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The New Chapter Begins

What does he have that I want?  What do I have that he needs?  What can I give him that gets what I want without giving up what I want?  And how do I make it so that he still owes me afterwards?

This is politics in a nutshell.  And no one does it better than Chicago.

A lot of political insiders were wringing their hands over the election yesterday.  Bruce Rauner, a.k.a. The Sledgehammer, won a squeaker with 51% of the vote.  This spelled the end for Pat Quinn.  And Conventional Wisdom said it didn't matter, because the real power in Illinois is still there.

For those that don't know -- the state of Illinois is run by Mike Madigan.  Madigan learned from the Boss himself, Daley The First.  He was part of an inner circle along with such luminaries as 14th ward alderman Ed Burke, former president and CEO of the Chicago Board Of Trade Tom Donovan, and the legendary Fast Eddie Vrdolyak.  He's Speaker of the Illinois House and the head of the Illinois Democratic Party.  Everything goes through him -- campaign money, advertising, friendly press to leak information to, favors to call in, he is a clout in the classic sense of the word.  As a result, he is the apex predatory of the bipartisan combine that runs Illinois.  What he wants, he gets, and we citizens pay for it.  For example, he has helped stymie pension reform.  He used a lame duck session of the state leg four years ago to get a "temporary" tax increase that almost doubled what citizens pay.  He helps elect the Cook County assessor.  He doesn't go on talk shows, he doesn't do sound bites.  He works quietly and meticulously, and crushes anyone who poses a threat, earning him the nickname in political circles of "The Velvet Hammer."

As I said, Madigan usually gets what he wants.  He installed his daughter as AG in hopes of getting her into the governor's mansion some day (a plan she is so far resisting, but who knows for how long).  And people are starting to notice him plucking the strings that hold our world.  During Rauner's victory speech, he mentioned he'd already reached out to Madigan in a gesture of good will and cooperation, and the place erupted into boos.  But just like Nancy Pelosi, he knows all he has to do is keep his voters in his district happy and he's guaranteed a job.  And he needs his job.  Otherwise, he's just another rich guy.  He needs that power.

With Rauner becoming the first Republican to be governor since Jim Edgar (another politically connected insider) and Quinn becoming the first governor in 38 years to lose re-election, people are expecting a meeting of The Sledgehammer and The Velvet Hammer to go along these lines -- "What's my agenda, Mr. Madigan?"  And a lot of veteran political watchers are saying we'll see more of the same.

Will we?

I'm not so sure.

Here's an easy way to check -- the "temporary" tax increase.  Madigan was saying he wanted to make it permanent back in the spring, which would have given it enough time to die off as a campaign issue.  It never got passed, and it expires January 1.  If it does, it will create a huge hole in the state budget with nothing on deck to fill it in.  Rauner doesn't really have any actual proposals to deal with that, especially the $100 bil unfunded pension liability, and he'd would need to either think fast (the pension reform plan that was passed is still under review in the courts and could be struck down as unconstitutional, so nobody better count on that) or extend the tax hike himself.  Rauner did occasionally mention during the campaign that he might extend the tax but have it rolling, scaling back a little each year until it was gone in four, so he's aware he might have to do it.  If the tax is extended by the now lame duck leg, Madigan is looking to cooperate with Rauner since it can be blamed on the bunch checking out.  If he doesn't, he's leaving it to Rauner to deal with, and possibly set him up with enough bad press to make his daughter running for Gov in 2018 a real possibility.

Here is Madigan's problem in a nutshell -- there are now challengers to his money train.  Rahm Emmanuel, the mayor of Chicago, got in without any help from Madigan because he and Madigan hate each other.  Madigan and Rahmbo (no kidding, that was his nickname on Capitol Hill because he was so bold and confrontational) pitted Chicago machine politics against each other.  Rahmbo has two huge patronage armies representing the Jewish voting bloc and the Hispanic voting bloc, and he cruised to victory.  The biggest, most publicized office in all of Illinois is in the hands of someone who doesn't need him to stay in power.

This was the most expensive campaign in Illinois history.  With all that money flying around, that meant there was a real interest in the D's and Madigan retaining control of the governor's mansion.  The R nominee, like Judy Barr Topinka four years ago, usually has no chance.  Now, there was a wild card in Rauner.  Quinn even got Paul Vallas to be his pick for lite gov.  Vallas is well known for his political ethics.  To give someone like that a statewide soapbox means you are really really desperate.  But there was no one from Madigan's list, just Vallas.  This isn't good.

And now, we have Rauner in waiting.  This isn't like four years ago when Topinka ran for gov for the R's (she said, "I'm going to end business as usual."  And voters went, "You?").  Rauner is a venture capitalist.  This means we are dealing with an intersting breed.  Lots of people say government is like a business and a businessman should run it.  Well, a venture capitalist is not a businessman.  He is simply an investor.  All he cares about is getting the agreed-on payout when it is due, and whatever it takes to do that, from leveraging short term deals with no regard for longterm consequences to selling off valuable assets just to generate cash revenue, that's what gets done.  They aren't interested in building a company that can survive when they are gone, just a company that gets their wallet fatter.

So for a guy to pride himself on being a venture capitalist should be setting off warning bells.  But no one in Illinois is really listening.  During the campaign, there wasn't a set of proposals from Quinn and a set from Rauner that people could compare and contrast.  Rauner basically did like Fred Thompson running for the R nomination in 2008.  He kept things vague and bragged about his business accumen.  Voters tired of the old way of doing things embraced him as something different, not realizing what that would mean for them.

Rauner is trouble for Illinois citizens (you really think he's going to stop things like inversions from happening?  He's going to make it easier.  Caterpillar will probably be gone in a couple of years).  But he's even worse for Madigan.  Venture capitalists have connections.  They can bring friends to feed at the trough.  A trough that Madigan has run dry.  Businesses are leaving Illinois.  Citizens are moving away.  And Madigan only makes things worse for those that stay.  Rauner can bring in buddies to help refill the business tax revenue stream, but that means Rauner influences who comes and goes.

Not Madigan.

So Madigan either needs what's left of his supporters to start making things happen or he has to start doing favors for Rauner.  And when you've been calling the shots that long, swallowing your pride is like swallowing glass.

The first move will be Madigan.  He has about two months to decide what he's going to do about the tax increase and whether or not he's going to force his pets to make it happen or dump it on Rauner's lap.  And Rauner will need every connection he has.

This isn't about fixing Illinois.  It's about dethroning the king.

And appointing a new one.

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