Chicago’s malign government is attacking its tax base from both ends — driving away taxpayers and job creators while tolerating the disorder that drives everyone else away
It is always sad to watch a great city die. History is littered with the corpses of cities and civilizations that once seemed indestructible. Rome did not disappear in an afternoon. Great places usually decline gradually, then suddenly, as bad decisions compound until what once seemed impossible becomes inevitable. That is what should worry us about Chicago, the city I have lived in and loved for most of my life. We are watching political leaders pursue policies that seem almost designed to undermine the economic and social foundations on which the city depends.
The people in charge include the notorious MBJ, Mayor Brandon Johnson; Cook County Board President Toni Preckwinkle; Governor J.B. Pritzker; and an assortment of other progressive politicians who have dominated government in Chicago and Illinois. Whatever their intentions, the results deserve examination. And the formula for decline is not terribly complicated. You can destroy a city in two easy steps: drive away the people at the top who provide an extraordinary share of its capital, investment, employment, taxes, and philanthropy, and simultaneously make life sufficiently unpleasant at street level that ordinary people and businesses begin wondering why they should stay.
Ken Griffin may be the most spectacular example of the first step. Griffin founded Citadel in Chicago in 1990 and built it into one of the world’s great financial enterprises. He also became one of Chicago’s most important taxpayers and philanthropists. Then, in 2022, Griffin announced that Citadel was moving its headquarters to Miami. Griffin had been increasingly outspoken about crime and government in Chicago and had engaged in a very public political feud with Pritzker.
There were undoubtedly numerous considerations behind his decision, and nobody outside Griffin’s inner circle can assign a precise percentage of responsibility to each one. Nevertheless, the important point is what happened afterward. Griffin didn’t merely move his mailing address. Capital followed him. Talent followed him. Citadel followed him. And increasingly, his philanthropy followed him. His latest announcement makes the magnitude of Chicago’s loss impossible to ignore: Griffin has pledged $3 billion to Carnegie Mellon University, the largest individual gift to higher education in American history, with $2 billion going toward the creation of a major new Carnegie Mellon campus in Miami. Plans call for that campus to eventually educate roughly 3,500 to 4,000 students and employ about 300 faculty and 600 staff. Think about that for a moment. Chicago didn’t merely lose a billionaire. Chicago lost a taxpayer, an employer, an investor, and a philanthropist, and now we get to watch him use those four roles to help build one of our competitor cities.
The irony has become so obvious that even the editorial board of the Chicago Tribune has noticed it. In an October 2nd editorial headlined, “New Northwestern president has big plans for Chicago. If only he had Ken Griffin,” the Tribune contemplated what might have happened had Griffin remained here. The occasion was Northwestern University’s new president, Mung Chiang, talking ambitiously about the university’s role in Chicago just as Griffin was announcing his astonishing investment in Carnegie Mellon and Miami. The Tribune acknowledged that Griffin became sufficiently frustrated with Illinois to move himself and much of Citadel to Florida.
That is an extraordinary admission because it gets to the heart of the matter. You don’t have to like Griffin’s politics. You don’t have to like billionaires. You don’t even have to like capitalism very much. However, arithmetic remains arithmetic. When someone is paying enormous amounts of taxes, employing highly compensated people, financing businesses, and donating hundreds of millions to your civic institutions, chasing them out of town may provide a wonderful emotional sugar high for politicians practicing the politics of envy. The problem comes the morning after, when you discover that the billionaire left — and his billions went with him.
The Wall Street Journal picked up on precisely this point in James Freeman’s October 3rd column, “When Blue States Chase Away Their Billionaires,” prompted by the Tribune editorial. The larger lesson goes well beyond Griffin. Progressive politicians increasingly talk as though rich people and successful businesses were stationary objects from which government can extract unlimited revenue. They aren’t. Capital is mobile. Businesses are mobile. Increasingly, highly compensated professionals are mobile. A billionaire can live anywhere he wants, and businesses that employ knowledge workers have more geographic flexibility than they did a generation ago.
Florida has no individual state income tax. Illinois does. Chicago has enormous pension obligations, persistent fiscal problems, and an endless appetite for additional revenue. None of this means government should kneel before every rich person who threatens to leave. It does mean that politicians should understand the difference between taxing wealth and driving wealth away. A city cannot redistribute money from those who no longer live here.
But Chicago is not content to attack its tax base from the top. That would apparently be too easy. We are attacking it from underneath as well. Walk along enough commercial streets and talk to enough merchants and residents and you hear variations of the same complaint: Disorder has become normalized. Homelessness, untreated mental illness, shoplifting, aggressive panhandling, public intoxication, and other forms of anti-social behavior are treated primarily as manifestations of social injustice rather than as problems that also impose very real costs on everyone else. This is where one of the most dangerous concepts in progressive government enters the picture: Adverse impact. Every attempt to enforce a rule is evaluated through the prism of who might be disproportionately affected by enforcement. Eventually the rule itself becomes suspect. Police become reluctant to arrest. Prosecutors become reluctant to prosecute. Judges face pressure to release. Institutions become afraid to institutionalize. Businesses are expected to tolerate conduct that would never be tolerated in the homes or offices of the people designing these policies. Compassion for the offender gradually overwhelms compassion for the victim.
The consequences occasionally erupt into horrors so grotesque that they penetrate even Chicago’s remarkable capacity for denial. Consider Bethany MaGee, the 26-year-old woman prosecutors say was doused with gasoline and set on fire while riding a CTA Blue Line train last November. The man charged in the attack, Lawrence Reed, was not someone the system had never encountered. Prosecutors said Reed had been arrested 72 times over 32 years. Court records documented a history of mental illness, and his attorney said he had suffered from schizophrenia and depression for 26 years. At the time of the alleged Blue Line attack, Reed had been released on electronic monitoring in another aggravated-battery case. He has pleaded not guilty to the federal charge, and his competency to stand trial has been under examination. Even Mayor Brandon Johnson responded to the episode by calling it “an absolute failure of our criminal justice and mental health institutions.” On that narrow point, the notorious MBJ is correct. The question is what government intends to do about it.
Now Chicago has another almost incomprehensible tragedy. On Saturday, a seven-year-old girl, Edimari Hernandez Chacon, was walking along South Cottage Grove Avenue in Chatham when police say an adult woman approached her and repeatedly stabbed her in the back. Bystanders intervened and detained the woman until police arrived. The child was taken to Comer Children’s Hospital, where she died. As of this writing, police have not publicly established a motive or said whether the woman accused of the killing suffered from mental illness, so we will not pretend to know facts investigators have not yet established. What we do know is horrifying enough: A seven-year-old child was walking down a Chicago street and was allegedly attacked by an adult stranger and stabbed repeatedly in the back.
The alleged perpetrator is clearly a danger to herself and others who should not have been at-large at the time the incident occurred. Based on what we know as of this writing: Media reports and court records have revealed this is not the suspect's first time attacking someone in Chicago. In 2023, she was arrested for threatening and physically attacking a Chicago Transit Authority (CTA) employee. Court records show she later pleaded guilty to that charge. While Chicago Police have not yet released her name due to pending formal charges, investigators have identified the woman in custody as a 48-year-old female. Police sources and witnesses state the attack appears to have been entirely random, as the suspect and seven-year-old Edimari did not know each other. The suspect remains hospitalized under police custody due to injuries sustained when the bystanders subdued and detained her.
These spectacular crimes receive headlines, but the slower destruction of a city occurs one storefront, one family, and one decision at a time. A restaurant closes. A retailer decides not to renew its lease. A family decides it would rather raise its children somewhere else. A retiree looks at the property-tax bill and starts browsing houses in Indiana, Wisconsin, or Florida. A corporation deciding where to put its next thousand employees compares Chicago with Dallas, Nashville, or Miami. An entrepreneur who might once automatically have opened his second location here starts wondering whether the hassle is worth it. None of these decisions destroys Chicago individually. Collectively, they can. The empty storefront isn’t merely ugly. It no longer generates the same sales taxes, property taxes, jobs, or foot traffic. Falling commercial values shift tax burdens elsewhere. Higher taxes encourage another resident or business to leave. Government then raises taxes or fees on whoever remains. More leave. That is the death spiral.
This is also why the old sneer about people worrying about “property values” deserves reconsideration. Property values aren’t merely a concern of wealthy homeowners guarding their estates. Property is a fundamental component of the municipal tax base. When neighborhoods become less desirable, when commercial corridors empty out and when businesses decide not to invest, government eventually loses revenue. The irony is exquisite: The same politicians who promise an ever-expanding collection of public programs need a thriving private economy to pay for them. Chicago Public Schools, CTA, police, firefighters, pensions, mental-health services, affordable housing, and every other worthy or unworthy item in the municipal budget ultimately depend on economic activity. Government doesn’t create the money it redistributes. Somebody must earn it first.
That brings us to the political alliance at the center of Chicago government. Mayor Johnson came out of the Chicago Teachers Union movement, and CTU remains one of the most powerful political organizations in the city. Stacy Davis Gates and the union naturally advocate aggressively for their members; that is what unions do. The problem arises when the political system becomes so dependent on organized public-sector interests that the people paying for government become an afterthought. Chicago cannot solve its fiscal problems simply by demanding more from an ever-shrinking pool of taxpayers. Nor can Illinois solve its problems by assuming wealthy residents have nowhere else to go. Ken Griffin has provided a rather expensive demonstration of that principle. He went somewhere else. And now Miami, not Chicago, will receive much of the economic ecosystem surrounding his $2 billion investment in Carnegie Mellon’s new campus.
None of this means Chicago should become a playground exclusively for millionaires and billionaires, nor does it mean homelessness and mental illness should be dealt with by simply throwing everyone in jail. Those are false choices. A humane city should help people who cannot help themselves. Some severely mentally ill people need treatment, including involuntary treatment when the legal standard is met and they present a danger to themselves or others. People who commit serious crimes belong in the criminal-justice system. People who are homeless because of economic catastrophe deserve assistance. Compassion, however, does not require surrendering sidewalks, trains, parks, and commercial districts to disorder. The rights of the troubled person do not erase the rights of the shopkeeper, commuter, homeowner, child, or elderly woman walking down the street. Civilization consists largely of establishing boundaries between individual freedom and conduct that harms everyone else.
And that is ultimately what is at stake. Chicago remains one of the greatest cities ever built. We have an extraordinary location, architecture, transportation network, universities, hospitals, cultural institutions, financial markets, neighborhoods, and a metropolitan economy that generations before us constructed at enormous cost. Cities with those advantages do not disappear overnight. That can create a dangerous complacency. Politicians assume the tax base will always be there because it always has been. They assume businesses will stay because Chicago is Chicago. They assume families will tolerate another tax increase, another empty storefront, another frightening ride on the CTA, another incident of street disorder, another year of dysfunctional government. Until they don’t.
That’s how you destroy a city in two easy steps. First, drive away the people at the top who provide disproportionate amounts of capital, taxes, investment, and philanthropy. Then make conditions unpleasant enough at the bottom that everyone else starts thinking about leaving too. Eventually the two forces meet in the middle.
Thus, there is much cause for concern, but also encouraging words to be heard.
First, it is very encouraging and most welcome that somebody at the Chicago Tribune finally seems to have noticed we have big trouble in this town. When even the Tribune editorial board looks at Ken Griffin’s billions flowing into Miami and wonders what Chicago lost, perhaps it has been mugged by reality. The question is whether Chicago’s political establishment will learn the same lesson before there are too few taxpayers left to pay the bill.
Second, the voters have opportunities to fix what's broken in this city before it breaks the city financially and from a public safety point of view.
That starts on November 3 with the important school board election that can kill the monster that is financially eating the city — the Chicago Public Schools driven by the Chicago Teachers Union. It continues with the February Mayoral primary.
These are our opportunities to stop the madness by making sure we get the right people running the city, replacing the incumbents who are ruining it. Once we get the right leadership, things will take care of themselves. If we let the wrong people stay in charge, they'll destroy everything worth saving about this city.
So as usual, it’s up to we the people, and it’s our job as Contrarions to evangelize the message that this city is more than ready for real reform.
