Fed Candidates Cross a Line; Illinois Finds Its Way
- Lessons from Illinois
- Sino-Nippon Trade Relations
- The Fed’s New Face(s)?
Illinois is a median among U.S. states. Geographically, it sits in the middle of the country. Of the 50 states in the union, it was chronologically the 21st to enter. By land area, it is the 25th largest state, connecting the Great Lakes on its east to the Mississippi River on its west. Its population and economy have much in common with the rest of the country.
Like many states, Illinois must strike a balance between its urban core, Chicago, which contains the majority of its population; and the rural expanse that represents the majority of its space and natural resources. Its capital, Springfield, sits in the middle of the state, a three-hour drive from Chicago, assuming no traffic. The concerns of urban residents, like gang violence and public transit, are unfamiliar to those in the rest of the state. These differences in location and lifestyle are much like the gaps between New York City and Albany; Los Angeles and Sacramento; Miami and Tallahassee.
Illinois is also emblematic of the dire fiscal state of U.S. states. While Illinois faces a uniquely difficult challenge, it offers lessons to others seeking to avoid bad outcomes.
As we discussed last year, decades of neglect in funding pensions for state workers drove Illinois’ finances to the brink of a junk credit rating, while a political standoff nearly brought the state to insolvency. Illinois has also borne the downside risks of trade conflicts. Illinois’ farmers have made it the leading producer of soybeans among U.S. states, while its already-struggling manufacturers had to absorb higher steel and aluminum prices.
Since our last writing, a new governor has taken office. The expensive campaign between two self-funded businessmen has been a recurring theme in many gubernatorial races. Also common across the country has been the “outsiders” promising to lead with a business perspective instead of the entrenched views of career politicians.