Tuesday, December 9, 2008

Rod Blagojevich: Windy City Politics at its Best

December 9, 2008 marks the day the world gets an inside look into Chicago politics. This is not to say that people are unaware of Chicago’s tainted political image, as history has painted that picture very well. However, in lieu of the fact that one of Chicago’s own has just been elected President, people’s memories will be refreshed. Illinois Governor Rod Blagojevich was taken into federal custody this morning apparently before he could go for his morning workout.

“Blago,” as he’s often referred to in Illinois, has left his state in sheer disgrace. For those who haven’t paid attention, below is a summary of the Governor’s corrupt and idiotic policies:

Economic Policy

Far left lunacy is actually a kind description. Perhaps the most famous was his idea of a “gross receipts tax.” For those who have studied basic accounting, yes, you read that correctly. To clarify for those who haven’t, our governor thought it would be a brilliant idea to tax Illinois businesses on revenue BEFORE expenses are deducted. If Blago had a modicum of economic knowledge, he would realize that this type of taxation would not only stifle economic growth, but also increase the price of products and slow job creation. How so? Taxes are a cost to business, which is ultimately passed onto the consumer. Just as materials and labor are factored into the cost of a product, so is a company’s tax burden. When costs increase, business is forced to do more with less, which eventually leads to layoffs, and takes away the ability to use capital to pursue opportunities that lead to growth. A tax of this nature would simply drive business out of the state of Illinois. Why not relocate to neighboring Indiana? In summary, the outcome of a gross receipts tax would mean higher prices for consumers, less jobs and would ultimately LOWER tax revenue for the government. After all, if business leaves, there will be no tax to levy. Perhaps politicians at the federal level will take note of this and rethink our federal corporate income tax rate.

More recently, Blago threatened Bank of America by saying that the state would halt its dealings with the bank because it recently canceled a credit line to Republic Windows & Doors, a local factory on the verge of bankruptcy. Seeing that the current credit crisis stemmed from banks being required to comply with federal mandates that forced them to loan money to people who could not afford to repay, it’s not exactly a stellar idea that politicians use this kind of leverage to force lending institutions into making unwise decisions. Some politicians never learn, do they? Does this sound like extortion?


Speaking of extortion, let’s move on to what has brought about the federal charges Blago is currently facing.

Instead of working on a plan to replace President-elect Obama’s vacant Senate seat with someone who is qualified, he thought it would be better to auction it off to the highest bidder. Why not enlist it on EBay?!

Blago also threatened to illegally withhold state aid to the currently ailing Chicago Tribune on the sole basis that the newspaper’s editorial writers weren’t saying very nice things about him. He demanded that these writers be fired in order to receive aid. Since I do not receive state aid, I’ll continue on…..

One of the most famous plays in Chicago’s corrupt political playbook is the famous “pay-to-play” politics. If you are a contractor looking to do business with the state government, Blago will throw work your way in exchange for a campaign donation. The deeper your pockets, the more business you receive.

One can only wonder what more will be uncovered as the Feds begin to build their case. Plenty has already been caught on tape.

Illinois residents are left to wonder if the corruption will ever end. As comical as is sounds, Blago was brought in with the intent to end corruption. He replaced former Governor George Ryan who is currently serving a six-year prison sentence (currently seeking a pardon) on charges of racketeering and fraud. Instead, the corruption continues, and Blago enjoys the lowest governor approval rating in over three decades according to Chicago Tribune polls.

Blago joins a long list of Illinois politicians who have been tied to scandals. While President-elect Obama has not been charged with any wrongdoing in the midst of this controversy, he is cut from the same cloth of the corrupt Chicago political machine and shares many of the same political connections (Rahm Emanuel and Tony Rezko, for example). It would be unfair to accuse one political party of corruption, as both Democrats and Republicans have been convicted of crimes; however, the media has done a very good job downplaying the depth of corruption that plagues Chicago politicians. Obama faces an uphill battle in the eyes of those all too familiar with “Windy City” politics.

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