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* On Friday, the Federal Reserve Bank of Philadelphia released a six-month forecast of state economic conditions. If the forecast is correct, Illinois will out-perform both Indiana and Wisconsin…
The models include the state’s related coincident index and variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply Management (ISM) manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the three-month Treasury bill.
* We have our problems, but we’re not the ultimate horror show that some people insist we are. And that fits in with the theme of my weekly syndicated newspaper column…
After more than a decade of extreme scandal and gross government mismanagement, far too many Illinoisans seem to be wallowing or even perversely reveling in our state’s embarrassing failures.
Just try to point out a positive aspect of this state, and you’ll be shouted down by all sides as a naive homer.
But accentuating the positive is just what Gov. Pat Quinn tried to do last week and, man, was he hammered for it.
Putting aside all the resulting uproar for a moment, the governor’s State of the State address was probably the best speech I’ve ever heard Quinn give, at least on a technical basis.
It was well-written (his 2010 speech was horribly ad-libbed), well-delivered (he’s given some real snoozers) and, as far as a State of the State speech goes, it hit all the right high notes.
Yes, it was heavily criticized for being way too light on budget specifics, but, hey, this was not a budget speech. Comptroller Judy Baar Topinka said Quinn was “putting dessert on the table before the vegetables.” Well, yeah. But the broccoli address will be delivered in just a couple of weeks. Next year’s budget will be the toughest one Quinn has ever crafted. I can wait a couple of more weeks to see what he’s going to do.
Then there’s this, from Article V, Section 13, of the Illinois Constitution: “The Governor, at the beginning of each annual session of the General Assembly and at the close of his term of office, shall report to the General Assembly on the condition of the State and recommend such measures as he deems desirable.”
The annual State of the State address is not supposed to be about the government. It’s supposed to be about Illinois itself. So, much of the over-the-top hand-wringing and gnashing of teeth this week about Quinn’s address not being focused enough on the government itself was misplaced.
Yes, I agree that he should have tried harder to steel our collective nerve for the fearsome battles ahead. But, overall, the governor delivered a pretty standard State of the State address as required by the Constitution.
Quinn’s no Roosevelt or Reagan, but not many are and Illinoisans knew that when they elected him.
The speech was roundly slammed for being too “rosy,” but was Quinn really exaggerating when he extolled the virtues of our state’s reviving manufacturing base, our skilled workers, our creative entrepreneurs, our technology, our recently amazing successes with exports?
Are we really at a point in history when a governor cannot extol the true goodness of Illinois without being thought of as a clownish optimist?
Despite what you’ve read in most of the papers and saw on the TV, there were some positive reactions to Quinn’s speech, including from some folks you might not have expected.
Illinois Chamber of Commerce president Doug Whitley’s press release all but gushed over Quinn’s proposals. The Illinois Manufacturers Association’s Greg Baise not only praised Quinn’s ideas but said Illinois should do even more.
Trouble is, neither of those guys have a vote in the General Assembly. And when you looked around the Legislature, it was tough to find many positive remarks about the governor’s address.
The main reason, apart from partisanship, was a Civic Federation report released last week that projected an almost unimaginable $35 billion stack of overdue state bills by 2017.
The disastrous projections have gut-punched the entire Statehouse. So, legislators were in no mood for happy talk when Quinn took the podium.
Most of their negative reactions focused on the $300 million or so Quinn wants for tax breaks and increased spending.
The Republicans were predictably unanimous in opposition to Quinn’s ideas, despite having adamantly insisted on a far costlier corporate tax cut package just a couple months ago.
We have serious problems in Illinois. But it’s time to stop wallowing in all our failures and divisions.
Admit mistakes, face up to the problems like grown-ups and move forward together. Is it really too much to ask?
Discuss.
* Related…
* Election year for entire Legislature makes vast agenda more daunting - With all 177 lawmakers up for re-election in new territory, not much is expected to get done
* STATEHOUSE REEDER: Spending more makes no sense
* Statehouse Insider: Budget issues loom over all
* Erickson: Quinn’s speech disconnected from reality
* Editorial: Natural gas tax ‘relief’ would hurt
* Editorial: Hey, governor: Are you listening to yourself?
* Illinois Bracing for a Medicaid Crisis
* Cepeda: Raising school dropout age is not shown to help
* Pension switch could lead to teacher layoffs, superintendent says
* Quinn urges low-income families to apply for tax credit
* Illinois launches online registry for veterans
posted by Rich Miller
Monday, Feb 6, 12 @ 6:07 am
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That Philly Fed Reserve is nothing but a bunch of Quinn apologists.
Comment by Michelle Flaherty Monday, Feb 6, 12 @ 7:09 am
We can only hope the Federal Reserve Bank of Philadelphia is good at forecasts, also Quinn has probably been smiling a lot more after this news.
Does anyone know the accuracy or means of deviation the Federal Reserve Bank of Philadelphia has?
Comment by South of the Loop Monday, Feb 6, 12 @ 7:54 am
Some of the down-talk is an offshoot of the national campaign strategy, which has been to try to monkeywrench the economy, inhibit any attempt at a recovery, and blame every bad thing on the incumbent to get a Republican president elected again. The ones shouting “Illinois sucks” the loudest are republicans, on the outside, looking for a way back in. Our success is not in their short-term interest.
Comment by Newsclown Monday, Feb 6, 12 @ 8:08 am
Well, good heavens. Miserable anti-business Illinois will outperform anti-union, pro-business Wisconsin and Indiana in the coming year? Whatever will the Tea Party zealots make of this development? Whatever, they will blame Obama.
Comment by Billy Dennis Monday, Feb 6, 12 @ 8:17 am
Glad to see this.
Maybe this will quell all the anti-tax naysayers, and give impetus to borrow more money to pay off Illinois’ back log of bills that continue to harm small businesses and state vendors.
Comment by Anonymous Monday, Feb 6, 12 @ 8:21 am
We had that unusual upturn in unemployment last year, as the rest of the nation went down. That put Illinois in the position of having more to gain economically than neighboring states. I see unemployment claims are part of the six-month projection, so the forecast could be based in part on Illinois playing catch up.
Comment by muon Monday, Feb 6, 12 @ 8:51 am
“Miserable anti-business Illinois will outperform anti-union, pro-business Wisconsin and Indiana in the coming year?”
It appears that way. However, Michigan — like Wisconsin, recently taken over by a “pro-business” GOP government — is projected to outperform us, and Missouri and Kentucky to perform equally as well. Then again, Michigan may simply have nowhere to go but up…
Comment by Secret Square Monday, Feb 6, 12 @ 9:12 am
i always figure that people like scott walker and mitch daniels just don’t have any experience in the private sector and so are very susceptible to the argument that “government needs to get out of the way to spur economic growth.” the unspoken part of that, though, is that most corporations — and especially the big ones — expect government help (tax breaks, subsidies, contracts) in order to be profitable. and who doesn’t want money for nothing?
walker and daniels are just too naive to understand they are being played…
Comment by bored now Monday, Feb 6, 12 @ 9:17 am
-Admit mistakes, face up to the problems like grown-ups and move forward together. Is it really too much to ask?-
There’s really no other option.
Comment by wordslinger Monday, Feb 6, 12 @ 9:24 am
I guess these predictions are always right?
Large economic trends are very complex. It takes more than one quarter or year to realize the wisdom or folly of a given path. It is likely to take more than a couple years to realized the benefits or pitfalls of a given set of decisions.
Makes it tough to make decisions like that when your performances is measured by the minute.
Regardless of which State does better in the short term, Illinois has a much deeper hole to dig out of than the surrounding states.
Comment by Plutocrat03 Monday, Feb 6, 12 @ 9:37 am
==the forecast could be based in part on Illinois playing catch up.==
If you look at the historical data, it looks like this is happening to some degree.
Another problem, though: they’re relying on payroll data, which makes IL look better than it is for the sole fact that IL added a lot of new part-time jobs for the already employed (while possibly cutting full-time hours simultaneously).
Comment by Lizard People Monday, Feb 6, 12 @ 9:48 am
==most corporations — and especially the big ones — expect government help==
Which is why the government should learn to say “no.” We need a level playing field.
Comment by Jimbo Monday, Feb 6, 12 @ 9:51 am
I have been involved with economic development for a number of years and I can’t remember a project that the private sector did not ask for public sector assistance. Examples of assistance are new and improved roads and bridges, new water lines, new sewer lines, tax breaks, job training etc. The folks who believe the private sector can do it alone are living in a fantasy.
Comment by Stateline Monday, Feb 6, 12 @ 10:01 am
Thank you Rich for the sanity.
Comment by Obamas Puppy Monday, Feb 6, 12 @ 10:04 am
Let me shorten the column. After losing 15 straight games and getting blown out 35-0 in the 4th quater our “leaders” have kicked a 51 yard field goal leaving us 0-15 and now down 35-3. Hooray!
Comment by Shore Monday, Feb 6, 12 @ 10:05 am
When your as far behind as Michigan it makes sense
you can have that kind of growth. Plus the auto industry got a ton of money from the bailout. Illinois needs to find a way to start paying it’s
vendors. We have to come up with a better plan than just kicking the can down the road. I just don’t see Quinn as the guy to do it.I hope I’m wrong.
Comment by mokenavince Monday, Feb 6, 12 @ 10:15 am
I’ve been to meetings/roundtables at the St. Louis Fed and we’ve often talked at length about Illinois. Illinois is an interesting microcosm: we have big budget problems and a weak housing market in the suburbs but we have a highly-trained, well-educated and fairly-compensated work force. We should be doing well.
Comment by Team Sleep Monday, Feb 6, 12 @ 10:20 am
“I can’t remember a project that the private sector did not ask for public sector assistance.”
What’s the harm in asking when there are bags of money to be handed out by unsophisticated people who are only looking for a photo op.
Good projects get done on their own. Iffy ones get the money
Comment by Anonymous Monday, Feb 6, 12 @ 10:37 am
Good news for Illinois, but given the fact that we have the only “world class” city in the region, shouldn’t we be ahead of Michigan, Kentucky, and Misouri as well?
We need to stop comparing Illinois to those close to us and look at how we are faring nationally and globally.
Comment by Foxfire Monday, Feb 6, 12 @ 10:48 am
The basic story of Chicken Little is more than 2500 years old, only in the Buddha’s version its a rabbit and not Henny Penny.
I give credit to Doug Whitley for recognizing that all of this fear-mongering is not in the best interests of Illinois’ economy, his members or the Illinois Chamber of Commerce.
Convincing other businesses not to locate here or Illinois’ businesses to relocate has three effects:
1) It actually convinces businesses to look elsewhere, stifling efforts to strengthen our economy and create jobs;
2) It creates a ripple through our economy, especially in direct business-to-business services like finance, advertising, transportation, energy and law, that hurts current Illinois Chamber of Commerce members;
3) It creates a direct decline in Illinois Chamber of Commerce membership.
If I were Baise, Whitley, and the rest of the business lobbyists, I’d consider those two points very carefully every time I get ready to open my mouth or issue a press release.
Comment by Yellow Dog Democrat Monday, Feb 6, 12 @ 10:49 am
“highly trained well educated workforce” most of which is produced in the suburbs/private schools/bloomfield hills and has nothing to do with anything political leadership in the city, cook county or springfield has done for the last 11 years.
Comment by Shore Monday, Feb 6, 12 @ 11:10 am
We don’t have a “world-class” city in the region. World class cities have public library systems that work.
Comment by Cheryl44 Monday, Feb 6, 12 @ 11:16 am
There is a limit to the impact of any state government in this recovery. Some of these relative state numbers are driven by the resurgent auto industry, which is a national success story, so far.
Comment by mark walker Monday, Feb 6, 12 @ 11:33 am
Illinois used to be ranked as one of the top 5 states now we are being compared to Wisconsin? Both political parties in this state are simply pathetic.
Comment by Liberty First Monday, Feb 6, 12 @ 11:52 am
This news will depress Dan Rutherford who’s bad-mouthing Illinois at every turn and at every microphone he can grab.
Comment by King Louis XVI Monday, Feb 6, 12 @ 12:04 pm
I am also tired of the Illinois bashing. I think we have a much better political environment than some of our neighbors–even with our problems. Apparently many people thought it was important to preempt any move out of the state by CME with the tax breaks, and that may have upset some people, but it tells me that we can work together to get something done when our backs start getting closer to the wall. When the tax break for the poor was placed in a separate bill and passed, that was a clever and necessary way to build bipartisanship, in my humble and limited opinion.
When looking at the full map through the link, we see that Wisconsin is near the bottom in the forecast. Their governor might be at the DA’s office today with his two newly-hired high profile attorneys to answer questions or try to get a leg up on the John Doe investigation. One of the attorneys, incidentally, is Chicago’s John Gallo.
I fully agree with facing our future together and working to solve our differences. If we continue to build on this, I don’t see how that wouldn’t benefit the business climate.
Comment by Grandson of Man Monday, Feb 6, 12 @ 12:30 pm
One of the big problems that we are missing here is that IL’s debt and obligations (MUCH larger than neighbors) will handicap it in creating the type of business environment needed to allow IL to thrive.
IL has so much more to offer than IN or WI and that’s one of the reasons why we have far more corporate HQ. But we’re setting ourselves up to regress. If you look at the unemployment rates a year ago, IL was only one-tenth point higher than IN. In the year after tax increase, we’re 9/10ths or one point higher. That’s a lot of jobs.
IL should be outpacing IN and WI, b/c we have more engines of job creation. The problem is the path that IL is currently on. WI and IN are trying to change theirs in their own way.
Comment by JoeZ Monday, Feb 6, 12 @ 12:53 pm
- JoeZ - Monday, Feb 6, 12 @ 12:53 pm:
=== One of the big problems that we are missing here is that IL’s debt and obligations (MUCH larger than neighbors) will handicap it in creating the type of business environment needed to allow IL to thrive. ===
This is exactly why IL should issue bonds at record low interest rates to retire the backlog of past due bills. IL’s balance sheet would remain exactly the same, except the money would be owed to bond holders rather than vendors and IL gets a multi-billion stimulus to jump start the state’s economy. Yes, pension reform must remain on the table but with a growing economy, solving that would become easier.
Also too, what Rich Miller said:
=== We have serious problems in Illinois. But it’s time to stop wallowing in all our failures and divisions. Admit mistakes, face up to the problems like grown-ups and move forward together. Is it really too much to ask? ===
Comment by Bill White Monday, Feb 6, 12 @ 1:57 pm
For those of you whose response is still wringing hands over the past, you obviously missed the point of this column. I would bet you always view the glass as half-empty as well. This is GOOD news, and I would bet the 1,800 jobs Chrysler just announced being added in Belvidere was not included in the Federal Reserve Bank’s analysis. Thanks Rich, for a very fair and uplifting column!
Comment by Both Sides Now Monday, Feb 6, 12 @ 2:17 pm
Hey-
We do have a world class city in the region, … Chicago is essentially tied with London for 4th among truly global cities based on population and GDP per capita.
Estimates by PricewaterhouseCoopers on city economics model projections run out to 2025 show that Tokyo and New York are in a class all their own, followed by LA at 3rd, then Chicago and London nearly tied based on GDP and population growth estimates.
[Source: PricewaterhouseCoopers UK Economic Outlook November 2009]
Comment by Y2D Monday, Feb 6, 12 @ 2:19 pm
@Shore -
Actually, most of that “highly trained, educated work force” has much more to do with our outstanding — many would argue world class — universities.
For example, 1 in 10 Wheaton public school students fail to graduate on time, and while that’s better than the state average, it ain’t much to brag about.
Comment by Yellow Dog Democrat Monday, Feb 6, 12 @ 3:11 pm
==Illinois used to be ranked as one of the top 5 states now we are being compared to Wisconsin?==
You are confusing total economic output with percent growth. It absolutely is appropriate to compare us to our neighbors in terms of percent growth/decline.
Comment by Robert Monday, Feb 6, 12 @ 5:00 pm
@Robert -
Silly fool. Its much easier to decide what your conclusions are gonna be and THEN choose your data!
That way, its guaranteed to be 100% accurate.
Comment by Yellow Dog Democrat Monday, Feb 6, 12 @ 8:35 pm