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Required Reading on Income Inequality and Chicago’s Fiscal Mess

Don Rose 28 June 2016 One Comment

Taking a breather from Brexit’s horrors, Trump’s atrocities and Rahm Emanuel’s inability to remember why four cops who worked in his campaign were given plum assignments on his security detail, let me introduce you to two brief, locally published books–one on the macro issue of income inequality, the other on Chicago’s economic travesties.

From the Occupy Wall Street movement to Bernie Sanders’s presidential campaign–with Frenchman Thomas Piketty’ surprise best-seller “Capital in the 21st Century” and Joseph Stiglitz’s “The Price of Inequality” between–it’s clear income inequality is not only America’s central problem, but the world’s. Decades ago, visionaries such as Richard Rothstein recognized that.

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Among the remedies are a renewed labor movement and a $15 minimum wage. But you needn’t wade through Piketty’s statistic-filled doorstop of a book to understand inequality’s complex causes, effects and prospective remediation.

Economics writer and manufacturer Michael Collins has collected 19 of his recent essays from major business journals detailing how and why income has redistributed upward from the working middle class to the top 10 percent and eventually the 1 percent. He concludes with a multipronged program to level the economic playing-field–though much seems out of reach in today’s political environment.

Collins’s “The Rise of Inequality & The Decline of the Middle Class” nevertheless remains a valuable tool for understanding the most destructive issue of our times next to climate change.  (First Flight Books, 178 pp., $15 from Amazon.com)

Closer to home, in “Chicago is Not Broke: Funding the City We Deserve” local activist Tom Tresser brings together 11 new essays from respected experts on Chicago’s misbegotten budget, the high cost of corruption and police abuse, along with progressive revenue proposals.

While much of the content in those chapters has been published in other forms by their authors, including budget maven Ralph Martire; corruption sleuths Dick Simpson and Tom Gradel; award-winning journalist Jamie Kalven; and economist Bill Barclay, among the most valuable is an explication of Chicago’s controversial Tax Increment Financing (TIF) program by Tresser, who may be best known for leading the fight against holding the 2016 Olympics here.

Designed originally to aid blighted communities through a complex manipulation of various designated areas’ property taxes, TIFs for the most part have robbed the poor to give corporate welfare to the rich. (The Chicago Reader’s Ben Joravsky has done brilliant work on the topic.) Billions of dollars have been secretly kept off Chicago’s books to create a political slush fund that has handed $5 billion to private interests since 1986 but could add $421.5 million annually to schools and city agencies if the program ended.

In sum, were we to rationalize our budget, eliminate corruption and the high cost of police abuse, enact a graduated state income tax and financial transactions tax, end toxic-swap bank borrowing, create a public bank and end TIFs, this volume estimates–based on concrete data–Chicago could realize $5.5 billion annually in new savings and revenues. Yup, much blue-sky stuff in this useful compendium, but we wouldn’t be inducing heart-failure with next month’s property-tax bills.

Order “Chicago is Not Broke” (95 pp, $12) from www.wearenotbroke.org.

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Don Rose is a regular columnist for the Chicago Daily Observer

One Comment »

  • Harlyn Rohr said:

    The New York Fed moved it’s operation to the “BANKRUPT” Chicago Fed “WHY ?” Neil KashKari’ the new Minneapolis Fed Chief and former assistant under Hank Paulson in charge of the “TARP FUND PROGRAM” is making public waves about future Banking practices . what’s the Minnesota connection ? Chicago is the most in debt city in the U.S. making it the most corrupt “PERIOD !” Minnesota / Minneapolis Fed is rolling in surplus cash which obviously leaves Kashkari & Minneapolis Fed in the “CAT BIRD POWER SEAT” in U.S. Banking circles !

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