POLITICS - Carlini's Comments

THREE CRITICAL ISSUES FACING MANY STATES

Filed Thursday, May 7. 2009

The three most critical issues facing Illinois today are job erosion, education and network infrastructure. These issues aren’t unique to Illinois, I observed on last week’s Comcast “Newsmakers” program on the CNN channel.

With so many people across the country focused on financial recovery, mortgage refinancing and personal and local economic recovery, the roots of the problem are common and run deep.

It’s said that now one out of five houses have been impacted in the mortgage and market value debacle. They’re under water as far as what they’re worth as compared to what their owners owe on their mortgage. It used to be one out of 10.

The financial and economic experts claiming that this mortgage issue was confined to only the subprime mortgage holders (which was only about 2 percent of the market) really missed the boat in their calculations and analysis of the total economy. Getting e-mails like this on distressed properties is a clear indication that the economy has been hit by a tsunami:

Sold on Feb. 17, 2007 for $323,300. Now $99,000. Fully furnished two-bed, two-bath condo near Disney World. Brand-new $25,000 furniture package included! Five days only! This will not last!
Exclusive amenities in condo community: 24-hour gated entry, 24-hour security, community pool and spa, clubhouse, fitness center and tennis court

What Triggered the Tsunami?

All you have to do is drive around and see all the problems. The real problems hit you in the face when you drive into an industrial area whether it’s in Chicago, Schaumburg, Racine, Milwaukee or so many other cities and suburbs. Look at the empty factories and industrial buildings.

Those all housed companies that provided jobs. Those jobs created salaries that were spent locally at the surrounding shops and restaurants. They are now closed, too. Higher-paying jobs bought out-of-state vacation houses

Now those markets are being severely hit with crashing prices. Where did the companies all go? Some companies just closed up permanently while others moved operations out of state or out of the country. Why did they move out of state?

There are several reasons, but when we focus on Illinois, the tax rates are too high. Another reason is because there are other states offering better incentives to locate a business in their state. They want those businesses to sustain their regional viability.

So, what’s the solution being thought about by some Illinois politicians?

Raise taxes? Event the three blind mice can see that this won’t work. Doesn’t that approach parallel the classic “Three Stooges” strategy of getting water out of a sinking boat by drilling more holes in its hull? Sure, it sounds good, but it just accelerates the very thing you want to stop.

If high taxes drove some companies out, increasing taxes again will drive more out and not create larger tax revenues. This is so moronic. They better get a better strategy in place. Calling Sen. Howard, Gov. Fine and Rep. Howard! Get busy.

Education

More money is not needed for education. Reform is needed first. We keep throwing money at an anachronism and it’s not working. Public schools were created to develop a work force for the Industrial Age. The three “R”s that students learned were rote, repetition and routine.

These were the skill sets needed for assimilating into Industrial Age factory jobs. We are way beyond the Industrial Age, past the Information Age and now into the mobile Internet Age. Still, the educational strategy hasn’t changed.

The new skill sets needed are flexibility, adaptability, creativity and technology (FACT^©) skills. There are the skill sets needed for today and tomorrow. What are your kids learning? If they’re not learning FACT^©, they might as well be practicing “welcome to Wal-Mart” or “do you want fries with that?”

Network Infrastructure

Working on creating a world-class network infrastructure can alleviate the other two problems. The infrastructure creates a solid platform for commerce that businesses can build upon. We need to make sure all the infrastructure can support commerce and secure regional sustainability.

The increase in established businesses will build up the tax revenues. This can help develop and sustain better schools.

Did You Know Crime is Up?

What happens if no action is taken on these three issues? You don’t need someone with a doctorate to understand crime goes up when the economy goes down. More robberies occur and people react to a less secure environment. Crime is up 77 percent on the CTA.

Depending on who you talk to, many people are focusing on defending their house and property, changing paper money in hard coin currency (i.e. gold and silver) and other actions that some naïve observers would describe as survivalist.

Forget the lost-in-their-office economists who think everything distills down into a bar graph or pie chart. Their explanations are laughable at best and utterly clueless at worst. We need to address the three critical issues. Only then we will see a better turnaround in Illinois as well as the other states that are affected by these issues.

The strategic triad of state government – the governor, House of Representatives and the Senate – should not invoke a strategy from the “Three Stooges” to solve major issues.