By: Mark Glennon*
Boy, do I get emails here. A regular one in particular makes me squirm. It’s not any of the insults like “vulture capitalist” or “pension thief.” Those are fine. Have at it.
It’s when I’m asked by Illinoisans, usually young ones, whether they should leave. I’m uncomfortable playing career planner, especially when financial interests have to be balanced against personal issues like leaving one’s home and family. Most importantly, there’s no single answer. But I can’t escape the question, especially when asked what I am doing.
Let’s take the economic self-interest matter first since that’s most important for young people raising a family. Some readers seem worried our fiscal mess could spark a kind of sudden, systemic failure — something like we faced in 2008. No, I’m comfortable saying that’s not a risk (though national and international risk on that is another topic). Banks won’t close or anything like that and there won’t be one big “pop.”
It’s the risk of slow death we face, and the pain will worsen in the near term. Some sectors will thrive even as the crisis deepens. Tech, most parts of finance and many other white collar service sectors now performing well probably will remain insulated. Some are benefiting from lower costs driven by out-migration. Aside from those, there are no safe generalizations to make.
Owning a home or other real estate is a bad proposition in all but a few places in Illinois, in my honest opinion. Suicidal property taxes have already obliterated dozens of Illinois communities, and that list will grow. They can be rehabilitated only in bankruptcy, which is off the table as long as the General Assembly stays blindfolded about authorizing that. Parts of Chicago and some select communities, mostly prosperous ones, have held up quite well and continue to appreciate. Maybe their gains will extend as buyers become even more cautious about avoiding all but the most stable areas, but nobody really knows.
For my part, I’m betting we’ll turn it around but it will take another six or seven years, with much more hardship between then and now. My youngest child graduates from high school about then. If we haven’t revolutionized how we do things by then, there’s no way I would stick around to pay the pensions and other bills run up on us — immorally, in my view.
That’s also about when Rauner will complete his second term. Whether you like his approach or not, his is the only viable alternative. Either he will succeed or Illinois will fail with him.
“Fight or Flight” was the theme of a short stump speech I heard last week from a new candidate for state rep, Jessica Tucker. For those of us who don’t need to make early career financial issues our main concern, that’s the alternative we should accept. Tucker is choosing to fight, as are many others. Comptroller Leslie Munger is another. I got to know her when she first decided to run for office. She was heartbroken to have seen her son leave for better job opportunities elsewhere, and she decided to do something about it.
This is not a vain crusade for principle. Not tilting at windmills. If there’s anything I learned in years as an investor, it’s to cut and run fast on lost causes. I wouldn’t be spending most of my time on this and other unpaid work if I thought Illinois’ political establishment is unbeatable.
Flee if you must, but if you stay, accept Tucker’s alternative as the only one. Fight in whatever way you can. The Illinois political establishment must be destroyed.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.