The centerpiece of his speech was a hike in the minimum wage to $10-which will only increase unemployment in Illinois and affect teens/minorities disproportionally than any other group.
The governor also highlighted those crucial economic issues of our time; gay marriage and gun control.
A couple of years ago, I was at an Economic Club lunch and listened to two former CEO’s lay out the finances of the state of Illinois. It was horrible then, and it hasn’t gotten any better. Over time, I have watched the whole macabre play unfold.
Once I was able to speak to a person that serves on a pension board. I asked them what rate of return they are implying on the growth of their funds. Still 8%, when a 4% return on investment is realistic. There is no way in hell any pension fund is going to get an 8% rate of return on invested capital with all the restrictions on that capital. Much of it has to be invested in safe securities like T Bills-which return 2% or less. That means the 2% allocated to alternative investments need to hit a grand slam home run to keep pace. Sort of like investing in Facebook ($FB) in the first round and watching it IPO. Except FB only has a market cap of $63B, so you’d have to actually score on more than one investment like that.