CN Nov. 13, 2014

 

What do the election of Bruce Rauner, container ships, shopping malls, student loans, unemployment numbers, giant paving machines and Google have in common?

Well, they’re part of the economic theory of everything, perhaps.

Tribune Business columnist Melissa Harris tells us that in today’s world, “All politics is local but all business is global. We are not the maker of things any more. That is a structural change in our economy that we are still grappling with. It does not mean we still can’t be a global leader. It doesn’t men we can’t be the most thriving economy in the world, but it is gonna take a greater investment in education, which this country is currently not making.”

Globalization has raised living standards in many places and lowered them in others. As she recently reported, Americans who were under 35 in 1995 earned wages that were 9% higher than today after adjusting for inflation. Student loans are crushing our youngest generation.

“They now exceed credit-card debt,” she explains. “You’re seeing difficulties acquiring jobs right out of graduation. It starts from the beginning. What people don’t understand is that the money you earn compounds. So if you struggle right from the beginning, you’re gonna be at a disadvantage when you’re seventy and it is nearly impossible to catch up.”

If you happen to be poor, finding decent affordable housing is becoming more and more difficult. And it’s not made any easier when your landlord can’t find money to fix that leaking roof and he can’t ask his already stressed tenants for any more rent. That’s what Micah Maidenburg wrote about in this week’s Crain’s Chicago Business. A DePaul University study found that it’s pretty easy for a property-owner downtown or in one of Chcago’s booming neighborhoods to get that new-roof loan, but in the wide swaths of Chicago that aren’t bathed in money, the banks are lending far less.

“If a bank is making a loan they have to ask themselves, if this goes belly-up and we foreclose and have to take back the property, it’s easier to sell a 20-unit apartment building in Lakeview than it is in the more distressed markets,” Maidenburg tells us.  So it’s not that there’s no money being lent in south and west Chicago, its just that it’s disproportionately less. And that deepens the cycle of poverty.

Melissa Harris tells us that Bruce Rauner’s transition team has been put in place, but, as is often the case, there’s a different, closer-in group of informal advisors who will have great influence with the new governor. They include:

Ron Gidwitz, the multimillionaire who in 1996 sold his family’s business, Helene Curtis Industries, for more than $900 million. He ran for the Republican gubernatorial nomination in 2006.

William Strong, a longtime friend and business associate of Rauner’s, who helped raise money this year in Illinois for the Republican Governor’s Association.

Phillip o’Connor, a policy expert who served Republican Gov. Jim Thompson as former chairman of the Illinois Commerce Commission and director of the Illinois Department of Insurance.

John Gates, Jr., a wealthy business executive. He sold Centerpoint Properties Trust, a real estate company he co-founded, for $3.5 billion in 2006.

So what does this all have to do with paving machines, container ships and Google? Well, the paving machines have put countless road construction workers in the unemployment lines, the container ships are what started the rush to globalization, and Google – well, Google is only a few years away from worldwide domination, right?

 

 

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About Ken

Ken's the host of Chicago Newsroom. A former news director, reporter and radio program host, he's also a past Vice President of the Chicago Headline Club.
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