Whether people realize it or not, there is a great migration movement sweeping the country. People and businesses are leaving high taxation, high government regulation and high crime states and cities for safer cities and states with higher quality of life attributes.
This migration of residents and businesses out of cities and states results in a reduction in the tax base which reduces government revenue which results in lower government service quality and higher tax rates which causes more residents and businesses to leave and the financial death spiral is in place. Where the death spiral ends is yet to be determined but it will not be pretty.
1)We have often talked about the failure of the Chicago political class to protect the lives and property of the results of that city. Chicago has no clue how to reduce crime and violence. Chicago violence, crime, and homicide rates continue to climb to ever higher rates and the local politicians seem to have no solution on how to fix the problem.
As a result, residents of the city, and the rest of Illinois, continue to flee the city for safer and less taxing areas. Boeing recently moved their Chicago headquarters to Washington D.C. Caterpillar recently announced it will be moving its headquarters to Texas. A major investment company, Citadel, recently announced it is moving its operations to Miami since the owner of the investment firm says he no longer wants to expose his employees to the violence of Chicago.
And the out migration continues:
The owner of 13 Chicago businesses has decided that he no longer wanted to expose his employees to the violence of Chicago.
Gary Rabine is the owner of the businesses and finally gave up on the city to protect the safety of his employees.
Specifically: “We would do thousands of jobs a year in the city, but as we got robbed more, my people operating rollers and pavers we got robbed, our equipment would get stolen in broad daylight and there would usually be a gun involved, and it got expensive and it got dangerous.”
The violence and crime against his employees and property has caused his operating costs to more than double for additional security and insurance expenses.
More from Mr. Rabine: “What happened eventually is we said enough is enough. We stopped doing work down there, we stopped doing work for the gas company, the electric company, the south side, the west side, and eventually all over Chicago. Those companies now work in other places. They work over the border in Wisconsin, the outer suburbs of Chicago, where they feel safer. If you want a great culture in your company, you have to have people that love being on the team and they don’t want to live in a violent area. They don’t want to live in a place where their kids can’t walk to school safely and their wives and kids can’t go shopping in a beautiful environment like Michigan Avenue, which was once the safest place you could ever go shopping.”
We have often claimed that a very, very basic function of any government entity is to protect the lives and property of its residents and businesses. Failure on this function renders anything else a government entity does moot and insignificant. Which means that Chicago politicians continue to be a failure and insignificant.
2)Regarding the withdrawal of the Citadel investment business out of the city referenced above:
Hedge fund billionaire, Ken Griffin, recently announced that he was relocating his investment firm to Miami to get away from the violence of Chicago.
Griffin is worth $29 billion and has been a long term charity donor having donated hundreds of millions of dollars over the years to causes in Chicago and the state of Illinois, donations that are now in danger.
Griffin has previously referenced the high rate of violent crime in Chicago: “If people aren’t safe here, they’re not going to live here,” he said of the state of affairs. I’ve had multiple colleagues mugged at gunpoint. I’ve had a colleague stabbed on the way to work. Countless issues of burglary. I mean, that’s a really difficult backdrop with which to draw talent to your city from.”
People want to be free: free from high taxes, free from over regulating government, and free to be safe in their lives and businesses. Obviously, that is not happening in the crime ridden, ineptly ruled city of Chicago and state of Illinois.
3)But Chicago is not the only place in the country where people and businesses are moving to safer, less taxing locations to improve their quality and safety of life. We have previously discussed the reality that many large and small businesses have been fleeing the high crime, high taxation state of California. These fleeing companies have included Tesla, Toyota, and Charles Schwab.
And the out migration has not stopped:
Chevron recently announced that it is moving its California headquarters to Texas, a state with low taxes and a very favorable business environment, the exact opposite of California.
It announced that it will be paying the relocation costs of some employees.
The move comes after being located in California for 140 years so it was obviously not a move taken lightly.
We have discussed this out migration from a number of states, Illinois, California, New Jersey, and New York:
https://loathemygovernment.blogspot.com/2020/11/which-city-and-which-state-will-go.html
And the latest news from Chicago and California prove that the death spiral theory is still valid and in place in Chicago and California. The race to bankruptcy should be a hoot to follow.
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