CHRIS CHRISTIE AND CHUCK HAGEL NEED NOT APPLY

2/28/13

New Jersey Governor Chris Christie, long time champion of lean, efficient, and limited governance and stalwart opponent of pubic employee unions’ efforts to highjack state and local government, was, er, disinvited to something that calls itself, still with a straight face, the “Conservative Political Action Conference (“CPAC”).”  

Former Senator Chuck Hagel, a decorated Vietnam veteran and genuine war hero who favors a defense policy that defends and a foreign policy that cultivates foreign friends and encourages reason over hysteria, was confirmed as Secretary of Defense…but with only four votes from senators from the Republican Party, which still laughingly calls itself the conservative party.   See my 2/1/13 post JOHN McCAIN, CHUCK HAGEL, AND DEFERRING TO HISTORY, only the latest in a series of posts here and at the now defunct Rant Political that argued enthusiastically for Mr. Hagel’s confirmation.

What is going on in the “conservative movement” and the Republican Party?   Why are such good men with solid values, deep seated beliefs in the primacy of the people over their government, and optimism about and confidence in the American people (misplaced in yours truly’s opinion, but that is another issue) no longer welcome among the self-styled keepers of the conservative flame?

One “conservative” beef with Mr. Christie is that he, never a poltroonish type given to the hemming, hawing, and equivocating that characterizes most of the invited guests at CPAC, very clearly let it be known that he was fed up with Congress’s delay, or worse, in passing a relief package for his state of New Jersey and other areas affected by Super Storm Sandy.   Another complaint about Governor Christies is that he appeared too chummy with President Obama when the President toured New Jersey in the wake of Sandy.

Admittedly, the “Sandy relief” bill that emerged from Congress was a crummy bill.  It was loaded with provisions and spending that had little, if anything, to do with Sandy.   But that only reinforces Mr. Christies’s point.   The reason the bill took so long to, and almost didn’t, become law is because the Congressional popinjays insisted on seizing on the hardship of those affected by Sandy to get taxpayer money for their districts.   If they just passed a clean bill, relief would have gotten to the affected areas sooner and at a lower price.   But they didn’t pass such a clean bill.   And Mr. Christie realized that his constituents needed help right away.   He didn’t put Party ahead of his state and his job serving that state.  

And, yes, Mr. Christie was courteous toward Mr. Obama when the President visited Sandy ravaged New Jersey.   Since when is civility and gentlemanliness not a conservative value?    Does calling one’s self a “conservative” require that one be so consumed with hated for the president of another party that one treats that president with coolness, or contempt, when he is there to help in a time of need?   Is it a mark of honor and “true blueness,” if you will, to dump on the president of the United States, especially when he holds the key to getting relief to people who badly need it?   Mr. Christie has a job that makes him responsible for the welfare of the people of his state; unlike that of, say, Paul Ryan, a hero of the “conservative” movement, Mr. Christie’s job does not consist of preening for the cameras and assuming that the American people are badly in need of the type of wisdom that can only be gleaned from a lifetime of bloviating from Washington.   See my 1/26/13 post, PAUL RYAN:   MORE PAP AND PABULUM FROM THE MASTER OF HYPOCRISY.

Mr. Hagel’s unpardonable sin was finally seeing the light and opposing George Bush’s excellent adventure in Iraq that has already cost us billions of treasure and the incalculable value of thousands of American lives and will cost of us for generations not only in dollars but in enmity throughout the Arab and Muslim worlds and the legions of aspiring terrorists that will result.   Mr. Hagel also has the temerity to suggest that perhaps we think before going off on ill-considered crusades designed primarily to enrich those who bankroll the lifelong ego trips those who attend CPAC call careers.   (My words, not Mr. Hagel’s.  He is too circumspect to say the things that I can say.)   The War Party is now firmly in control of the foreign policy apparatus at the likes of CPAC and those who, like Mr. Hagel, favor a foreign policy grounded in the principles of limited government and careful consideration of national interests are no longer welcome.  CPAC’s view of the world can be summarized by the admonition to shoot first, aim later, and keep the campaign (?) cash flowing from the “defense” contractors.   Who needs a skunk like Mr. Hagel at such a wonderful garden party?

I’ve spent most of my life as a conservative.   That started to change as Ronald Reagan, after a pretty good start, decided that we could give ourselves goodies without paying for them and started us on the fiscal train wreck from which we are currently suffering.   The change picked up as the despicable George W. Bush decided that big government was just fine at home and was especially advisable overseas and that score settling, or who knows what, rather than national interests, should be the guiding light in foreign and military policy.   Now the banishment of Mr. Christie and Mr. Hagel, two of the few people in public life whom I respect and admire, has completed my metamorphosis.   Into what, I don’t know.   But if the people who find Messrs. Christie and Hagel so dyspeptic are “conservatives,” I know what I am not.

MR. SUNSHINE ON ROBIN KELLY, DEBBIE HALVORSON, AND THE ILLINOIS 2ND CONGRESSIONAL DISTRICT RESULTS

2/27/13

Lifelong bureaucrat and political hanger-on Robin Kelly won the Democratic primary, and effective election, in the race to succeed the disgraced Jesse Jackson, Jr. (See my 2/16/13 post, LET’S FINALLY TELL THE TRUTH ABOUT JESSE AND SANDI JACKSON)  in Illinois’ second Congressional District.  

Ms. Kelly campaigned almost exclusively on the issue of gun violence, despite the District’s other problems, including a foreclosure rate in its Chicago and suburban precincts that is the highest in the state.  Robin Kelly appears to really believe that we can “end the plague of gun violence” simply by passing more stringent gun laws.  (See my 2/24/13 post IT’S NOT GARRY McCARTHY’S FAULT.)  She won the race with the help of New York Mayor Michael Bloomberg’s pro-gun control USA PAC, which spent $2.2 million on pro-Kelly advertising.  She apparently successfully portrayed the race as a Davidic race against the Goliathine NRA, which stayed out of the race, though its Illinois affiliate did spend a relative pittance supporting one of her opponents, Debbie Halvorson.   (More on Ms. Halvorson below.)  Ms. Kelly also had the tacit support of Chicago Mayor Rahm Emanuel.   Unlike past great Chicago mayors, like Richard J. Daley and Tony Cermak, the last two have eschewed publicly supporting candidates in primaries, preferring to sneak around and maintain plausible deniability, but I digress.  Robin Kelly also has had problems with, er, sloppiness, similar to those of her two predecessors.   Her lackadaisical approach to the rules manifested itself primarily in recordkeeping when she unsuccessfully campaigned for State Treasurer when her time sheets showed that she was working…for the State Treasurer.  Ms. Kelly evidently has no problem with being paid, by you, while she campaigns for her next spot at the public trough.  

Ms. Kelly’s big victory (52% of the vote in a very crowded field) once again confirms the wisdom of one of yours truly’s idols, H.L. Mencken, who observed

“No one in this world, so far as I know—and I have researched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”

Perhaps the low turnout (15% in Chicago and suburban Cook) limits the reach of the application of this latest example of Mr. Mencken’s acuity of mind.   Then again, the low turnout may confirm Mr. Mencken’s astuteness, but I digress again.

Clearly, there were better candidates in the race.  Newly elected State Senator Napoleon Harris, who has actually done a few things in life beyond feeding at the public mammary gland, comes immediately to mind.  But he was only a minor candidate who dropped out rather early, and even the so-called major candidates never really had a chance once Michael Bloomberg came in with his money, Mayor Emanuel starting throwing his weight around (behind the scenes, of course) and Toi Hutchinson dropped out.  See my 2/18/12 piece,  2^ND CONGRESSIONAL DISTRICT PRIMARY IN ILLINOIS:  ROBIN KELLY-- BEFORE IT’S TOO LATE?

One of those candidates who never had a chance, though she basked in the delusion that she did, just as she basked in the delusion that she could have defeated Mr. Jackson in the 2012 primary, was former Congressperson and State Senator Debbie Halvorson, of whom I wrote extensively in my 2/18/12 post.   As a somewhat close observer of this race, I heard Ms. Halvorson speak a few times and read some of what she spoke.   If following this race did nothing else, it did explain quite a few things about Illinois politics to this long time observer of that curious and fascinating endeavor.   Ms. Halvorson was perhaps the least impressive candidate in the race, certainly the least impressive of the major candidates.   Watching Ms. Halvorson in action could almost lead one to the conclusion that the Democrats of the 2^nd District should be excused for nominating Robin Kelly, or at least were smart not to have nominated Ms. Halvorson.  Ms. Halvorson was once Majority Leader of the Illinois Senate!  O tempora, o mores!  That such an unimpressive candidate, shallow thinker, and reflexive flip-flopper could actually have been the Majority Leader of the Illinois Senate explains a lot about the sorry condition of the state of Illinois.

One final thing.  Now that Ms. Kelly has been effectively elected to Congress, we are already hearing about how a “new era” has broken out for the 2^nd District, that she will be “a breath of fresh air” and a source of “refreshing change” for the District.  

One would hope that the cheerleading media would refrains from such hagiography until we learn more about Robin Kelly, especially about how her aforementioned laxness of attitude concerning campaigning on the public dime might manifest itself once she gets to Washington.   Why?   Because we heard the same things about Jesse Jackson, Jr. when he replaced Mel Reynolds and we heard the same things about Mel Reynolds when he replaced Gus Savage in 1993.   Though Mr. Jackson did not share Mr. Reynolds weakness for pubescent girls, and Mr. Reynolds did not share Mr. Savage’s apparent anti-Semitism and strong distaste for those who did not share his racial background, Mr. Reynolds and Mr. Jackson were both moral pygmies who brought disgrace to their district, their city, their state, their country, and their families.   The initial breathless adulation did not pan out, and the hosanna choruses in the press that greeted both gentlemen wound up looking worse than foolish.  One would think the media cheerleaders would have the decency, or at least the good sense, to go easy on the bowing before Ms. Kelly until things develop a bit.  

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

CZAR BERNANKE’S DIKTAT: BONDS MUST BE RICH, STOCKS MUST BE CHEAP

2/26/13

As I’ve said on numerous occasions in the past, trying to discern the direction of the stock market, or any market, for that matter, is a fool’s errand.   One’s probability of being right is approximately 50%.   Years of toiling in the financial markets, as yours truly has done, might improve that probability to, say, 51%.   On the other hand, it might reduce that probability to, say, 49%.   As I told one of my fellow faculty members at a dinner at Elmhurst College last night, I’ve spent much of the last twenty years or so trading a small portion of my portfolio like a scalded dog.  The results have been no better, indeed, they’ve been worse, than the results I’ve achieved in the larger portion of my portfolio that is emotionlessly invested in a balanced portfolio of index and index like products.  The point is that, despite the millions, and probably billions, invested by the financial sector in trying to call markets, doing so is basically a crap shoot.   However, since those who populate the financial world, and especially the financial media, ceaselessly are flapping their jaws telling us which way stocks will go, doing so is great sport, and the opinions of these estimables are no better than mine, or yours, I will indulge in this rather pointless pursuit, not so much for the sake of direction as for illumination of a larger point.

Over the last few weeks, or months, really, pundit after pundit has been telling us that stocks are cheap because, with the 10 year treasury at 1.87% and corporate spreads tight, or at least not wide, where else is there to put one’s money?   In other words, stocks are cheap relative to bonds so we have to buy stocks.   But, with a Fed engineered bubble to end all bubbles in the bond market, EVERYTHING is cheap relative to bonds.   That they are cheap relative to a hideously inflated bond market is no reason to buy stocks.  

There are, of course, other reasons to buy stocks, but all those reasons have a counter.  Yes, profits are quite good…right now.   But it’s hard to see how they will stay good if the domestic economy remains moribund, China and Europe are having trouble, and consumers are getting hit with the double whammy of high gasoline prices and a big increase in the payroll tax in an environment still characterized by too much debt.   Then we have the potential political time bombs out of Europe and Washington.   How these balance out, no one knows.   But the only reason for buying stocks that is more or less unanimously agreed to is their cheapness relative to bonds.  And buying a house was cheaper than renting in 2007, or so it seemed.  The analogy is not perfect, but you get the point.

What is genuinely scary about the “stocks are cheap relative to bonds,” and the real point of this post, is not whether that argument is correct.  What’s really scary is that stocks have been made cheap relative to bonds as part of a conscious, deliberate, and relentless Fed policy to make stocks cheap relative to bonds.   The Fed has transcended its customary role as custodian of the nation’s monetary supply to become a kind of economic czar, determining what levels are appropriate for various asset classes, where capital should be directed, and what segments of the economy are worthy of the succor loose money can provide.   That a quasi-government agency has vested itself with so much power, with little or no resistance from the governing class, which is always eager to cast off responsibility, is what is truly frightening, and not only for the stock market, but for our financial system, our economy, and the very notion of a free market and a free society.

IT’S NOT GARRY McCARTHY’S FAULT

2/24/13

The Chicago City Council’s Black Caucus is starting to put pressure on Mayor Rahm Emanuel to fire Police Superintendent Garry McCarthy.   According to 21^st Ward Alderman Howard Brookins, chairman of the Caucus

“If things don’t change and we get closer to the election, I won’t be able to stop my members from calling for his (McCarthy’s) head because the public is calling for our heads.  The clock is ticking on all of us.”

One can understand the frustration of Chicago’s residents, especially those who live in the areas hardest hit by crimes.  In January alone, 42 murders were committed in Chicago, the most in over ten years.   This came after a 16% jump in homicides in 2012.   Those of us fortunate to live outside what might be called, without too much exaggeration, the killing zone are perhaps a bit scared by the crime wave in the city and embarrassed at what it is doing to our city’s international reputation.   But those who live in the most affected areas are outright terrified, and they are letting their aldermen know it.

Superintendent McCarthy makes a convenient scapegoat for the problems afflicting this once, but now only in the eyes of its most fervent friends, great city.   But the convenient thing is usually not the right thing, and this is especially true in this case.   The problems behind the homicides are way beyond the control of Garry McCarthy.   Three of those reasons, in increasing degree of depth, come immediately to mind.

--Chicago doesn’t have enough cops and all the shifting of assignments and other sleights of hand engaged in by Superintendent McCarthy and Mayor Emanuel cannot change the arithmetic.  More police are retiring than are entering the police academy.  We cannot increase the number of new officers because the city is broke.   Chicago is broke because Mayor Daley spent the city into oblivion with grandiose plans apparently designed primarily to enrich those closest to him and perhaps ancillarily to benefit the city.   The externals were taken care of; the city looks beautiful, or at least better than it used to, in most places.  But beneath the surface, the city was rotting.  That rot manifested itself not only in the city’s deteriorating infrastructure but also in the neglect of basic services, like hiring enough police officers.  

Mayor Emanuel has done nothing, other than the aforementioned shell games with police assignments, to remedy the problem.   While he insists he will not raise taxes, he has no qualms about raising other fees, such as water bills and more ancillary items.    But the revenue goes elsewhere…to infrastructure in the case of the water bill increases but also to such trendy piffles as something called Choose Chicago with its ambiguous mission of promoting tourism; see my 2/21/13 piece CHOOSE CHICAGO…OR CHOOSE MORE POLICE OFFICERS?   Garry McCarthy cannot hire more police officers; only Mayor Emanuel can hire more police officers.

Chicago still has a higher ratio of police officers to population than New York or Los Angeles.   This suggests that some long term reforms are needed in the deployment of manpower.   But that is a long term issue; the city has to address the crime problem NOW.

--While not enough people mention it, at least not openly, Mayor Daley’s grand plan to tear down the high rise CHA public housing projects did more to increase crime in the city and the suburbs than anything else in the last ten or twenty years.   Mr. Daley trumpeted this plan as a kind of humanitarian gesture, freeing people from the grip of the often crime-ridden, run-down replacement slums that were the CHA projects.  One suspects, though, that the people who benefited most were friends of the Mayor in the real estate world, who wanted for development what had become the prime locations on which the projects sat.   

Whatever the motives, and whether or not the former public housing residents benefited from having their CHA apartments replaced with Section 8 vouchers, there is no doubt that the spreading throughout the city and suburbs of the criminal element that made life so miserable in the projects exacerbated crime throughout the city.    Areas that had formerly had relatively little criminal activity, especially black middle class neighborhoods like Chatham, are now having horrendous crime problems.   And nothing has improved, indeed, things have gotten worse, in areas like Englewood that have had crime problems for decades now.

At least when the projects were up and operating, crime was, to some extent, isolated and concentrated and could be more easily controlled by focused police details.   Now that crime has spread throughout the city, it is much more difficult to track and counter.   We are talking unpleasant trade-offs here, but trade-offs that indeed exist and must be considered.

--The Reverend Jimmy Daniels, a Chicago pastor who supports Superintendent McCarthy, said

“I’m 100% behind the superintendent.  The problems are the parents…absent parents.  The (City Council Black) caucus and the ministers need to stop blaming the mayor and the police superintendent.   The gun alone doesn’t shoot people.  People shoot people.”

Some might be quick to reject out of hand what Mr. Daniels and prefer to attack him as a pawn of the Mayor.  Yours truly thinks he might be too quick to exonerate the Mayor.  But all of us would do well to consider the wisdom of what Reverend Daniels is saying; when the family is broken, no politician or bureaucrat can have much impact on the problems that result.  

Scapegoating is easy.   When the team is losing, fire the coach.   When the business is losing money, fire the CEO.   When crime is up, fire the police superintendent.   But the appearance of action, in the form of scapegoating, often serves as a means of rationalizing not taking the much more difficult actions that have a chance of addressing the underlying problems.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

“BOY I WISH WE HAD ONE OF THOSE (JACK LEW) MACHINES!”

2/22/13

The Wall Street Journal has almost caught up to Mighty Quinn on Politics and Money (“MQPM”) in this morning’s very clever and insightful lead editorial on Jack Lew entitled “Forrest Gump at Treasury.”  See my 2/12/13 post JACK LEW’S LUCRATIVE SABBATICAL AND THE ENVY OF THE GOVERNING CLASS for the real story on Jack Lew’s apparently, but not really, difficult confirmation hearings for the big job at the Treasury.

The Journal recounts Mr. Lew’s various adventures at NYU, where he was paid more than the University’s president to be “executive vice-president for operations,” and at Citicorp, where no one seems to know what Mr. Lew did for an even more lucrative compensation package.   The Journal also mentions that Mr. Lew will get a pass from the Democrats for engaging in the types of conduct they normally find reprehensible…if engaged in by Republicans and big business types not purified by “public service.”   Such activities include opening Cayman Island bank accounts, receiving astronomical pay packages from bailed out institutions, accepting “kickbacks” for directing students to favored loan providers and generally making lots of money.   Most Democrats consider the last a cardinal sin if the money was not made in connection with some “higher pubic purpose.”   See my 2/20/13 post THE PRIVATE SECTOR’S ROLE IN “MODERN” CHICAGO:  SHUT UP AND PAY for examples of acceptable ways to make big money.

The Journal, however, never really gets to the major point concerning Mr. Lew.   If Mr. Lew, and his nominal inquisitors, were to be honest, they would all admit that what Mr. Lew was doing at NYU and at Citi had little or nothing to do with actual work.  What Mr. Lew was doing was selling the influence he had garnered through years of slopping at the public trough.   He was selling his ability to have his phone calls to Washington returned.   The titles he held were mere fluff and window dressing; he was a pol cashing in on his years of “public service.”   As such, he was following a proud tradition, indeed what is becoming a normal career path, for politicasters of both parties.   Rahm Emanuel, Frank Raines (indeed, the entire “management team” at Fannie Mae.  And we wonder why Fannie and Freddie Mac went belly up.   But I digress.), Dick Cheney, Gerald Ford…the list is too long to enumerate and is growing every day.

Since virtually every one of Mr. Lew’s inquisitors, on both sides of the aisle, either have or hope to follow Mr. Lew into a career of selling influence and calling it work “in the private sector,” they will furrow their eyebrows, cluck their tongues, and preen for the cameras.   But they will approve Mr. Lew’s nomination lest the light they throw shine back at them.

CHOOSE CHICAGO…OR CHOOSE MORE POLICE OFFICERS?

2/21/13

Mayor Rahm Emanuel today appeared before something called “Choose Chicago,” a group whose stated purpose is to promote tourism in the city of Chicago.   Promote tourism?  Talk about an open ended, vague, and incomprehensible mission, ideally suited to evading accountability and thus serving as a means for pols to shower dollars on their friends, toadies, and financial admirers!   But I digress.  The Mayor, at the end of his speech to the esteemed assemblage, announced that he was ordering the Department of Aviation to contribute another $5 million, on top of the $2 million the city has already given to Choose Chicago, to market Midway and O’Hare airports.

Surely, the Mayor knows as well as anyone that the city is broke and thus can’t be handing out money even to worthy causes, let alone to groups like Choose Chicago.   He thus stated that the $5mm for Choose Chicago, which is packed, in one way or the other, with the Mayor’s friends from the “private sector”   (See my 2/20/13 post, THE PRIVATE SECTOR’S ROLE IN “MODERN” CHICAGO:  SHUT UP AND PAY.), will come from nebulous “savings.”

Hmm…

Even assuming that these “savings” are somehow real, isn’t the point of saving money to save money, rather than spend it elsewhere, when one’s future budgets are swimming in red ink?   Rather than spending the money the city manages to save, perhaps it should instead NOT spend the money, lower its deficit, and thus reduce the amount of money it will have to borrow, or tax, in the future.  

Perhaps I am being uncharacteristically starry-eyed here in suggesting that politicians like Rahm Emanuel can actually exercise anything like fiscal discipline in any but the shortest of runs.   Perhaps I am being hopelessly naïve when I assume that Rahm Emanuel, or any pol, can avoid using the taxpayers’ money to pay back their friends in the “private sector” who do so much to advance the careers of those who strut and preen for the cameras for a living.   Let’s instead get realistic and assume that a pol will spend any nickel he can get his hands on; why save for the long run when one’s next election is at most only four years away?

So if Rahm Emanuel feels compelled to spend any “savings,” real or imaginary, and he really wants to promote tourism, why not put the $5mm he wants to spend on Choose Chicago into hiring more police officers?   Despite the Mayor’s, and Police Superintendent Garry McCarthy’s, vehement denials, Chicago’s growing and highly visible crime problem has to be having a desultory impact on Chicago tourism.  So rather than spending money on such trendy piffles as Choose Chicago, the Mayor could better promote tourism by making Chicago a safer place to visit.   Even $5mm, enough to hire a few more police officers, would be a good start.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

A SORT OF DEFENSE OF SANDI JACKSON

2/21/13

When we seek insight into the case of former Congressman Jesse Jackson, Jr. and his wife, former absentee Alderman Sandi Jackson, it is sometimes best to eschew the opinions of the journalists, the pols, and even the bloggers and take a look at what the people in Mr. Jackson’s district, and Ms. Jackson’s ward, are saying.   To that end, consider the opinion, as recorded on page 3 of the 2/21/13 Chicago Sun-Times, of Linda Wetherspoon, who is 54 years old and has lived in the 2^nd District, and (I think) the 7^th Ward since she was twenty:

“He (Mr. Jackson) knew better.   But I feel terrible for Sandi.  She’s a woman.  She’s a mother.  I’m not excusing her.  But they usually don’t charge both husband and wife, because of the kids…So I don’t think it’s right the feds charged Sandi.   They really had it in for the Jacksons.”

Regular, or even casual, readers of this blog know that I don’t “feel terrible” for Sandi Jackson and have less than no sympathy for her.   See, inter alia, my most recent post on l’affaire Jackson, 2/16/13’s LET’S FINALLY TELL THE TRUTH ABOUT JESSE AND SANDI JACKSON.   Yet I think Ms. Wetherspoon has a point.   The U.S. Attorney generally doesn’t charge both husband and wife.   The most glaring example of this is the case of the Rod and Patti Blagojevich.   Perhaps the lawyers know better, but it seems to the average citizen, and to those of us who follow these things very closely, that Patti was up to her neck in Rod’s schemes.   Look at all the real estate deals in which those who curried Rod’s favor, most notably Tony Rezko, used Patti as a co-listing agent and paid her big commissions in exchange for very little.  In fact, there was testimony that agents who had such listings, and did almost all the work, were pressured to put Patti on as a listing agent, and thus split their commissions with her, when she did little or nothing on the deals.   It seems that Patti Blagojevich served as little more than a conduit for funneling money to her husband, the congressman and later the governor.  

Perhaps Mrs. Blagojevich did nothing illegal and the suspicious commissions from friends of the governor only appeared to be as hinky as they did.   Maybe there wasn’t enough evidence to charge Mrs. Blagojevich with crimes while there was plenty of evidence to charge Mrs. Jackson.   Or maybe Mrs. Blagojevich was a hardworking real estate agent who earned every dime she earned and never used her connections to get a listing, the last being as likely as yours truly’s managing the triumphant campaign of the Blagojevich/Jackson ticket when these two emerge from the hoosegow and run as a team for the nation’s highest offices. 

For whatever reason, though, Patti Blagojevich was not even charged with a crime.   Yes, she has young children, but so does Sandi Jackson.   So why the disparity of treatment?  I don’t blame people like Ms. Wetherspoon for being more than little suspicious of the government’s motives.

In all likelihood, Sandi Jackson will do no time and will get off with the legal equivalent of a slap on the wrist, largely due to the “she is a woman with young children” argument.   Still, being charged with a felony is a big deal.   One wonders…why Sandi Jackson and not Patti Blagojevich?

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

THE PRIVATE SECTOR’S ROLE IN “MODERN” CHICAGO: SHUT UP AND PAY

2/20/13

Today’s (i.e., Wednesday’s, 2/20/13, page 2),Chicago Sun-Times reports

Mayor Rahm Emanuel is challenging a business community that bankrolled Millennium Park, the NATO summit, and Chicago’s failed Olympics bid to raise $50 million over five years for a higher moral purpose:  saving the lives of thousands of at risk kids.

“Emanuel is putting his formidable fund-raising skills to work to raise money for early intervention programs for younger kids….

This shake down of local businesses is only the latest illustration of the attitude of the mayor of Chicago, both this one and the last one, toward the “private sector” or the “business community.”   These mayors speak in hallowed tones when they utter the words “private sector,” but to them the “private sector” is only an appendage of the public sector, there to do the bidding of the politicians and to pick up the checks for the never ending self-aggrandizement these politicasters call “careers in public service.” One can almost understand Mayor Daley’s and Mayor Emanuel’s utter failure to understand the true role of the private sector in a free market political system; neither of these gentlemen had ever worked a legitimate job in the private sector prior to becoming mayor.  Selling one’s influence and calling it investment banking, by the way, is not a legitimate job.  Or perhaps their belief that the private sector exists only to do the bidding of the public sector arises from the growing reality that we no longer live in a free market system, but rather a perversion of that system in which nominally private big business and big government work as one to insure an ever tightening monopoly on the wealth a society produces.

How can one argue that “saving the lives of thousands of at risk kids” (It’s always “for the kids” or “for the children” isn’t it?) isn’t a worthy goal?   It’s easy to make such an argument, given the history of these ad hoc nonprofits that spring up to pilot something the Mayor and his cronies seem to want.   The money is raised and gets chewed up in the rat hole of bureaucracy.   And it always seems to be the same handful of politically connected players who are involved in such “civic endeavors.”   “The private sector” was pressured to finance the NATO summit and the G-8 conference.   The NATO summit went off reasonably well, but the G-8 never made it here.  There was plenty of shake down money left over after that summit that the Mayor is still using as a piggy bank for his cherished projects, like boat houses along the Chicago River.  The Olympic committee shook down local businesses for millions; we didn’t get the Olympics, but a lot of people got big salaries working at Chicago’s Olympic committee and they and others took lavish trips to promote our bid.   Millennium Park looks good now, but its luster wears off when one considers that it came in at whole number multiples of original cost estimates.   No problem, according to then Mayor Daley; we’ll just hit up the “private sector” for more dough.

If developing “intervention programs for younger kids,” whatever that means, is a worthy goal, why aren’t these types of endeavors financed with tax dollars?   Maybe because Chicago is broke and the taxpayers do not deem such programs sufficiently worthy to justify higher taxes.  So the Mayor extracts tribute from the “business community.”  To a certain extent, such giving is done from the goodness of the corporate hearts of those being “asked” to donate.  But local businesses have to be growing tired of the endless extortion racket that the mayors of Chicago call “public/private sector cooperation.”   Either that or the “donors” are being secretly paid back in city contracts or other consideration that comes out of the taxpayers’ pockets (See, for illustrative purposes, my 8/4/12 post on the now defunct Rant Political, TRUSTING THE CHICAGO POLITICIANS, reproduced below, for further illumination and speculation on such dealings.) or in simply being allowed to do business in Chicago without being harassed to an even greater extent by those who control both the bully pulpit and the enforcement mechanisms of the city and state.

Businesses that are operating here or considering operating here have plenty to discourage further investment in or relocation to Chicago:   high and increasing taxes, especially at the state level, a history of endemic corruption, still sub-par public schools, a crumbling infrastructure, a voracious and growing crime problem, even dyspeptic weather.   For the last twenty five years or so, they have to add “serving as the bottomless bursar for the career aspirations of the politicians who run the place” to the list of disagreeable traits Chicago displays for actual and potential investors.  This is no way to attract business to this once greatest of American cities…unless the Mayor and his minions are only interested in attracting businesses willing to play ball.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

TRUSTING THE CHICAGO POLITICIANS

8/4/12  

Like most cities, and especially like most cities in our industrial heartland, Chicago is having problems with its aging and often creaking infrastructure.   It seems that, over the years,  the public fisc has been exhausted by the types of things that pack the most potent payback for the pols, such as new parks, schools, streets, etc. and handouts for groups, such as officially and permanently aggrieved parties and billionaire owners of sports franchises, that compete for the title of most stentorian in making their demands of the politicians for the taxpayers’ money.   This has left little to maintain the old parks, schools, roads, bridges, etc., with the predictable consequences.

So back in the Spring, Chicago Mayor Rahm Emanuel’s plan for an “infrastructure trust” (“IT”) was approved by the pack of lap dogs we call a City Council in the city of my birth.   I first addressed the IT, before Rant Politics came into being, in one of my other blogs, The Insightful Pontificator; see my 4/18/12 post entitled “WHO YA GONNA TRUST; ME OR YOUR OWN EYES?”  The IT was rendered necessary, at least in the eyes of Mr. Emanuel and the mewing sheep who gaze ever lovingly into his eyes for their next order, because Chicago either can’t, due to the fiscal mess Mr. Emanuel’s predecessor, Richard M. Daley (“Richard II”) left the city, borrow any more money or at least can’t borrow money for the types of projects the IT is designed to finance.  

While we know that the IT is billed as “private/public partnership,” a term that, while sounding comforting to most of the populace, sounds more than vaguely Orwellian to yours truly, we know very little else about the workings of the IT, partially because details have yet to be worked out but partially, one suspects, because the Mayor and the participants in the IT would rather not have us know much about how this Goldbergian beast is to operate.   Even yours truly, who knows a thing or two about finance and financial structures, is confused about the IT.   Will the IT lend money to the city for various infrastructure projects?   Will the IT actually purchase assets, presumably to take advantage of the tax code’s depreciation provisions that are not available to municipalities that pay no federal income tax, and lease those assets back to the city?   In either case, the projects would go on the city’s books as debt, at least according to generally accepted accounting principles (“GAAP”).   As Alderman Jason Ervin said at the show hearings in the City Council for this monster, “It (the IT) looks a lot like debt,” to which Chicago CFO Lois Scott replied “You’re right.  It would be, in many ways, like debt.”  

So the reasonably financially cognizant, or even the merely concerned citizen, might ask why we need the IT if it is just a vehicle to lend money to the city that the city could otherwise not borrow.  Ms. Scott replies that

“The bulk of what the city is going to do in terms of infrastructure won’t have a ghost of a chance of going through an alternative source of financing.”

So why would the participant in the IT provide the city with such financing if conventional investors would not provide such financing?    One can think of three reasons.

First, the investors in the IT will demand, and justifiably so, outrageously high interest rates and/or lease payments to make a decent risk adjusted return on the financing no one else, according to Ms. Scott, will provide.  

Second, the investors in the IT will expect a return commensurate with the risk they are assuming, but not necessarily directly from these projects because doing so would make Rahm Emanuel look bad.   The Mayor would like to trumpet the IT as a “creative” way of doing infrastructure projects; to pay investors market rates would expose the IT for the batch of sweetheart deals it appears to be.   Better to hide from the taxpayers the IT’s juiciness for its investors by somehow nudging those investors to the head of the line for other projects the city is doing.

Third, the Mayor is bullying the “private sector” participants in this “public/private partnership” into taking a less than market return on their investments.   How, one might ask, can the Mayor bully even multinational corporations into subsidizing the city?  

To answer that question, one has to understand what politicians, and especially Chicago politicians, mean when they refer to “the private sector.”  To these lifelong pols, whether we mean Rahm Emanuel, Rich Daley, or any of the sycophants with whom they have surround(ed) themselves, the “private sector” refers to that group of nominally private companies, large and small, who wait obediently and obsequiously to be tossed, in a process that the politicians laughingly call “privatization,” one of the monopolies over providing formerly public goods or services.   Operating a monopoly is quite lucrative, as Econ 101 tells us; the prospect of attaining such a monopoly, or of losing one, can be quite intimidating to the companies that unashamedly refer to themselves as participants it the “private sector” in this town.  Such intimidation can be quite effective in motivating those whose idea of “free enterprise” is sitting at the Mayor’s feet, gazing pitifully, yet hopefully, yearning to be tossed a bone or two.

Whatever is at work here—actual market returns to endeavors that are supposedly undoable in the real marketplace, side rewards to IT participants, or intimidation of IT and prospective IT participants, the Chicago taxpayers are going to have to finance, one way or another, the upkeep of the infrastructure that makes the city work.   This will be expensive due to the raids pols have made on the city’s treasury for years.  The Chicago Infrastructure Trust is just a means of hiding these costs from the taxpayers while keeping the same old Chicago political games going.

“TO WAR! TO WAR! THE (CENTRAL BANKS ARE) GOING TO WAR!...YOU THINK THIS (CURRENCY’S) IN BAD SHAPE, JUST WAIT ‘TIL I GET THROUGH WITH IT!”

2/19/13

European Central Bank (“ECB”) President Mario Draghi was an active participant in last week’s G-20 meeting in Moscow, the conclave at which financial officials from throughout the world fell all over themselves denying that they were engaging in manipulation of the value of the currencies under their tutelage.   Yesterday, Mr. Draghi again insisted that the ECB has no target for the euro’s value.

So why did Mr. Draghi, as this morning’s (i.e., Monday, 2/19/13’s, page A8) Wall Street Journal reported, suggest

significant further gains in the euro zone’s currency may prompt stimulus measures from the ECB.

If the ECB’s stimulus measures are designed only to juice the euro zone economy and any consequences for the euro are purely ancillary, why would further gains in the euro prompt further stimulus measures?   One could argue, with only a slightly out of kilter face, that a strong euro might hurt euro zone exports, slow its economy, and thus prompt stimulative action, but that would appear to an objective observer to be only a rationalization.

Mr. Draghi’s engaging in at best only slightly clothed currency manipulation is also indicated by his also saying yesterday

“The exchange rate is important for growth and stability.”

On the other side of the world, new Japanese Prime Minister Shinzo Abe is threatening to attempt to legislate a less independent Bank of Japan (“BOJ”) if the bank doesn’t reach the 2% inflation target the BOJ set under pressure from Mr. Abe.  At least Mr. Abe is threatening to eliminate the BOJ’s independence legislatively; in this country, the Bush/Obama Administration stole the Fed’s virtue (to little protest from, indeed the willing submission of, Obsequious Ben and His Merry Men) without bothering to deal with the niceties of the law.

It’s bad enough that the world’s central banks are obviously engaging in a currency war.   That they are out and out lying about it, and assuming that we are too stupid to see through their diaphanous ruse, is perhaps even worse.

2ND CONGRESSIONAL DISTRICT PRIMARY IN ILLINOIS: ROBIN KELLY-- BEFORE IT’S TOO LATE?

2/18/13

State Senator Toi Hutchinson dropped out of the race to succeed the disgraced Jesse Jackson, Jr. as 2^nd district Congressman in Illinois.   (See 2/16/13’s already seminal post LET’S FINALLY TELL THE TRUTH ABOUT JESSE AND SANDI JACKSON.)  This surprised many observers, including yours truly, though Hutchinson was losing ground of late to her chief rival, long time political hanger-on Robin Kelly, whom Ms. Hutchinson endorsed after dropping out of the race.  

Ms. Hutchinson (pictured) had two big things going for her.   As of the last filing date on 2/6/13, she had more than twice as much money ($199,901 vs. $88,820) in her campaign fund as did Ms. Kelly.   She also had the endorsement Cook County Board President Toni Preckwinkle.  Ms. Preckwinkle is not only very popular but also used to employ Ms. Kelly; thus, her endorsement of Ms. Hutchinson over her former employee said a lot.   However, there seemed to be momentum building behind Ms. Kelly, resulting in her fundraising picking up considerably in the last few weeks.   The entrance of New York Mayor Michael Bloomberg’s pro gun control  Independence USA PAC into the race on Ms. Kelly’s side, to the tune of $2.1 million, convinced Ms. Hutchinson it was time to go.

 The suspicion on the part of many, and not only those backing the sole white candidate in the race, former Congressman Debbie Halvorson, is that there was more to Ms. Hutchinson’s dropping out of the race than Mr. Bloomberg’s supporting Ms. Kelly because of Ms. Hutchinson’s record on gun control, which could be construed, after more than a modest amount of twisting and turning, as anti gun control.  In this still racially charged part of the country, the thought is that the black political leadership in the district is coalescing behind Robin Kelly for fear of Debbie Halvorson winning the primary, which is tantamount to winning the election, in a district that was redrawn to assure black representation.

It’s tempting to draw parallels between the 1983 general election for Chicago mayor and the 2013 primary in the 2^nd Congressional district.   In 1983, 1^st District Congressman Harold Washington won the Democratic primary against two white candidates, the incumbent Jane Byrne and Cook County State’s Attorney Rich Daley.   Given the racial character of much of politics in Cook County back then (and now), the Republican nominee, State Representative Bernard Epton, suddenly had a chance to win by drawing the votes of white voters who couldn’t stomach the idea of a black mayor.   Mr. Epton, by no means a bigot, seemed to have gotten caught up in his newfound good fortune, using as a campaign slogan:   “Bernie Epton—Before It’s Too Late.”  And he came reasonably close to wining in this heavily Democratic town; Mr. Washington won 52% to 48%, a very close margin by Chicago standards.

The opposite parallels, if you will, between the 2013 2^nd District race and the 1983 general are not as clear cut as one might suppose, however. 

First, and most obvious, the current race is a primary election while the 1983 Washington/Epton race was a general election.   Thus, Washington could count on the support of those party loyalists who put party before race and could therefore count on a substantial white vote.  But there was substantial support for Republican Bernie Epton coming from white regular Democratic Organization committeemen who put race before party.   The party was split, allowing Epton to make it a race. 

The party is again split in this primary, as is the nature of a primary.  While it seems that most of the powers-that-be are uniting behind Ms. Kelly, there is substantial support for Ms. Halvorson among regulars in the white townships in the district.   And a third major candidate, Alderman Anthony Beale, is a ward committeeman and is likely to draw support not only from his ward but from regulars in the portion of the district that lies in the city of Chicago.

So the primary/general distinction is not as great as one might suppose.   

Second, Bernie Epton was a very unlikely receptacle for the support of whites who were voting nearly solely on the basis of race, some might say on the basis of bigotry.   Mr. Epton was a liberal Jew from Hyde Park, not exactly the type of candidate that white bigots would ardently support were he running against a regular Democrat named, say, O’Brien, Kowalski, Melchiorre, or Siliunas.   Robin Kelly is a black liberal whose race and political philosophy are very much in keeping with the district.  She would thus be a very logical receptacle of the support of liberal black voters. 

Third, the demographics of the district make a victory by Ms. Halvorson very unlikely, even had Toi Hutchinson stayed in the race.  Only 34% of the voters in the district are white.   As much as we would like to wish otherwise, people vote their race.   If Ms. Halvorson got every white vote, the black vote would have to be split nearly evenly among the three (before Ms. Hutchinson’s departure) black candidates for her to win.   (When Ms. Halvorson ran against Mr. Jackson in the primary in 2012, she was trounced 71% to 29%.)  Ms. Halvorson also claims that she will be outspent 30-1 by Ms. Kelly.   But she’s wrong; if you count Mayor Bloomberg’s money, she will be outspent 40-1.   Simply put, Debbie Halvorson, because of her race but also because she is not a very compelling candidate and is not well financed, never had much of a chance in the primary, with or without Toi Hutchinson in the race.

A better parallel might be drawn between the current primary in the 2^nd District and the 1983 primary for mayor in which, as I said before, Harold Washington won the race because the white vote was split nearly evenly between Mr. Daley and Ms. Byrne; the actual outcome was

Washington                  37%

Byrne                           33%

Daley                           30%

Until the last few weeks of the race, moreover, Mr. Washington was not expected to be a factor; that was a Byrne/Daley race until Mr. Washington came out of seemingly nowhere to win.  (And it was an ugly enough race even before Washington entered the race and the anti-black bigotry rose to the surface.   Remember the Daley supporters and their unsanctioned “Dump the b----, vote for Rich” signs?)

Doubtless, the black political power structure was thinking about this outcome when they persuaded Toi Hutchinson to leave the race, but they still might have a parallel situation on their hands.   There are three major candidates remaining:   Robin Kelly, Anthony Beale, and Debbie Halvorson, the latter of whom is the only white candidate.   In addition, there is a host of minor candidates, most, if not all, of whom are black.   So there is the potential for racial ticket splitting resulting in a Halvorson victory.  

However, again, the demographics of the 2^nd district are very different from the demographics of Chicago in 1983.   Every white vote wouldn’t win the race for Ms. Halvorson even in a crowded field.   And Debbie Halvorson is no Harold Washington.

Yes, race permeates politics in Chicago and its environs, even to this day, but that doesn’t mean the 2^nd Congressional race is an eerie reverse parallel of the 1983 mayoral general or primary election.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics.