Wednesday Edition: Chicago's Debt Bubble

Population decline and crime are two high-profile issues plaguing Chicago, but will ballooning debt be the thing that actually sinks the city? (City Journal)

A few data points on the city’s debt and tax troubles from a new analysis by Judge Glock, director of research at the Manhattan Institute:

• Nearly half of Chicago’s budget goes to debt and pensions, leaving less for essential services.

• Chicago's debt totals almost $40 billion ($43,000 per taxpayer) and debt from the state of Illinois adds another $42,000 per taxpayer.

• Chicago has the highest sales tax of all the major cities at 10.25%, and combined city and state taxes consume over 12% of a median family income.

Glock: “An ever-mounting debt burden is the greatest threat to the city’s survival. As that problem worsens, more residents will question whether they want to stay in a windswept city paying down someone else’s pension—or decamp for places that don’t place such a millstone around their citizens’ necks.”

Chicago’s population has been falling for nearly a decade, and the people leaving Chicago tend to be high-income earners making $105,000 per year on average.

The debt burden certainly doesn’t help when it comes to other problems the city’s grappling with.

• Over 50% of high-priority 911 calls go unanswered due to budget constraints.

• The city’s downtown office vacancy rate hit nearly 24% this year, and major companies like Boeing, Tyson and Citadel have relocated within the past two years.

• The poverty rate is 50% higher than the national average.

Bubba’s Two Cents

The question for Chicago, just like for the U.S. at the national level, isn’t whether the debt crisis is bad (it definitely is), it’s whether it is a terminal problem that will end in sinking the city/country? In both cases, the jury’s still out so far.

Some Republicans who voted against a $1.2 trillion bipartisan infrastructure law passed in 2021 are now taking credit for the federal funds benefiting their districts. (Politico)

Rep. Nancy Mace, S.C.: In a 2021 Fox News op-ed,  Mace called the federal infrastructure law a “fiasco” and “socialist wish list.”

• Last year, the South Carolina congresswoman endorsed a project that granted her district $26 million in federal grant money for public transit.

• When asked about the apparent flip-flop, Mace told reporters: “What do you want me to do, turn my back on the Lowcountry when we get funding for public transit? Absolutely not.”

It’s not just Mace:

• Rep. Mariannette Miller-Meeks, Iowa, voted against the infrastructure bill but that hasn’t stopped her from touting projects funded by the $470 million promised to her district.

• Rep. David Valadao, Calif., praised $1.1 billion allocated to California’s Diablo Canyon nuclear power plant from the infrastructure law, despite his opposition.

• California Rep. Michelle Steel celebrated $8.3 million for Newport Harbor.

In fact, only 13 House Republicans voted for the bipartisan infrastructure bill, and they faced fierce intra-party backlash.

Bubba’s Two Cents

So this isn’t really about left vs. right (For one thing, Democrats also take credit for the other party’s work). It shows why getting things done in Washington is tough—reflexive partisan bickering much too often gets in the way of policy.

San Francisco officials might say building more housing is a priority, but their actions tell a different story. (Newsweek)

A shocking statistic: Housing affordability and homelessness are big problems in San Fran, and yet the city’s granted just 16 new home permits in 2024.

• Median home prices in the city have reached $1.4 million meaning buyers need a $500,000/year income to live comfortably.

• Data released last month found homelessness in the city was up 7% compared to 2022.

What Joseph Politano, a writer and Bureau of Labor Statistics analyst, told Newsweek: “In the short term, higher interest rates and a slowdown in the local San Francisco economy are hurting new permits. But more broadly, the city has a structural problem where its exclusionary zoning and planning restrictions prevent the construction of any new homes.”

Are red cities/states handling housing better than blue ones? Last year, Texas’ three largest real-estate markets added 300% more houses than California’s. And it’s hardly an isolated case, with places like New York, Boston and Seattle getting less affordable for prospective homebuyers.

Bubba’s Two Cents

There’s something interesting happening where in many cases red areas of the country (perhaps because they’re not as weighed down by extensive regulations) are doing a better job at enacting policies typically associated with blue cities/states. Texas’ high-speed rail project is going much more smoothly than California’s, GOP states are leading the way in wind and solar production and they’re doing pretty well when it comes to housing affordability, too.

As the pendulum swings away from sexual permissiveness, recent research finds a decline in on-screen sex in Hollywood. (The Economist)

A study from film-data analyst Stephen Follows: Sexual content in top-grossing films has fallen by almost 40% since 2000.

Drinking, drugs, violence and swearing have not seen a similar decline:

A big trend: We’ve seen a mainstream push to put boundaries around sexual freedom — but unlike in years past, it’s often progressives (not conservatives) who are driving it.

• Examples: The #MeToo movement, intimacy coordinators on film sets, the widespread shaming of "age-gap” relationships and an emphasis on consent culture.

• In 2022, two books — Christine Emba’s “Rethinking Sex” and Louise Perry’s “The Case Against the Sexual Revolution” — took aim at modern hookup culture from a feminist perspective.

• Even in radical alternative lifestyles like polyamory, there’s an emphasis on rules, with many polyamorous couples opting for “relationship contracts.”

New York Times columnist Ross Douthat: “From the start the #MeToo movement was criticized, usually from a libertarian or classical liberal perspective, for reviving socially conservative or even Victorian impulses under a feminist and progressive guise. But it was precisely that remix that made the movement interesting: #MeToo took what had often been a conservative-coded critique of the sexual revolution — one that emphasized the ways that [Playboy founder Hugh Hefner] made life easy for pigs and libertines, forcing young women to accept male sexual expectations in the name of liberation — and promised to make it serve a more progressive and egalitarian vision.”