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State Comptroller Dan Hynes blasts Bush for the loss of manufacturing jobs in Illinois in his most recent U.S. Senate campaign radio ads. Hynes wants to be the Democratic Party's winner in the March 16th primary.

Tuesday, February 24, 2004

By Ralf Seiffe

The only notable impression that Dan Hynes has made in this campaign is his advertisement in which a Kerry-like voice tolls the Illinois jobs supposedly “lost” by George Bush.

This puerile advertisement -- and his web site -- verges on hate speech. It demonstrates Hynes isn’t acquainted with basic economics and why he should be prohibited from ever being anything more than a tax collector.

Regardless of Hynes’ misapprehension of the reasons Illinois finds itself in such desperate economic straights, jobs will be on the mind of the voters in March and again in November.

Republicans are counting on the economic recovery to take away any edge the Democrats might make of the economy, and, in most states, this is probably a winning strategy.

That plan won’t work in Illinois because our economy has fallen so much further, over a much longer period of time, than has the average state. For a number of structural reasons of our own making, Illinois will not create enough jobs to make any difference to Republicans by November. So, for the Republican Senate nominee to have any hope of victory, he’ll have to derail Hynes’ charges.

Republicans tell us “creative destruction” is good because it shifts low-value work to the rest of the world while we concentrate on developing higher-value, more rewarding work.

At one time, Illinois was a beneficiary of this process. Agriculture moved from the eastern seaboard when farm implements substantially improved the productivity of Midwestern farmers and vastly increased their operating scale.

We benefited again when the steel industry mushroomed at the bottom end of Lake Michigan. There are even good contemporary examples like the guy who used to build mimeograph machines in Niles for $13 an hour but who now services Japanese-made photocopiers for $27 an hour in infinitely better working conditions.

The reason we attracted these industries was we had compelling economic reasons. We had the world’s best farmland, a clean harbor that could be transformed into a steel city and an industrious and hard-working populace. In addition, the support structure in our state was able to make any tool, erect any building or integrate the technology necessary to succeed at making what was required.

Illinois’ expertise also included the softer industries such as retailing, catalog operations, architecture, banking and entertainment. It’s hard to believe that the radio industry (what later became television) was once bigger here than in New York or California.

These industries are mostly all gone. They left a long time ago, Mr. Hynes, long before Mr. Bush---either one---became president. Not only have they moved to foreign countries, they have gone to North Carolina, Texas, Ohio, Florida and other places with the same minimum wage.

Among the reasons businesses leave is that Illinois has become less competitive, duller and more hostile to job creators than we realize.

There are two main reasons.

The first is that the rest of the world has learned how to do the best part of what we know and, therefore, much of our competitive advantage has eroded.

The second reason is that we have not sufficiently reinvested in our private physical and intellectual assets to maintain our once convincing comparative advantage.

Instead, we’ve allowed Illinois government to put itself first and to shift cash flow from productive investments into taxes. Our representatives have used that cash to replace our persuasive economic advantages with the grey mediocrity the public sector produces.

So, Mr. Hynes, while your ad shows a remarkable command of an obvious problem, it’s not very useful in solving it.

The troubles Illinois faces cannot be remedied by enacting the laundry-list of federal programs your web site espouses---quite the contrary. Your first priority appears to be the design of a bigger public trough rather than to make Illinois an attractive place for businessmen to invest. The site’s evident odium for business profits and taste for wage controls tells businessmen who can create new Illinois jobs to "Stay Away!"

There are a number of specific, useful tasks our state can undertake to attempt to reverse our decline.

The place to start is to recognize the profundity of the problem. Businessmen have the choice of an ISO-registered manufacturer in Shanghai or Customer Service representatives in Bombay who command the English language better than most Chicago public school students.

On the other hand, they can choose to set up a plant Pilsen and deal with every public sector failure: the under-educated, the regulatory thicket, the huge burden of explicit and implicit taxes, as well as the Illinois politicians who look at them with the contempt your site exudes.

There is an easy answer to this ad.

It is one the eventual Republican nominee for U.S. Senate must master and convince Illinois voters: jobs don’t leave Illinois because Mr. Bush so decrees. They leave because Mr. Hynes, the other illiterati of the Democrat Party and their allied RINOs have made careers squeezing cash and privilege from the owners of these businesses.

Entrepreneurs work 70 hours a week to keep their businesses here, not abdicate to Korea or China or Mexico. Eventually, however, some revenue agent, a labor department hearing examiner or a building inspector with an open palm wakes them up to the fact that there are other places to do business. They realize they can choose to forego the self-centered nature of Illinois government and the politicians who run it.

Many employers---large and small---have made that choice and that’s the real reason why the corporate obituaries list in Mr. Hynes’ radio advertisement is such a long one.

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Ralf Seiffe advises business start-ups and product launches from Chicago, Illinois and is a political analyst and columnist for the Illinois Leader.