Capitol Fax.com - Your Illinois News Radar

“Death spiral” drama queens

Posted in:

Illinois

* I’m running late this morning because I had to wait on a call to finish a story for subscribers. So you can chew on this one for a bit.

Sun-Times…

“This afternoon, we heard an election-year campaign speech from a governor who’s failing the people of Illinois. We’re one of the worst-run states in America,” said private equity investor Bruce Rauner, whose onslaught of early television advertising has positioned him as the frontrunner in the GOP gubernatorial field. “We’ve entered an economic death spiral, and Gov. Quinn is trying to cover it up and put a rosy picture on it.”

State Sen. Kirk Dillard, R-Hinsdale, served up a similar view.

“Pat Quinn is a populist, and he’s going to give you pablum about Illinois moving in the right direction. That’s just not true,” Dillard said. “When you talk to people in this state, they believe Illinois, like I do, is in a downward death spiral, and, obviously, public-opinion polling shows most of the state believes we’re going in the wrong direction.”

* WEEK TV…

“We’ve started our economic death spiral.” Dan Rutherford, GOP Candidate for Governor.

* The Federal Reserve Bank of Philadelphia produces a monthly report of each state’s projected six-month growth rate…

In addition to the coincident index, the models include other 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 3-month Treasury bill.

* Great Lakes states in the latest growth projections list…

* Michigan: 3.86 percent

* Indiana: 2.85 percent

* Illinois: 2.67 percent

* [Overall US: 1.52 percent]

* Wisconsin: 1.24 percent

* Minnesota: 0.73 percent

* Ohio: 0.72 percent

* Six-month growth projections for the nation’s five most populous states…

* Illinois: 2.67 percent

* Florida: 2.43 percent

* Texas: 2.32 percent

* New York: 2.18 percent

* [Overall US: 1.52 percent]

* California: 1.42 percent

* Do we have problems here in Illinois? Heck yes we do. Big ones. Huge ones, even. The pace of recovery has been just awful. Too many people are still horribly poor, too many people still don’t have jobs or any realistic hopes of getting decent jobs. And there is absolutely no doubt that inept mismanagement has been a significant factor here. Is progress being made? Maybe. The Philly Fed seems to think so. But even if they’re wrong, are we in a “death spiral”? C’mon.

[All emphasis added above.]

* Related…

* Moody’s revises Illinois’ worst in the nation job projections

posted by Rich Miller
Thursday, Jan 30, 14 @ 9:08 am

Comments

Wow, Hyperbole in politics during a campaign, who would have thunk it…

Comment by OneMan Thursday, Jan 30, 14 @ 9:12 am
“Death spiral” suggests that its irreversible. So are they suggesting that we just all give up because all hope is lost? Behold a white horse…

Comment by Old Shepherd Thursday, Jan 30, 14 @ 9:12 am
Is Frank Luntz working for three of the campaigns? In that case I’m gonna place some bets on Brady…

Comment by Chi Thursday, Jan 30, 14 @ 9:13 am
I thought you were promoting a new Metal band at first Rich, since we know you love music
y
es things are not great and we can do much better, but 3 people saying death spiral does not really help the situation. just scare tactics.

Comment by PoolGuy Thursday, Jan 30, 14 @ 9:15 am
Good to see that three of the four men running for governor on the Republican side can agree on something . The facts coming out show they are exaggerating our problems, but it does show they are on the same page (/snark intended)

Comment by Roadiepig Thursday, Jan 30, 14 @ 9:17 am
The death spiral should be put in a lock box, and if you read my lips, I asked where’s the beef? You can put a lipstick on a pig, but you can be born with a silver foot in your mouth too. But let’s be real, is there Two Americas? I won’t stop thinking about tomorrow, but today, is our mission accomplished? On day one, you know me, and things are going in the wrong direction.

Are we better off then we were four years ago? Well, when I get cold, I just put on a sweater and know yes we can…

Comment by Oswego Willy Thursday, Jan 30, 14 @ 9:18 am
Death spiral is an apt description…for the Republican candidates when the undecideds still outpoll all of them.

Comment by Wensicia Thursday, Jan 30, 14 @ 9:18 am
Thank you Rich for some perspective.

Comment by Obama's Puppy Thursday, Jan 30, 14 @ 9:19 am
The “3″ can agree Illinois is in a “Death Spiral”, but couldn’t agree to raise money, be agressive, to not be out-hustled, and to be seen as someone running with nothing to lose, because in reality, 3 of the four, if they lose, go pack to a “private” life.

But, I guess if you are going to have hyperbole, a “Spiral” that is linked to …Death … shounds at least a bit “Discovery Channel” interesting(?)

Comment by Oswego Willy Thursday, Jan 30, 14 @ 9:24 am
It’s better than nothing, but in real dollar terms, that growth rate is being calculated on a figure that’s half of that of Texas (In 2009, 1.244 for TX vs. 630 for IL, both in $millions). From 2008 to 2009, IL’s Gross State Product declined from $633 to $630. I’d like to think I’m a “glass half full” kind of guy, but that growth rate is going to have to withstand a pretty stiff headwind. If we can achieve that level of growth, it says a lot for the resilience of the people of this State, not the enlightened leadership of its political class.

Comment by Steve Reick Thursday, Jan 30, 14 @ 9:24 am
These guys really instill confidence in our state! Why don’t they just tell all of us to go jump off a cliff because there is no hope. Send in the clowns? Hell, they are already here with all this unified “we’re doomed to fail” talk.

How about offering up solutions for Illinois, and stop this stupid, self-destructive, rhetoric. A well thought out plan to move us forward would be good. Hello!

Comment by Sunshine Thursday, Jan 30, 14 @ 9:25 am
Rich: This is merely a quirk of mathematics: the farther you fall - the greater the % rebound will be. If a $1.00 stock moves up 10 cents - that is a 10% move!! The tip off should have been seeing Michigan leading the pack. When was the last time you were in Detroit??

Comment by veritas Thursday, Jan 30, 14 @ 9:29 am
Well as long at Pat Quinn works night and day on the problems that far our State I’m not worried.

Comment by Just Me Thursday, Jan 30, 14 @ 9:29 am
As I said before, I am optimistic about our state’s future. Again, we’ve taken serious steps to address our pension problem. If the reform gets overturned, I am confident that we can enact reform closer to what I favor. The reform that was passed was not my first choice, but the state doesn’t revolve around my wishes. We have more work to do, for sure, but we’ve taken steps.

In other good news, which is a silver lining to the bad news in this story, Motorola is being sold, but the company buying it said it will stay in Chicago.

I’m also encouraged somewhat by the small uptick in union membership. Union membership almost always means higher wages.

We are in a morass, and to think we can climb out of it overnight is not realistic to me.

Comment by Grandson of Man Thursday, Jan 30, 14 @ 9:29 am
- Just Me -,

Wish I remebered that one …nicely done.

Comment by Oswego Willy Thursday, Jan 30, 14 @ 9:31 am
The GOP candidates are in something of a catch-22 because they know they have to claim we’re in unprecedentedly bad straits to try to shake habitually Dem-voting Illinoisans out of that pattern, but at the same time it’s just super depressing and offputting to listen to them bashing the state constantly without presenting any sort of optimism or pride in what Illinois has to offer or what their positive vision is for the state. As far as I can tell, the only GOP candidate with any clear vision for Illinois is Rauner, but his vision appears to be just bust unions and get rid of as many govt. workers as possible which doesn’t exactly offer a whole lot for the non-ideological, non-economic right folks who actually want some sort of govt. services to exist.

Comment by hisgirlfriday Thursday, Jan 30, 14 @ 9:32 am
Here’s the challenge for Illinois:

Manufacturing - existing Illinois firms can look to other states for MUCH lower work comp. rates. In addition, there is a growing sense of the business community, in Illinois, that state government is highly prejudiced against union-free companies.

The coming hammer - the pension problem won’t be solved with anything other than serious pension reform, or dramatic tax increases (income or property). It’s hampered more than a few projects, as both individuals and employers have told me, “Yes I’m interested in building a new house or factory, but I just can’t imagine what my taxes are going to be 5-10 years down the road.”

And it’s depressing for employers. Open up one of the myriad of databases on employee salaries with the state. A line worker at a Secretary of State facility earns $75,000/year in a downstate county. That’s more than many managers and with a lot more perks!

And yet, the state is considering graduated income taxes?

I was chastised a year or so ago, when I suggested an inordinate amount of wealthy people were leaving the state. Commentators on this board said it wasn’t happening.

Ah, but now the state has tightened the rules on residency (in the last few months) - I guess that was simply a coincidence?

Death Spiral? Maybe not. But there is nothing here to get people excited about expanding their activities in the state.

Comment by Downstate Thursday, Jan 30, 14 @ 9:32 am
If anyone knows “pablum” it’s Dillard!

Comment by Whatever Thursday, Jan 30, 14 @ 9:36 am
Rich,

Where are the fastest growing cities in America? IL finally has some growth, but it starts from such a low baseline. We are still a huge out migration state. Neither party talks about jobs and how they are created.

Might I suggest smarter and easier to understand regulations and a state strategic plan on spending.

Quinn’s government solutions for every issue works as well as it has ever worked…NOT AT ALL

Comment by SonofSuperAbe2014 Thursday, Jan 30, 14 @ 9:36 am
Rutherford, if you want into the clown car with Rauner, Dillard and the puppy killer… you’re not really better than they are.

Be serious or wear the clown suit.

Comment by Carl Nyberg Thursday, Jan 30, 14 @ 9:39 am
It’s not just our state in a death spiral…it’s the entire country. Raising the debt ceiling again because 17 trillion just isn’t high enough? Are there not any responsible politicians anywhere? Sure it’s going to hurt to cut programs, but it will hurt a lot more when the whole thing crashes and the programs cease to exist. And there will be another crash. Just look at the graphs. Why would any politician work to fix things when they know making the hard choices will lead to lost elections. That’s why we need term limits. So politicians will start thinking about the generates after them instead of just the next election. ugh!

Comment by really? Thursday, Jan 30, 14 @ 9:39 am
In other good news for our state, gun violence involving youth dropped substantially in Chicago:

http://www.suntimes.com/news/crime/25216021-418/shooting-incidents-of-cps-students-down-56-percent-city-analysis.html

Comment by Grandson of Man Thursday, Jan 30, 14 @ 9:40 am
Within the bowels of these reports, you will find statements that say the upward projections are much more unreliable than the downward projections when it comes to economic predictions.

Comment by Cincinnatus Thursday, Jan 30, 14 @ 9:41 am
===This is merely a quirk of mathematics: the farther you fall - the greater the % rebound will be===

OK, fine. I’ll even concede that. But the point is there IS a rebound not a death spiral.

Comment by Rich Miller Thursday, Jan 30, 14 @ 9:42 am
To the Post,

Great perspective with both the 5 most populated states and with the Great Lakes Region.

Illinois is cought up in a Region that no state mirrors Illions, and the 4 states in the population window with IL, (TX, FL, CA, NY) also dominate their Regions (SW, SE, W, NE), that is a great prism to take the numbers and have both the Region and the Regional leaders seen in comparison to IL.

This is why comparing Indiana or Wisconsin, or even a Michigan “straight-up” is a big ask.

“Death Spiral” seems so harshly negative, given the two apt comparisons to Region, and in contect with Regional Leaders, it refuses to look at the snapshot with an honest eye.

Illinois has major problems it is facing. Not 2 or three Bills and “Whee! All is good” fixes are going to get Illinois turned completely around. However, when running for the Big Chair, you can go down the road of wanting and needs to do much better, you can even go as heavy as a distructive path. Death? Yeah, um, …ok(?)

Comment by Oswego Willy Thursday, Jan 30, 14 @ 9:43 am
Wisconsin has a pension system that is properly funded and the taxpayers are going to receive rebates from the projected surplus. So am I supposed to believe that Quinn is doing a better job than Walker?

Comment by Upon Further Review Thursday, Jan 30, 14 @ 9:46 am
If there is a death spiral, its primary cause is political “leaders” who think you can raise revenues and balance the budget by lowering taxes. Because, let’s face it, the voters will not stand for program cuts. They say they want cuts, but any attempts to actually make some are met with very solid voter resistance. In fact, polls consistently show the only thing voters like less than tax increases are program cuts. Two of the death spiral trio (and I expect Brady to roll out a death spiral quote soon) have committed to dumping the temporary tax increase, and, in so doing, have committed to a death spiral for the state budget.

Comment by Pot calling kettle Thursday, Jan 30, 14 @ 9:48 am
For PoolGuy:

“You wanted it. You got it. The hottest band in the land- DEATH SPIRAL!”

Comment by Roadiepig Thursday, Jan 30, 14 @ 9:50 am
===So am I supposed to believe that Quinn is doing a better job than Walker?===

Perspective? Could Walker, given the General Assembly, and the Constitutional issue, married with the past 20 plus years of the pensions here, could Walker, under the Illinois Governor’s “workplace”, could Walker impliment and run Illinois like Wisconsin?

Does Illinois mirror Wisconin enough to put that comparison on Quinn, or any of the 4 on the GOP side to make it fair?

Big ask or big wish?

Comment by Oswego Willy Thursday, Jan 30, 14 @ 9:51 am
Apparently they’ve all been watching too much pairs figure skating in anticipation of the Olympics.

Comment by Jabes Thursday, Jan 30, 14 @ 9:53 am
poverty going up, #of employed going down, incomes going down, population leaving (disproportionately job producers), big taxes on horizon, leaders who continue to start new spending programs and regulatory schemes in the midst of all this….I’d say death spiral is appropriate description.

Comment by Konda Chilly Thursday, Jan 30, 14 @ 9:53 am
Every stat needs to be put into context.

Even the unemployment rate stat isn’t -quite- as bad as it looks at first glance. In part (in part) that means there are still a lot of young’uns moving to Chicago and looking for jobs, which isn’t a bad thing for the state. If your state was turning more into a retiree community, on the other hand, that would push down your unemployment rate.

Comment by ZC Thursday, Jan 30, 14 @ 10:00 am
Illinois is not in a Death Spiral, yes a change of leadership is needed, heck just plain leadership is needed. Rauner the GOP polling leader is not in my opinon capable of moving the state forward and Bill Brady just isnt capable. Dillard & Rutherford seem better choices. Illinois has lost to many jobs under Quinn and population growth has stagnated. Quinn is a nice rable rouser who can hold silly, boring press confrences but he is not a leader or a manager, he is Blagos left overs and it is time to move on.

Comment by fed up Thursday, Jan 30, 14 @ 10:00 am
I forgot to mention that gasoline is also more affordable in the Dairy State too. As Dillard and others have not Illinois is unique for taxing gasoline purchases twice (sales tax and per gallon tax).

Comment by Upon Further Review Thursday, Jan 30, 14 @ 10:03 am
“So am I supposed to believe that Quinn is doing a better job than Walker?”

That appears to be the case lately, when it comes to job growth. Where are the 250,000 new jobs that Scott Walker promised? Last I checked, Wisconsin underperformed the national average for most of the months he’s been governor.

Comment by Grandson of Man Thursday, Jan 30, 14 @ 10:04 am
Roadiepig, good one. does sound like a metal band name. I’m thinking Bruce would be lead singer with Dan the man on drums. they should have borrowed from Trent Reznor and used Downward Spiral instead.

back to the post, last year Illinois was #5 and Chicago #2 in Site Selection’s annual rankings. if businesses really didn’t want to locate or expand in Illinois we should be spiralling down that list as well I guess.

Comment by PoolGuy Thursday, Jan 30, 14 @ 10:04 am
OW: You also forgot “A leader for a change” or something like that.

Comment by Skeptic Thursday, Jan 30, 14 @ 10:14 am
Let me be clear, make no mistake, I’ll say it again, working day and night will make you tired, but Illinois needs a leader for a change.

(h/t all around)

Comment by Oswego Willy Thursday, Jan 30, 14 @ 10:26 am
@Grandson of Man:

Maybe Walker neglected his job creation agenda somewhat while fending off a gubernatorial recall funded, in part, by out of state interests who tried to hijack the process in Wisconsin.

I would trade governors in a nano-second.

Comment by Upon Further Review Thursday, Jan 30, 14 @ 10:32 am
The only death spiral that matters will be if Richard Sherman can get a pick-6 off Payton Manning this Sunday.

What are these guys going to say when the sky doesn’t fall? It’s like those doomsday cults who look pretty stupid on November 12 after saying the world was going to end on November 11.

Comment by 47th Ward Thursday, Jan 30, 14 @ 10:43 am
Leaders focus on establishing a vision of where we can go from here.

“Death spiral” is not the reality of Illinois, any more than it is the reality of the United States — though you wouldn’t know it from the language spread by a few right-wing propagandists over the past five years.

Comment by walker Thursday, Jan 30, 14 @ 10:45 am
===I would trade governors in a nano-second.===

You would have to trade Legislatures, state dyanmics, constitutions … lots of changinfg to be done in an nano-second.

A, um, square peg, round hole, kinda statement usually follows this logic.

Quinn would be as effective in Wisconsin, as Walker would be as effevtive in Illinois, changing only governors, and nothing else.

Comment by Oswego Willy Thursday, Jan 30, 14 @ 10:45 am
@9:46AM=Wisconsin has a pension system that is properly funded…= Wisconsin had a law similar to IMRF where the pension payments HAD TO be made all along, NO pension holidays or short payments allowed.
Illinois “didn’t need a law like that because of the pension protection in the Illinois constitution”. What could possibly go wrong? It has worked well.(not).
Walker did not have anything to do with the pensions. They were in good shape long before he got there.

Comment by DuPage Thursday, Jan 30, 14 @ 10:49 am
Manuafacturing jobs are not coming to Illinois!!
Taxes to high, workmans comp to high, energy to high and infrastructure terrible. People are moving to the south and southwest. Even more after this winter.

Comment by Union Man Thursday, Jan 30, 14 @ 10:54 am
Catepillar not long for this state either. They are closing and/or moving lines in the Aurora plant and others. If Cat goes, others will follow!! Look at the towns depending on tax revenue from them, Aurora, Peoria, Decatur. Cat goes, these towns are in big trouble.

Comment by Union Man Thursday, Jan 30, 14 @ 10:59 am
And then last night on the news, a story appeared and said 75% of all manufacturing jobs could be done by robots by 2030!! Hello! We’re all in trouble then.

Comment by Union Man Thursday, Jan 30, 14 @ 11:01 am
@Oswego Willy

=== Let me be clear, make no mistake, I’ll say it again, working day and night will make you tired, but Illinois needs a leader for a change. ===

Absolutely! Yes!

However, given the choices we have - Bruce Rauner and the 3 unfocused “other candidates” as well as Pat Quinn - Pat Quinn looking more and more like the pick of the litter.

Comment by Bill White Thursday, Jan 30, 14 @ 11:01 am
- Bill White -,

It was more parody and farse of all buzz words, phrases and all, not of one or any Guv Candidate.

Comment by Oswego Willy Thursday, Jan 30, 14 @ 11:05 am
The governors race this year reminds me of a tv show…. The Biggest Loser!!

Comment by Union Man Thursday, Jan 30, 14 @ 11:06 am
Face it, campaigns would be boring without the hyperbole. What would y’all have to do if all the candidates were level headed and reasonable? How could you, as a candidate, energize your base without inflammatory rhetoric?

I am not altogether being humorous here. Most folks don’t pay much attention to the measured debates that are held. They pretty much ignore the many in depth articles on the various subjects leading up to the election. Whose fault is that? The candidates? The media? The voters? Take come time and read what passed for journalism and campaigning 150 years ago. The mudslinging that took place between candidates and in the yellow rags that passed for newspapers was astounding. Current stuff is tame in comparison. It’s an election year - this is par for the course. And it ain’t hard to get thru the weeds to the truth, if you spend a little time on it.

Comment by dupage dan Thursday, Jan 30, 14 @ 11:27 am
- Oswego Willy -

Yes, I know. And all in all it is rather pathetic that Pat Quinn increasingly appears to be the pick of the litter, however . . .

Here we are!

===

Anyway, my new phrase for today is “secular stagnation” and that is because of Moody’s suggestion that Illinois’s economic growth is being hobbled by TOO LITTLE hiring by state & local governments.

Comment by Bill White Thursday, Jan 30, 14 @ 11:32 am
“fending off a gubernatorial recall funded, in part, by out of state interests”

Oh stop making excuses. He was still governor no matter what was happening politically. Grow up and own it. Plus, the recall happened in 2012. We’re talking Walker’s whole term. He’s failed to create the jobs he promised, end of story.

“out of state interests who tried to hijack the process in Wisconsin”

Yeah, the Koch brothers are not out of state interests. Plus, Walker outraised his opponent to the tune of something like 7-1.

Yeesh, good economic news for Illinois brings out the trolls or troll-like commenters. These folks want negativity and bad news in order to push their anti-union agenda, and they fear the progressive income tax because they want to shove all the problems on unions and poor people who receive government benefits.

Look, I support corporate tax breaks and cuts to government programs and unions, when absolutely necessary. I’m not only a union member but a state resident who’s concerned about our fiscal health.

Comment by Grandson of Man Thursday, Jan 30, 14 @ 11:39 am
===That’s why we need term limits. So politicians will start thinking about the generates after them instead of just the next election. ugh! ===

There are plenty of states which have adopted term limits over the last few decades. Is there any indication that this is actually the case?

Comment by CollegeStudent Thursday, Jan 30, 14 @ 11:50 am
Agree completely with Rich. We are not in a death spiral. But the sad thing is that with better leadership we have the resources to be in the opposite of a death spiral–we could be springing forward. And better leadership is nowhere in sight.

Comment by jake Thursday, Jan 30, 14 @ 12:25 pm
These are Republicans. They’ve been waiting for the “end of days” since they were born, it’s only naturally to believe we’re in a death spiral.

Comment by Anonymous Thursday, Jan 30, 14 @ 8:06 pm
Now I see the problem. Wow, so near-sighted.

Comment by Treestump Thursday, Jan 30, 14 @ 9:31 pm