The Worst Job in Politics

At Politico Theodoric Meyer wonders why anyone would seek to become governor of Illinois:

Illinois — the sixth-biggest state, by population — has seen its credit rating cut to near-junk status in the decade since the financial crisis. Its bonds are now considered as risky as those of Russia and Romania. Its pension system is in worse shape than that of almost any other state. Springfield, the state capital, has grown so paralyzed that Illinois’ own governor compared the state to “a banana republic.” And a bitter standoff between Rauner, a Republican, and Democrats in the state Legislature has left Illinois more than $7 billion in unpaid bills and a sense among the state’s residents and creditors that Illinois might not be governable anymore.

“The state is on the edge of financial collapse,” says Laurence Msall, president of the Civic Federation, a good-government nonprofit in Chicago. What scares budget experts the most is that Illinois is facing a fiscal crisis even as the national economy, and the state’s, is roaring ahead. The unemployment rate in Illinois is 4.1 percent. “If there’s a hiccup in the economy, if there is something that’s unexpected, Illinois does not have reserves to basically weather any economic downturn at this point,” Msall says.

He barely scratches the surface of Illinois’s problems. Not the least problem is that the state is effectively ruled by a man, sometimes called the “most corrupt politician in American politics”, who only needs to get 10,000 votes to stay in office.

A month from now multi-billionaire J. B. Pritzker will likely be elected Illinois’s next governor over incumbent billionaire Bruce Rauner. Pritzker is running on a tax and spend platform, most of the provisions of which are either violations of the U. S. constitution, the Illinois constitution, or impossible to get through the state legislature. It is fantasy as a substitute for policy. The legislature stands four square against any measure which might actually solve Illinois’s problems. Worst job, indeed.

5 comments… add one
  • CuriousOnlooker

    Yet two billionaires want the job….

    By the way; what would be the effect of having the cost of borrowing rise by 2% on Illanois’s finances?

    Largely ignored in the brouhaha of the last 3 weeks is interest rates are at a 7 year high. And likely headed higher as the 35 year downward trend in interest rates looks decisively over.

  • b

    But even as they rise to a seven year high, they are below historical norms.

    The federal budget will be devasted, too.

  • Guarneri

    Curious

    I doubt they issued floating rate instruments. So look at the debt issuances rolling over the next two years and simply multiply by 2%. You will need to find ILs cap structure to do it. BTW – I think 2% is low. IL instruments have not been issued recently at prevailing rates, but with sizable default premiums.

  • Guarneri

    I should have been more clear. The old rate of maturing debt plus 2% plus the number to get to the current IL risk rate. If you are enterprising enough I bet you can find a research paper doing just what you inquired about. I guarantee they know the number. The Pritzker of the world just don’t care. I feel sorry for Dave.

  • Gray Shambler

    Sounds like the background for a “Walker, Texas Ranger” drama.
    But in this episode, he gets bought off, and turns a blind eye.

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