From the Dennis Gartman Letter:
CAN ILLINOIS REALLY BE THAT
STUPID?: Illinois is, for all intents, insolvent. We
can let the accountants and the lawyers take issue with
this statement for we are not accountants here and
certainly we are not lawyers writing TGL each day, but
from our perspective this is our perception of that
important Midwestern state, once our home. Spending
has gotten out of hand in the âPeopleâs Republic of
Chicago,â and it is taking the rest of Illinois down with
it. As Lily Tomlin used to day, âAnd thatâs the truth!â
What concerns us is Illinoisâ approach to fixing the
What concerns us is Illinoisâ approach to fixing the
problem. Rather than chopping spending on frivolous
programs, Illinois is taking the Leftâs preferred way to
fix the problem: it is raising taxes on its citizens and it
is raising them violently. Facing insolvency⦠and
ahead of a new, more Republican legislature that was
to be seated yesterday⦠the out-going state
legislature pushed through a 67% state income tax
increase!. The sheer audacity of that move still has us
in awe⦠and shock. The measure passed the stateâs
House of Representatives a few nights ago on a 60-57
vote and then passed through the Senate in the wee
hours of the next morning 30-29 vote. This is utter and
complete nonsense; this is governance of the first and
worst type.
We watched yesterday then as the Governor of
Indiana, âMitchâ Daniels, openly applauded the
decision made by the legislators to his west, knowing
that his state shall be the beneficiary of jobs and
businesses that shall be leaving Illinois and making
their way to Indiana to escape this tax increase. At the
margin, this will indeed happen, and at the upper end
of income levels this will happen even more
substantively. Attorneys that can do business from
anywhere will, at the margin, leave Chicago and make
their way to Indiana [Ed. Note: We do acknowledge
that some may not consider this a benefit to the good
people of Indiana.]. Accountants will do the same;
doctors from Chicago and from downstate within miles
of the Indiana/Illinois border will do so also.
Manufacturing jobs on the south side of Chicago will,
where possible, fold their operations there and make
their way to Indiana.
Up north, retail operations on Chicagoâs north shore
will pack up and move to the suburbs of Milwaukee in
Wisconsin. The âarbâ between real estate values in
northern Illinois and southern Wisconsin, or between
south side Chicago and western Indiana will narrow in
the favour of Wisconsin and Indiana following this
idiocy by the Illinoisâ legislature.
We are willing to bet that two years hence, even with
the economy doing better nationally, that Illinoisâ overall
tax âtakeâ from its citizens will be lower than where it
was in â10 while the tax revenues raised by Indiana
and Wisconsin shall be higher. The âgoodâ done by the
legislators of Illinois for the states of Indiana and
Wisconsin should be applauded⦠and will be⦠by the
good people of the latter two states, and should be
condemned⦠and will be⦠by the citizens of Illinois.
Can Illinois really be that stupid? Apparently it can be.
CAN ILLINOIS REALLY BE THAT
STUPID?: Illinois is, for all intents, insolvent. We
can let the accountants and the lawyers take issue with
this statement for we are not accountants here and
certainly we are not lawyers writing TGL each day, but
from our perspective this is our perception of that
important Midwestern state, once our home. Spending
has gotten out of hand in the âPeopleâs Republic of
Chicago,â and it is taking the rest of Illinois down with
it. As Lily Tomlin used to day, âAnd thatâs the truth!â
What concerns us is Illinoisâ approach to fixing the
What concerns us is Illinoisâ approach to fixing the
problem. Rather than chopping spending on frivolous
programs, Illinois is taking the Leftâs preferred way to
fix the problem: it is raising taxes on its citizens and it
is raising them violently. Facing insolvency⦠and
ahead of a new, more Republican legislature that was
to be seated yesterday⦠the out-going state
legislature pushed through a 67% state income tax
increase!. The sheer audacity of that move still has us
in awe⦠and shock. The measure passed the stateâs
House of Representatives a few nights ago on a 60-57
vote and then passed through the Senate in the wee
hours of the next morning 30-29 vote. This is utter and
complete nonsense; this is governance of the first and
worst type.
We watched yesterday then as the Governor of
Indiana, âMitchâ Daniels, openly applauded the
decision made by the legislators to his west, knowing
that his state shall be the beneficiary of jobs and
businesses that shall be leaving Illinois and making
their way to Indiana to escape this tax increase. At the
margin, this will indeed happen, and at the upper end
of income levels this will happen even more
substantively. Attorneys that can do business from
anywhere will, at the margin, leave Chicago and make
their way to Indiana [Ed. Note: We do acknowledge
that some may not consider this a benefit to the good
people of Indiana.]. Accountants will do the same;
doctors from Chicago and from downstate within miles
of the Indiana/Illinois border will do so also.
Manufacturing jobs on the south side of Chicago will,
where possible, fold their operations there and make
their way to Indiana.
Up north, retail operations on Chicagoâs north shore
will pack up and move to the suburbs of Milwaukee in
Wisconsin. The âarbâ between real estate values in
northern Illinois and southern Wisconsin, or between
south side Chicago and western Indiana will narrow in
the favour of Wisconsin and Indiana following this
idiocy by the Illinoisâ legislature.
We are willing to bet that two years hence, even with
the economy doing better nationally, that Illinoisâ overall
tax âtakeâ from its citizens will be lower than where it
was in â10 while the tax revenues raised by Indiana
and Wisconsin shall be higher. The âgoodâ done by the
legislators of Illinois for the states of Indiana and
Wisconsin should be applauded⦠and will be⦠by the
good people of the latter two states, and should be
condemned⦠and will be⦠by the citizens of Illinois.
Can Illinois really be that stupid? Apparently it can be.
