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Rahm’s Runoff

eye on the news

Rahm’s Runoff

Chicago’s problems run deeper than many in the city want to acknowledge. February 26, 2015

On Tuesday, Chicago mayor Rahm Emanuel failed to win the majority he needed for reelection. He received just 45.4 percent of the vote—a far cry from the 55.2 percent he gathered in 2011. He now heads into an April runoff against Cook County commissioner Jesus “Chuy” Garcia. “Not even I, an avid follower of Chicago politics, knew who Chuy Garcia was when he announced his candidacy a few months ago,” wrote Politico’s Carol Felsenthal. National observers might wonder: How did this happen?

From the outside, Emanuel appeared to have a strong first term. Even as Chicago’s murder rate soared, national press coverage of the city and its mayor has been mostly positive. The Financial Times dubbed Emanuel Mayor America. Thomas Friedman wrote a glowing column about Emanuel’s agenda in the New York Times. The Brookings Institution hosted him in Washington for a discussion with David Brooks. Emanuel’s Chicago has regularly been cited for innovation in the use of technology and data in government.

How could someone so nationally admired find his popularity plummeting at home? Emanuel’s famously gruff personal style surely accounts for some of his fall, but a likelier explanation can be found in the challenges facing Chicago as a city and Illinois as a state. The Windy City is struggling with structural economic changes and a legacy of bad decisions that would bedevil any mayor. During the “lost decade” of the 2000s, Chicago saw more than 200,000 residents head for the exits. The Loop shed 18.6 percent of its private-sector jobs; the Chicagoland region lost more than 300,000 jobs. Debt soared. The city failed in its bid to host the 2016 Olympics, and five-term mayor Richard M. Daley’s approval rating sank to 35 percent.

The dynamic Emanuel seemed just what the flagging city needed. His dead-fish-mailing, F-bomb-dropping style seemed perfectly in tune with hardboiled Chicago sensibilities. He started fast, unleashing a blizzard of initiatives and announcements that boosted the morale of the city’s establishment. And four years on, Chicago has hit its stride in many ways. In November, Crain’s Chicago Business reported that jobs in the greater downtown area had reached an all-time high. The city has enjoyed a tourist boom, drawing over 50 million visitors last year, and several new hotels are expected to open. Chicago’s downtown tech scene has seen strong growth. Thousands of new apartments are going up in downtown every year.

Unfortunately, that’s where most of Chicago’s headline-generating success is happening—downtown and on the North Side. The rest of the city is still struggling badly. As urban analyst Daniel Hertz revealed, while the North Side of Chicago is now safer than New York, parts of the South and West Sides are more dangerous than they were in the early 1990s. Urban planner Pete Saunders found that the North Side areas he classifies as being part of “Super Global Chicago” had 63.5 percent college-degree attainment, while the parts he labels “Rust Belt Chicago” had a mere 19.4 percent. Chicago can be seen, Saunders suggests, as “one-third San Francisco, two-thirds Detroit.”

Chicago is also uniquely burdened among major American cities by its twin deficits. Both the state of Illinois and the city of Chicago are in dire financial condition. Illinois’s unfunded pension liability stands at $111 billion. It owes another $56 billion in unfunded retiree health-care obligations. Chicago itself faces $35 billion in unfunded pension liabilities. The total liability for all local government obligations adds up to as much as $83,000 per household. This flow of red ink can’t be staunched with simple “belt tightening.” One wonders if Emanuel understood the full extent of the financial hole when he sought the mayor’s office.

These extreme liabilities raise serious questions about whether Chicago, and Illinois, can find a path to solvency without tax increases so high that they drive out people and businesses. In 2011, CME Group—formed by the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade—threatened to leave Illinois unless it received special tax breaks. Sears and Medline did the same, as did downstate Caterpillar. Chicago is in a much weaker position to extract tax revenue from businesses and residents than cities like New York or San Francisco.

All cities are boosterish, but Chicago stands apart as a place where tough analysis can’t get a hearing. It’s a one-party town, and anyone who challenges the party line risks excommunication. Chicagoans don’t understand the city’s position because no one has explained it to them. Bathed in a nonstop stream of civic pronouncements about their amazingly awesome global city, many residents think Chicago is just like London, New York, and San Francisco. Taxes are high in those places, they think, so why shouldn’t they be high in Chicago, too?

It’s tempting to pin the blame for Emanuel’s travails on hubris, and he has committed his share of unforced errors. He manages the local media with Washington-style spin control. He’s also shown a lack of regard for the optics of leadership. Daley projected a South Side “neighborhood guy” persona even while cozying up to the Loop business class. By contrast, Emanuel seems unconcerned about coming across as an elitist. His schedule is full of meetings with wealthy donors. Over half of his top donors benefit in some way from city largesse. Emanuel proposed a fancy selective-admission school named after President Obama on the white and wealthy North Side while closing 50 public schools in the city’s lower-income neighborhoods.

But a substantial portion of Emanuel’s difficulties can be attributed to the nature of the city’s politics—the legendary, unforgiving, and often corrupt Chicago Style. Though viewed as an establishment figure, Emanuel is actually a Democratic reformer. He supports Broken Windows policing. He supports charter schools and has pushed for a longer school day. He’s tried to negotiate pension reform with unions. He’s made legitimate spending cuts. There’s much more to do, but Emanuel has made progress on several fronts. Yet the public doesn’t seem interested in facing up to Chicago’s woes, much less grappling with the legacy of the past.

In the April runoff, Garcia will do well in Latino areas, but unless he makes inroads in the city’s black sections, where Emanuel captured a first-round plurality, he won’t win. And even if Garcia does prevail, it won’t change Chicago’s fundamental financial, economic, and social reality. The debt isn’t going away. Whoever the mayor is, he’ll be wise to take strong action sooner rather than later.

“Chicago ain’t ready for reform,” Alderman Paddy Bauler quipped in 1955. But someday, reform will be ready for Chicago.

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