Chicago Daily Observer

Illinois’ horse-racing industry will get to keep a multimillion dollar subsidy from the state’s most profitable casinos for three more years under legislation now headed to Gov. Blagojevich.

The House and Senate approved a plan to skim 3 percent of revenues off the four richest casinos and divert that money to racing—a subsidy worth at least $30 million annually for the next three years.

The plan passed the Senate 37–13, with five voting present. The House approved it 88–16, with one present vote.

Reports filed by the publicly traded banks provide a counterpoint to the national concern that businesses can’t borrow because banks are hoarding their cash, Moot said. “All the data we’ve got doesn’t point to a slowdown in lending,” she said.

Nationally, some economists have made similar points. In a paper last month for the Minneapolis Federal Reserve, three economists said bank credit continued to rise, at least through Oct. 15, as have the total amounts of loans and leases.

But Harvard Business School professors Victoria Ivashina and David Scharfstein said in their own paper that loan totals are growing partly because companies are drawing down previously arranged lines of credit. Also, several economists at the Federal Reserve Bank of Boston wrote this month that the amount of loans banks keep on their balance sheets is growing because they can no longer sell loans to be packaged into other securities.

Still, ... Read More...

Valerie Jarrett—pal of a U.S. president-elect, confidant of the country’s most powerful mayor and veteran of corporate boardrooms—has perfected the art of networking, Chicago style.

Now that Barack Obama has drafted her to be a senior adviser, a key conduit between the White House and state and local officials clamoring for the president’s ear, Jarrett’s skill set will be put to the ultimate test.

She is “incredibly plugged in,” said banker William Daley, brother of Democratic Mayor Richard Daley. “I can’t think of another female on everybody’s list for a corporate board seat.”

The White House appointment means Jarrett, 52, will give up her job as chief executive of Habitat Co., one of the Midwest’s largest property-management firms. She has already begun to step down from an array of civic boards and from corporate directorships that have brought her more than $350,000 a year in cash and benefits.

We’re told consumer confidence is at an all time low. Is it? Is it any lower than it was in 1979? Or are we just being fed more negativity on a daily basis?

The questions are posed because there is more than one way to look at the current economic situation. For example, all the focus is being put on homeowners who are losing their homes because they can’t pay their mortgages. But there is another side to the story that isn’t being talked or written about. The vast majority of Americans are paying their mortgages and are not in danger of losing their domiciles. So why is most attention is going to those who have sub prime loans or who have overstepped their ability to buy the home they have purchased?

It’s said a good offense is better than a defense and that’s exactly what some in Washington are ... Read More...

From day one of his administration back in 2003, Illinois Governor Rod Blagojevich told the people of Illinois it wouldn’t be business as usual. He was right. It’s been business worse than usual. Calling himself a reformer and promising to shake things up, Blagojevich has found new and creative ways to benefit his own campaign chest while doing nothing to eliminate the perception of Illinois as the Wild West of politics.

Under the guise of extending union protection to individuals who work as home health care personal assistants and home daycare providers, Blagojevich created a whole new pool of people from which the Service Employees International Union (SEIU) could collect dues, a portion of which is used for campaign contributions – a union which at the time of his taking office had already given Blagojevich more than $800,000 in campaign contributions.

Less than two months into his first term, Blagojevich ... Read More...

With yesterday’s 400 point drop, the Dow has dropeed more than 21% since Barack Obama was elected president.

Until the election of Obama, a drop of 20% colloquially defined a Bear Market, though it looks as though the media may need to redefine the term to promote hope and change, as a news search on Obama and Bear Market brings up the Chicago Daily Observer, and no other stories post-election.

Taking secretary of state puts Clinton directly under Obama’s thumb. She could be removed by the president at any time and as private citizen would be out of the news altogether. She also would be involved in a dog-fight to determine who’s making policy. Obama certainly would want the lion’s share of credit for foreign policy moves…and as with all presidents would see that if things didn’t work out, the blame would be placed on the secretary of state.

In addition, Hillary would be bumping up against the national security director whomever that ... Read More...

Sen. John Cullerton won the Senate presidency late Wednesday, while Senate Republicans broke a historic glass ceiling by tabbing Sen. Christine Radogno to be their Statehouse leader.

Backed by Mayor Daley, Cullerton (D-Chicago), 60, drew unanimous backing to succeed retiring Senate President Emil Jones (D-Chicago) after defeating two rivals for the post.

In the 1970s, GM needed to either fight the UAW to the death to get its costs down, or to abandon the small car market and focus on large vehicles. It lacked the courage to do the former, and the Corporate Average Fuel Economy (CAFE) law, which was passed in 1975, prevented it from doing the latter.

It is difficult to overstate the damage that CAFE has done to GM over the years. The entire purpose of CAFE is to force companies like GM to do something other than build and sell the vehicles that would earn them the greatest profit. Otherwise, there would be no point to the law.

CAFE has bled GM of tens of billions of dollars in profits over the years. If they had all of those dollars in the bank today, they would not be on the brink of bankruptcy. Read More...

To which Jarrett replied, “It’s ironic that you would say that it’s the Democrats that are responsible for big government because government has grown enormously over the last eight years.”

That was a significant concession from the Obama camp because the advocates of activist government like to portray the Bush years as “laissez-faire” and “do nothing.” Obama surrogates spent much of the campaign saying that it makes no sense to put people who hate government in charge of it.

With another 427 point drop today, the Dow Jones Industrial Average has dropped 16.66% since Barack Obama was elected to become President of the United States.

Welcome to reality, President-Elect Obama. Any chance of putting your tax increases and tariffs on hold indefinitely?

The Chicago City Council is debating the 2009 budget. Clout Street’s City Hall reporters are there and live-blogging the proceedings. Please scroll down for earlier updates…

Updated at 1:18 p.m.

Aldermen approved the budget 49–1, with Ald. Billy Ocasio (26th) the only vote against.

Updated at 1:07 p.m.

Aldermen appear to be nearing the end of the budget speeches and as expected, Daley’s budget looks like it will pass.

Ald. Virginia Rugai (19th) said this economic situation is far worse for the city budget than other hard times in 1992 and 2001.

“They look so insignificant in comparison to now,” said Rugai, who added that she’s voting for the budget.

Ald. Richard Mell (33rd) said the recession has hit Chicago like a tsunami, but the worst is yet to come.

“My fear is what’s going to happen next year… Next year could be like a meteor hitting Chicago and the ... Read More...

Have you heard the latest fashionable anxiety? It’s not about economics at all.

It’s orthorexia: an obsession with healthy eating.

The term was first used in 1996 by the American physician Steven Bratman, as told by Michael Pollan in his new book, In Defense of Food. The book exposes the forces behind America’s poor eating habits—particularly the powerful marketing of processed foods—and offers advice on how to circumvent them.

It’s no secret that, for all our talk of health and fitness, Americans are overweight and suffering from heart disease, cancer and diabetes in alarming numbers. Remember back when 60 Minutes did the segment on the French Paradox? That’s the notion that French people freely consume foods like brie and fois gras and swill copious amounts of wine, yet remain slim and healthy. (Sales of red ... Read More...

“We may think we can prosecute and incarcerate our way to a less violent society, but it is going to take more than that.”

U.S. Attorney Patrick Fitzgerald said that Tuesday in his speech to the Lake County Bar Association at Greenbelt Forest Preserve.

Fitzgerald said public corruption gets all the headlines—Tony Rezko, former Chicago Ald. Edward Vrdolyak and Republican power broker Bill Cellini—and violence gets far fewer.

“People are tired of worrying about guns, gangs and drugs, but people are imprisoned in their own homes, afraid to go out even in the middle of the afternoon,” he said.

The upstart and lower-fare Virgin Airlines’ plans to initiate service at O’Hare Airport, and thus bring competition, more jobs and economic development to the Chicago area, appears jeopardized by the sweetheart deal between the Daley administration and the legacy airlines that control the airport.

Which raises the question: When will someone, especially in the business community that is so dependent on air travel, finally get mad on the lunatic ways of O’Hare Airport.

Virgin Airlines, which provides international service from both coasts, has been planning a major expansion into America’s heartland, with O’Hare as its base. But it has been stymied because it has been unable to lease gates at the airport, even though more than enough are sitting idle. Virgin said it will have to decide in a few weeks whether to cancel its O’Hare plans and look for another alternative. Meaning, I assume, another Midwest city in which ... Read More...