s longtime ruling family.

All these figures arose from a Chicago where corruption is so commonplace that it elicits winks, nods and even a kind of admiration. Since 1973, for example, 27 Chicago Aldermen have been convicted by U.S. Attorney of the Northern District of Illinois.

That culture of corruption affects the rest of the state as well. Both Gov. George Ryan (who served from 1999 to 2003 and  and his successor Ron Blagojevich have been convicted a major crimes. So have four of the state’s last eight governors. Blagojevich’s felonies are part and parcel of a political climate that also includes the also newly convicted  Antonin “Tony” Rezko, a real estate speculator and early key Obama backer, sentenced late last month to a ten-year prison sentence.

Crony capitalism constitutes the essential element of what the legendary columnist John Kass of the Chicago Tribune has labeled both the “Chicago way” and the “Illinois Combine”, not primarily an ideology-driven movement. The political system, he notes, “knows no party, only appetites.”

Just look at the special favors granted to vested interests while the state has imposed a 65% boost in income taxes for middle class citizens. Companies like Boeing and United, which have head offices in Chicago, get tax breaks and incentives, while everyone else pays the full fare. This game is still afoot.  Even as the state deficit persists, other big players such as the CME group, which operates the Chicago Mercantile Exchange, the Chicago Board of Options and Sears are threatening to leave unless their taxes are also lowered.

Thus it’s not surprising then that cronyism has become a hallmark of the Obama administration. Wall Street grandees, a key source of Obama campaign funders in 2008 and again now, have been treated to bailouts as well as monetary policies that have assured massive profits to the “too big to fail” crowed while devastating consumers and smaller banks.

The evolving scandal over “green jobs” — with huge loans handed out to faithful campaign contributors — epitomizes the special dealing that has become an art form in the system of Chicago and Illinois politics.  Beneficiaries include longtime Obama backers such as Goldman Sachs, Morgan Stanley and Google. Another scandal is building up around the telecom company LightSquared. This company, financed largely by key Obama donors, appears to have gained a leg up for a huge Pentagon contract due to White House pressure.

If the Chicago system had proven an economic success, perhaps we could excuse Obama for bringing it to the rest of us. Most of us would put up with a bit of corruption and special dealing if the results were strong economic and employment growth.

But the bare demographic and economic facts for both Chicago and Illinois reveal a stunning legacy of failure. Over the past decade, Illinois suffered the third highest loss of STEM (science, technology, engineering and math-related) jobs in the nation, barely beating out Delaware and Michigan. The rest of the job picture is also dismal: Over the past ten years, Illinois suffered the third largest loss of jobs of any state, losing over six percent of its employment.

The state’s demographic picture also is dismal. In the last decade, Illinois lost population not only to sunbelt states such as Texas and Florida but actually managed to have negative migration even with places like California and New York, net losers to virtually everywhere else. In fact, Illinois had a positive net migration with only one major state, Michigan.

Chicago and its Daley dictatorship has been much celebrated in the media – particularly after Obama’s election in everything from the liberal New Yorker to Fast Company, which named Chicago “city of the year” in 2008. The following year, the Windy City was deemed the best city for men by Askmen.com, for offering what it claimed was “the perfect balance between cosmopolitan and comfortable, combining all of the culture, entertainment and sophistication of an internationally renowned destination with an affordable lifestyle and down-to-earth work hard/play hard character.”

Well, you can make that case, unless you happen to be searching for a job. Over the past decade, “the Chicago way” has proven more adept at getting good coverage than creating employment for its residents. In NewGeography's last cities rankings greater Chicago ranked 41st out of the 51 largest metropolitan areas. Between 2001 and 2011 it actually lost jobs. Since 2007 the region has lost more jobs than Detroit, and more than twice as many as New York. It has lost about as many jobs – 250,000 – as up and comer Houston has gained.  In NewGeography's recent survey of high-tech growth, the Chicago region stood at a dismal 47th among the nation’s 51 largest metropolitan areas.

Overall, Chicago Loop Alliance reports that private sector employment in the Loop, the core of the Chicago downtown area, fell from 338,000 to 275,000 between 2000 and 2010. Chicago’s core has fallen further behind, in capturing high end employment than its traditional rival, New York.

This weak hand is also evident in the region’s strongly negative migration. According to the last Census, Chicago lost more than 200,000 people during the last decade. People are leaving the Chicago area not only for Sun Belt havens but to rising Midwest competitors like Indianapolis and Minneapolis, which offer better business climates, lower housing prices and cleaner governments, says local urban analyst Aaron Renn. Even perennial losers like Los Angeles and New York are net gainers with Chicago.

Given this economic and demographic track record, it’s no big surprise that the City of Chicago and the State of Illinois face enormous fiscal pressures. The city is facing a deficit of about $650 million and the state’s unfunded future liabilities are upwards of $160 billion. The  new taxes are on tap for state residents, according to Illinois Public Policy Institute, will cost the average Illinoisan a whole week’s earnings.

One might hope this disastrous record might make President Obama consider taking a different path to governing our country.  Yet sadly it appears that acknowledgement of failure is not part of the “Chicago way” — a denial that may cost us dearly in the years ahead.

This piece first appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Official White House Photo by Pete Souza.



















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Um, wrong person

In the 4th paragraph, you mention that Ron Blagojevich was George Ryan's successor at Governor. Rod Blagojevich is the person you're looking for (and who just got a 14 year sentence).

I have no idea who Ron Blagojevich might be, but I feel bad that his name is so similar to the guilty-and-convicted corrupt former governor.

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Chicago Voting Practices

Illinois has always been a ‘special’ place politically, especially Chicago. Those in the mid-west were raised to expect the usual shenanigans at election time and just thought it was the patriotic duty of the dead to vote. Chicago was particularly bad in that they would monitor how the voting was going state wide and then round up enough last minute voters to tip the balance.

The farmers down state finally got fed up with this game and started to hold back on reporting their vote counts until the very last minute…thus depriving Chicago of the ‘window of opportunity’ of a final surge of votes. After that, the politicos in charge just had to resort to stuffing the ballot boxes to win.

Illinois Corruption and Obama

Obama has always cultivated an "arm length" relationship with other Democrats (and Republicans) in Illinois. The local as well as national media has gone along with this whitewashing. Many STILL think he is squeaky clean, when in reality is just another in a long line of sleazy Illinois politicians. He is a product of the Chicago machine, and the reason for this administrations high level of corruption.

There is a reason why few Illinois politicians reach national office from either party. Illinois is become the Greece of the midwest. One of the reasons why the Democrats get away with this level of mischief in Illinois is due to the weakness of the Illinois Republican party. The one party system is particularly bad when that one party is the Democrat one.

My opinion is that

My opinion is that politicians shouldn't have any strings attached that connect them to corporations or corrupted people. I think that Aaron DelSignore agrees as well with this simple concept. Obama should be careful if he wants people to believe him.