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Economy
Quick Hit
by Micah Maidenberg
3:47pm
Wed Oct 6, 2010

Daley's Tough Day In City Council Chambers

Outgoing Chicago Mayor Richard Daley is accustomed to seeing his legislative proposals sail through City Council like a 747 hurrying out of O'Hare. He isn't used to seeing a council member introduce legislation that would limit his power over local government operations. So today's council meeting must have been an especially bad one for Daley.

According to the Tribune's initial report on the meeting, an ordinance designed to assist renters facing displacement when a developer is converting their unit from rental to condo was sent back to committee. Protests from the real estate development industry sank the bill. That's a pretty disappointing outcome for legislation that, if passed, wouldn't even immediately help renters because virtually no rentals are being converted in condos in the present real estate market, unlike during the middle part of the decade. The city's Condo Conversion Task Force, which met 10 times over a two-year period starting in 2007 and included real estate firms, came up with the recomendations that underlie the proposed bill. "We heard nothing, and then at the last minute. Again, it puts the real estate industry not in a good light, because this was all discussed prior," the Tribune reported Daley saying. 

Ald. Scott Waguespack (32nd Ward), meanwhile, introduced an ordinance today that would allow the council's Committee on Finance to review all city contracts worth more than $500,000. The council has not provided a check over executive-branch contracting since Daley took office in 1989.

Quick Hit
by Adam Doster
10:53am
Wed Oct 6, 2010
62 comments

Unemployment And The Output Gap

If you are trying to figure out why the national unemployment rate is persistently high, do yourself a favor and read this series of posts from Washington Post economics reporter Neil Irwin. "About 7 million working-age people and 5 percent of the nation’s industrial capacity are sitting idle," he explained yesterday, "[and] not producing what they could." In other words, the economy is still struggling because of a lack of consumer demand. This graph clearly shows what Irwin calls the "output gap."

If growth remains slow, Irwin estimates that unemployment won't return to 5 percent for another 10 years. The government does have a number of tools at its disposal to kickstart demand, like boosting infrastructure spending or extending unemployment benefits. But deficit hysteria and the Senate filibuster make legislative action nearly impossible. Before the congressional recess, a bill authored by U.S. Sen. Debbie Stabenow (D-MI) that would have added 20 weeks of benefits in states where the unemployment rate is above 7.5 percent was spiked. Congress may extend during the lame-duck session its current four tiers of emergency benefits, which are scheduled to expire at the end of November, but even that humane option is in question. No wonder the electorate are angry.

Quick Hit
by Adam Doster
10:16am
Tue Oct 5, 2010

Number Of The Day: $6.4 Billion

That's how much the state of Illinois owed, as of July 1, in back payments to schools, municipalities, and social service providers. Comptroller Dan Hynes' latest quarterly report (PDF) shows that to pay off its obligations this year, the General Assembly would need to divert 23 percent of its FY 2011 revenues.

Barring a legislative miracle, next year could be even worse. Revenues are barely increasing. In just the first three months of the current fiscal year, Illinois has amassed a total of $3.5 billion in unpaid bills. That means $8 billion in late payments could carry over into FY 2012, which begins next July. It's an ugly problem without an easy solution.

Quick Hit
by Adam Doster
2:30pm
Thu Sep 30, 2010

Coordinating Job Creation

We don't agree with GOP gubernatorial nominee Bill Brady on much, but we did praise one of the ideas included in the 14-point jobs plan he rolled out one month ago: Establishing a 12-member Council of Economic Advisors. Here's how he described the idea:

A Brady Administration will immediately appoint a Council of Economic Advisors comprised of 12 of the best and brightest minds from business and academia. The Council will serve a key role in leading Illinois back to prosperity by writing the Economic Development Strategic Plan and coordinating the reorganization of the failed Department of Commerce & Economic Opportunity to create an effective economic development agency.

Bruce Katz of the Brookings Institution goes one step further than Brady, advising states to create a "Jobs Cabinet" that can coordinate economic policy across fragmented agencies. It's a set-up that seems to have a lot of merit, specifically if the appointees have ideologically and biographically diverse backgrounds.

PI Original
by Adam Doster
12:17pm
Thu Sep 30, 2010
1 comment

Would Kirk Block Everything In The Lame Duck Session? (VIDEO)

Election 2010

U.S. Rep. Mark Kirk thinks Senate Democrats are going to "overreach" during their upcoming lame duck session. And he wants to win Illinois' special election to stop them.

Quick Hit
by Adam Doster
4:14pm
Wed Sep 29, 2010
5 comments

Quinn, Brady Spar Over Put Illinois To Work

The Put Illinois To Work (PITW) program has become a surprising lightning rod in Illinois' gubernatorial race. It started yesterday when Gov. Pat Quinn committed $75 million in state funds to extend the federal stimulus program, operated by the Illinois Department of Human Services, for two months. (It was slated to expire tomorrow.) PITW offers private employers subsidies to hire (for $10-per-hour) Illinoisans eligible for the Temporary Assistance for Needy Families program and was widely seen as a success, creating jobs for 26,000 low-income people. At a rally in Chicago's Daley Plaza today, employer Paula Mitchell said she didn't understand the type of impact the program would have until she brought several women on using the funding. Watch:

During their debate this morning, GOP gubernatorial candidate Bill Brady lashed out at Quinn for the plan, calling it "as bad as your AFSCME deal." "You extended a program," he added, "that will cost the taxpayers $75 million so you could buy public sector jobs for people in the private sector." That criticism is a bit strange; a job in the public sector is no less valuable to people looking for work than one in the private sector. And demand for the program has been high specifically because so few private sector firms are adding employees to their staff.

Brady did raise a secondary concern we also share: should Illinois spend $75 million on a program Congress may not extend further when it owes literally billions to human service providers and other state vendors, many of whom are being forced to shed staff and cut programs because the state can't pay its bills on time?