The editors of the Wall Street Journal weigh in on Illinois’s budget:

In Illinois, Democrats spent the long weekend coaxing Republican legislators to join their suicide pact to raise taxes to plug a $6 billion deficit and pay down a $15 billion backlog of bills. And don’t forget the $130 billion unfunded pension liability—none of which will be solved by the $5 billion tax hike. GOP Governor Bruce Rauner vetoed the bill on Tuesday but may be overridden.

After credit-rating agencies threatened to downgrade the state debt to junk, Mr. Rauner proposed raising the state’s income tax to 4.95% from 3.75% and the corporate income rate to 9.5% from 7.75% for four years. In return he asked for a property tax freeze and modest reforms to workers compensation. Yet Mr. Rauner already signed off on a huge property tax hike in Chicago—homeowner bills have increased by a quarter in two years—to pay for teacher pensions.

But Illinois’s legislature refused to compromise. Now the budget they’ve enacted, no doubt overriding the governor’s veto, barely scratches the surface of Illinois’s problems. What’s the source of those problems?

Anemic revenue and economic growth can’t keep up with entitlement spending. The state’s GDP has ticked up by a mere 0.8% annually over the last four years compared to 2% nationwide and 1.4% in the Great Lakes region. Since 2010 more than 520,000 Illinois residents on net have fled to other states. (See the nearby chart for some state comparisons.)

The editorial goes on to consider Connecticut’s and New Jersey’s similar problems. Of course, there are some differences. Connecticut is the richest state in the Union on a per capita basis and both Connecticut and New Jersey are growing rather than contracting as Illinois is.

Looks like David Ignatius, augur of the conventional Washington wisdom, has come around to the point I made three years ago. From his recent Washington Post column:

Russian-American cooperation on Syria faces a huge obstacle right now. It would legitimize a Russian regime that invaded Ukraine and meddled in U.S. and European elections, in addition to its intervention in Syria. Putin’s very name is toxic in Congress and the U.S. media these days, and Trump is blasted for even considering compromise.

Against these negatives, there’s only one positive argument: Working with Russia may be the only way to reduce the level of violence in Syria and to create a foundation for a calmer, more decentralized nation that can eventually recover from its tragic war.

It might also give Washington a seat at the table in discussing Syria’s future, something it won’t have under present circumstances.

Being able to change course and take a new stance more cooperative with the Syrian government depends on the hierarchy of values. As long as regime change in Syria and poking a stick in Russia’s collective eye are more important than Syrian lives, it’s out of the question.

You can’t make an omelet without breaking eggs. Syrian eggs, of course. Okay, Washington, where’s the omelet?

Well, so much for the fierce urgency of now. As expected, yesterday Illinois Gov. Rauner vetoed the tax increase and the budget, the Senate quickly moved to override his veto, and the Illinois House adjourned without taking action. The Associated Press has the latest:

The Illinois House has adjourned without taking action on budget veto overrides that awaits it. There was not a quorum present to conduct business on the Fourth of July holiday.

The House didn’t convene until late Tuesday because the focus of the state’s two-year budget crisis was on the Senate.

The Senate approved a budget package that spends $36 billion on the strength of a $5 billion increase in the income tax. Rauner vetoed the package, but the Senate quickly voted to override, sending the legislation to the House.

Chicago Democratic House Speaker Michael Madigan of Chicago said shortly after the Senate action that there would be no House activity Tuesday, but he did not explain why and his spokesman couldn’t say.

Only 54 members answered the House quorum call. That prohibited lawmakers from taking action.

If I were the ratings agencies, I would examine the budget closely to determine if it actually resolved Illinois’s fiscal problems which I suspect it does not. If they were to find that it doesn’t, they should cut Illinois’s credit rating to junk.

What’s going on now is political posturing. The legislature has had three years to resolve the problem. They’re just running out the clock, hoping to have a more accommodating governor next year.

To put the tax increase into perspective, Illinois realized about $33.7 billion in revenues last year of which 47% was from the personal income tax. Increasing the tax by a third would realize roughly an additional $5 billion, assuming no run-on effects. Illinois has about $16 billion in overdue bills.

As predicted the Illinois Senate voted to approve the one-third tax hike in the personal income tax and as predicted Gov. Rauner has vetoed it. Politico reports:

Attempting to avoid becoming the first state ever to see its bond rating downgraded to “junk” status, the Illinois legislature on Tuesday sent Republican Gov. Bruce Rauner a $36 billion spending plan in a dramatic showdown that culminated in an extraordinary Fourth of July vote.

Rauner, who called the legislature into a special session to pass a budget, quickly vetoed the measure, citing its permanent income tax increase; the governor, who is attempting to salvage his precarious 2018 reelection prospects, has sought a temporary tax hike and a property tax freeze.

The Illinois Senate already voted to override the veto and the House is expected to follow suit Tuesday afternoon, setting up stability for the state as markets reopen Wednesday.

One of the lawmakers had this to say about the measure:

“We are in a moment in time,” state Sen. Toi Hutchinson, among the Democratic leaders in negotiations said on Tuesday. “We are faced today with the fierce urgency of now.”

It’s been three years since Illinois has had a budget. The legislators didn’t even bother meeting about the budget until June of this year. Under those circumstances “now” has a way of sneaking up on you.

The Democrats wanted a tax hike and, presuming the House votes to override the governor’s veto as is expected, they’ll get it. The last time the personal income tax was this high they did nothing to straighten out the state’s finances. It’s hard to believe they’ll do any better this time around.

What’s easier to believe is that Ilinois’s higher taxes will drive more people and businesses out of the state. Illinois is not California. We don’t have mountains or ocean or a benign climate to attract people. Illinois’s tax base is falling and its expenses aren’t. The state legislature needs to come to terms with that reality.

Every year my Chicago neighborhood, Sauganash, has a Fourth of July parade and every year I post the pictures I took of it. My neighbors gather to watch the parade.

The parade starts at Sauganash Park and comes right up my street. It’s led by a police car.

This year the police car was followed by two firetrucks, all with sirens blaring deafeningly.

Then came the local Boy Scout Troop.

There were classic cars, variously decorated for the occasion.

Local businesses also took part, including my beloved Happy Foods.

When I wrote “variously decorated” above I meant it.

But mostly and as I write every year, “parade” is a verb. There are many more of my neighbors marching in the parade than there are watching it.

And the 2017 Sauganash Fourth of July parade is over.

Our pals, the North Koreans, have tested a missile that apparently flew 600 miles before crashing into the Sea of Japan. CNN reports:

(CNN)North Korea claims to have conducted its first successful test of a long-range missile that it says can “reach anywhere in the world.”

Tuesday morning’s missile test, which was conducted on the orders of the country’s leader, Kim Jong Un, reached a height of 2,802 kilometers (1,741 miles), according to state broadcaster Korea Central Television (KCTV).
That’s the highest altitude ever reached by a North Korean missile, and puts the US on notice that Pyongyang could potentially hit the US mainland.

That puts the missile within striking distance of most of Japan’s population centers (and China’s). Here’s a handy table that lists the distances between Pyongyang and major world cities. Anchorage is 3,737 miles from Pyongyang. Honolulu 4,600. San Francisco 5,605.

My graver concern is that North Korea might decide to become one-stop shopping for anybody with money and a grudge. Hey, that DVD collection doesn’t buy itself.

There’s a very interesting article at The American Interest you might want to read. The Reader’s Digest version is that just about every change in the economy, society, politics, and the media from the decline of ESPN to the election of Trump can be explained by “disintermediation”,

…innovation that undermines established or incumbent structures. It cuts out the middleman or middle layers in a process.

Read the whole thing.

The American Interest speculates that progressives’ honeymoon with China will be short-lived, a consequence of President Xi’s crackdown on online content:

Nationalism and “healthy” family values are in, say the Chinese censors, while homosexuality and references to China’s past use of force against neighbors are out. And lest one think the guidelines were mere suggestions, the authorities have already begun to enforce them with severe force. As the FT reported last month, the government has already coerced top tech groups into deleting 300 mobile video platforms and firing 10,000 journalists who were in violation of the rules.

China has lately earned plaudits among Western liberal bien pensants for its paeans to the Paris agreement and rhetorical opposition to Trump’s protectionism. But China’s role as the liberal darling isn’t likely to last long as Xi turns key liberal beliefs into thought crimes.

They’re dreaming. One could hardly be less liberal than the Palestinians and they’ve been “liberal darlings” for the last 60 years. Before them the Soviets maintained that role for most of the 20th century, despite censorship of the media, active opposition to religion, and murdering tens of millions of their own citizens. There is a hierarchy of values and notionally liberal values fall way down on the list. The farce is strong with those ones.

It appears that I’m not the only one to whom Chicago Mayor Rahm Emanuel’s New York Times op-ed looked bizarre. Consider Kim Janssen’s reaction at the Chicago Tribune:

Eiither someone at The New York Times doesn’t like Mayor Rahm Emanuel very much, or the Gray Lady needs to brush up on her history.

How else to account for the unfortunate evocation of murderous Italian fascist dictator Benito Mussolini in the headline NYT editors put on Emanuel’s op-ed column about his work to improve the CTA in Monday’s Times?

[…]

So Emanuel, who rides the “L” to work once a week, seized the chance to gloat that “Modernizing our existing mass transit is one reason Chicago’s economy has expanded faster than the economies of New York and Washington, and faster than the national average for the last five years.”

But the impact of the mayor’s boast may have been overshadowed by the headline, which called to mind the old fascist trope that you can “Say what you want about Mussolini, but at least he got the trains running on time.”

Emanuel spokesman Adam Collins said Times editors picked the headline. “They chose it,” he said.

CTA passengers may quibble with the mayor’s assessment of the “L.” But fascists, take note: Historians are in broad agreement that Mussolini did not, in fact, make the trains run on time.

while the New York Daily News takes exception to it:

Congratulations to Chicago for having a transit system that’s so popular with its passengers.

Now try getting them home without anyone getting shot.

That’s the message New Yorkers had Monday for Chicago Mayor Rahm Emanuel, who threw New York’s subway system under the bus while touting the Windy City’s mass transit approval rating.

While straphangers from Dyckman St. to Ditmas Ave. were swiping their MetroCards, Emanuel took a swipe at New York City in an off-the-rails column about the Big Apple’s mass transit woes.

In an op-ed for The New York Times Monday, Emanuel puffed his chest out about Chicago’s famed L (short for elevated), boasting of an 85% approval rating that is as high as the Windy City’s elevated tracks.

You’ve got to ask two questions about the Mayor Emanuel’s op-ed. Why did he go to the New York Times? There’s something unseemly about it. And why did he pick touting his record with the CTA rather than Chicago’s more basic problems?

I think the answers are that other than the CTA he’s been a complete failure as mayor (is he really responsible for the CTA’s success?) and that the audience for the op-ed doesn’t use mass transit either in New York or Chicago. Their limo drivers take them wherever they want to go. He’s appealing to his small but select donor base, more likely to read the New York Times than the Daily News or the Tribune.

We should also consider that he may be raising money and burnishing his national credentials for a presidential bid in 2020. It’s pretty obvious that he isn’t particularly interested in Chicago.