Chicago Economic & Finance News

[Standpoor]

Originally Posted by Nowhereman1280

^^^ Its really simple in my mind:

- Manufacturing is going to come back to the USA and already is (2.5 years consecutive growth)

Exactly, the death of American manufacturing is greatly exaggerated. People talk about manufacturing in America and mean low skilled manufacturing, like clothing. Why do I need clothing manufactured in the US. Low skill, low pay, low margin=no thank you. If you read the New York times article, they spend an awful lot of time talking about Foxconn but America cannot be like Foxconn. They also talk about flat panel manufacturing in South Korea and state that the clusters in South Korea make it efficient for new manufacturers to locate there. Building these connections is how economic development happens and what we should focus on. Not silly political diatribes.

Originally Posted by Nowhereman1280

- Chicago is uniquely situated not just in the USA, but in the world as a manufacturing center.

- Eventually the dam will break and industry will pour back in the USA and will go to the most logical and efficient location.

- That location is Chicago due to its railroad dominance, strong existing manufacturing base, and central location.

Here is where I see a problem. The above statement is true, industry will increase in the USA and will go to the most logical and efficient location. The question is: Is Chicago that location. Chicago is located for trade with the Northeast, Canada and Europe-(through the Northeast). Raw materials would flow from the great lakes and river centers to Chicago, manufactured to finished goods and then shipped to the Norhteast. Southeast and west coast areas were afterthoughts.

Once these partners lost focus in favor of Gulf shipping and Asian economies, Midwest markets were not fast enough to respond which meant they lost critical advantages leading to the eventual collapse of Detroit's dominance and a decline in Chicago's manufacturing. The current BMW commercial that seems to imply that South Carolina is a bizarre place to put a plant is stupid to me. Even without right to work, which for the most part I find to be a political red herring, South Carolina makes perfect sense. Easy access to Northeast and Southeast markets, while at the same time tapping in to BMW's global supply chain through an Atlantic seaport seems like the logical place to put a plant. The question is not why did BMW choose South Carolina but why would it choose anyplace else.

To combat these new advantages of South and West markets, what is necessary is to make sure that Chicago does not develop disadvantages in trade again. To do this, we need to build greater access to markets and supply chains. We should not be afraid of great access to Mexico or Asian ports because this will give manufacturers access to greater markets. Also, the problem with Chicago's railroad infrastructure is it has always been centered on the east. It is a disadvantage to have so many rail routes to Detroit. Increasing rail routes to West and South locations is necessary. Furthermore the past 10 years of decreasing access to Canada is a significant detriment to manufacturing in the Great Lakes and it is necessary to open the border. Trade with Canada is a major selling point for the Great Lakes but long border crossing and security minimize this advantage.

I could go on about how rapid industrialization of West Africa could help Great Lakes trade or increasing technology infrastructure could help create competitive advantages and so forth but I am way off topic. Feel free to delete, if it is too far off.

[lawfin]

Yeah, pretty much anyone who claims that manufacturing / industrial production etc in the US has declined essentially either does not know what they are talking about; or they are confusing output with employment. It is true that employement in these fields has plummeted.

Chicago's future in manufacturing should not be in low margin work but in high value added taking advantage of its transportation assets

[Nowhereman1280]

Originally Posted by Standpoor

Here is where I see a problem. The above statement is true, industry will increase in the USA and will go to the most logical and efficient location. The question is: Is Chicago that location. Chicago is located for trade with the Northeast, Canada and Europe-(through the Northeast). Raw materials would flow from the great lakes and river centers to Chicago, manufactured to finished goods and then shipped to the Norhteast. Southeast and west coast areas were afterthoughts.

Once these partners lost focus in favor of Gulf shipping and Asian economies, Midwest markets were not fast enough to respond which meant they lost critical advantages leading to the eventual collapse of Detroit's dominance and a decline in Chicago's manufacturing. The current BMW commercial that seems to imply that South Carolina is a bizarre place to put a plant is stupid to me. Even without right to work, which for the most part I find to be a political red herring, South Carolina makes perfect sense. Easy access to Northeast and Southeast markets, while at the same time tapping in to BMW's global supply chain through an Atlantic seaport seems like the logical place to put a plant. The question is not why did BMW choose South Carolina but why would it choose anyplace else.

To combat these new advantages of South and West markets, what is necessary is to make sure that Chicago does not develop disadvantages in trade again. To do this, we need to build greater access to markets and supply chains. We should not be afraid of great access to Mexico or Asian ports because this will give manufacturers access to greater markets. Also, the problem with Chicago's railroad infrastructure is it has always been centered on the east. It is a disadvantage to have so many rail routes to Detroit. Increasing rail routes to West and South locations is necessary. Furthermore the past 10 years of decreasing access to Canada is a significant detriment to manufacturing in the Great Lakes and it is necessary to open the border. Trade with Canada is a major selling point for the Great Lakes but long border crossing and security minimize this advantage.

I could go on about how rapid industrialization of West Africa could help Great Lakes trade or increasing technology infrastructure could help create competitive advantages and so forth but I am way off topic. Feel free to delete, if it is too far off.

That's the thing though, we are going to see a major shift in the near future from an import emphasis to a domestic emphasis in the USA as wages in foreign countries start to equalize. That means Chicago's factories will roar again to satisfy the demands of the nation. Rather than goods moving inland from the coasts, they will flow from the center outwards (it's cheaper that way when other costs are equalized).

The other advantage will be the gradual rebirth of American heavy manufacturing. As China and other countries are forced to clean up their act environmentally it will again become cheaper to smelt steel and other heavy metals in the United States. Chicago will probably become the center of this industry again considering it still likes just a short float away from some of the largest, highest quality, deposits of copper and iron in the world which have largely laid dormant for the past couple decades as we've cracked down on environmental regulations. Once China realizes they can't rape and pillage their environment without incurring massive negative externalities the cost of such industries there will soar and the Chicago will again be an ideal location for the production of such raw materials. This direct access to raw materials will only compound the effects of any industrial revival.

There really isn't any place on earth that has better access to copper, iron, coal, and fresh water all in one place than the great lakes region. That is really why this area became the hotbed of world industry until rising environmental and labor costs (along with the gutting of our cities) caused the industries to collapse.

[the urban politician]

So let me get this right. Chicago's strategy for the future should be to sit around and wait for the industrial revolution to come back? Isn't that exactly the kind of backwards looking strategy Chicago should not have?

[BorisMolotov]

Fine, but what about other sectors of the economy?

Well if our winters stay this mild, I think we could expect tourism to increase

I do think one area that hasn't been talked about that Chicago could and arguably does already compete in is Green Energy. Chicago already has the most LEED-certified buildings in the world (but will soon lose to China due to some master-planned LEED cities) and is in a unique position to upgrade infrastructure, transportation, and buildings with green technology. Like I mentioned earlier, clean coal and abundant natural gas reserves in Illinois along with burgeoning wind and solar industries could make Chicago into a central hub for these industries. If Chicago is in a position to become number 1 in the country for anything, it would be a green economy.

[the urban politician]

Quinn offers details on pension, Medicaid cost cutting

[untitledreality]

Originally Posted by Nowhereman1280

There really isn't any place on earth that has better access to... fresh water... than the great lakes region.

This has got to be the cornerstone for Chicago's economic future. The great lakes as a whole must devise a way to maximize the utilization of this resource while minimizing the environmental impact. Placing regulations that demand zero sum usage, with filtered and calmed effluent but provide incredible access to our water could spark a boom of environmentally conscious industry in the region.

Imagine the Calumet River corridor from South Works to Torrence Ave being flooded with water dependent manufacturing and what that would mean to that portion of the city... it could be phenomenal

[Baronvonellis]

I have this idea where Chicago could be known as a mecca for fine cuisine. Food and cooking are really big in popular culture now. Such as the food network and travel channel shows. We should have a big annual event that is known as a gathering place for the best restaurants and chefs in the world. Perhaps create 50-100 outdoor cafes along the riverfront for 2 weeks that would showcase the food scene. Broadcast it as an annual food pilgrimage on the food network.

Of course we already have the Taste of Chicago but that is more family oriented and normal foods. This would be really classy and high end, so that people envied our cuisine and would want to move here. Chicago could be known for the best cuisine in the world. Why not? There is already a huge foodie culture here. There are many cool things here like underground dinner clubs. Next restaurant. There are so many cutting edge and innovative restaurants.

Chicago needs to be known for something.
LA has hollywood
Miami has fashion/beaches
New York is the best of the best
Chicago has the best cuisine

[ChiMIchael]

^ We have the Taste of Chicago and that can be better used to leverage our reputation as a food capital, but locals get out of there way to hate it with a passion and the city is shrinking it's presence.

[lawfin]

Originally Posted by the urban politician

^ And how does Chicago compare to other tech centers in its growth in VC funding?

1871 is a step in the right direction, but it is not bold.

Chicago needs to experience what NYC experienced in the 1950's-1960's--it needs a complete reboot of its "software" as the Urbanophile would put it. Right now Chicago seems to be "going with the flow"--deindustrializing and moving towards the 21st century economy because that is what is has to do. How about stepping in front of the line and being a trailblazer? How about creating the future instead of following other cities into it? I'm not necessarily saying that Chicago can do so economically. But what Chicago can do is create its own vision for the future, culturally, and sell it to the world.

We didn't get the Olympics, but that is because the IOC didn't choose us. So why not put on a show of our own? A global show put on by the city that brings in future ideas on culture, fashion, and art. Tell the world that cutting-edge ideas are possible here. How about a daytime version of 'Looptopia' on steroids, with a global audience, and with the best of the best on display from artists and designers both local and around the world.

San Francisco was a hipster mecca long before it was a tech mecca. For once and for all, Chicago needs to shake off its hog-butcher, steel-manufacturing reputation to the world.

from the wsj from first half of last year

http://blogs.wsj.com/venturecapital/...b/interactive/

[Ch.G, Ch.G]

Originally Posted by the urban politician

Quinn offers details on pension, Medicaid cost cutting

Maybe it's a start, but it doesn't sound nearly ambitious enough.

[lawfin]

The loss of the world's largest supercollider was more damaging to Chicago's position in terms of R&D than perhaps any other recent single event. I think re-thinking this and perhaps utilizing the infrastrucure present out in Batavia to re-establish Fermi as the preeminent super collider in the world would be a nice step towards maintain highe end R&D relevance

[Nowhereman1280]

^^^ I'm hoping Obama will push for some major investments in science and technology after he is reelected and can stop giving a shit about reelection. Hopefully this will include fat slices of R+D pork for Chicago and Illinois. (Hypocritical I know, but promoting science/education is one of the few things I think the government should be doing).

Originally Posted by the urban politician

So let me get this right. Chicago's strategy for the future should be to sit around and wait for the industrial revolution to come back? Isn't that exactly the kind of backwards looking strategy Chicago should not have?

No, Chicago should be planning for the future industrial renaissance and positioning itself to dominate the impending boom by upgrading its existing infrastructure, preparing swaths of the city for R+D and high tech industrial redevelopment, preparing the port area for new heavy industries, revamping the industrial belts the circle the outer neighborhoods, etc.


I also think the single greatest benefit to Chicago could be achieved by a comprehensive reworking of the city zoning and building codes. They really need sweeping upzonings of the city along major transit lines and on the south side where there are swaths of vacant land near transit. Then there's the building code which is just a complete mess of overbearing rules and regulations. They need to scrap the whole thing (which is one of the oldest codes in the world with some regulations still remaining from the Great Fire) and simplify it and remove all the stupid "this much of the basement needs to be above ground level for it to be habitable" type rules. I think we'd see an increase in not only redevelopment, but the quality of redevelopment this way. The current code does very little to stop people from sneaking around and hiding the fact they are renovating buildings which encourages people to do shoddy work. If the process were simpler and less onerous more people would do it legally and more of the renovations in the city would be inspected ensuring there are no grievously dangerous violations. Rahm has shown that he wants to make strides in this direction by moving permitting online and the likes, but he needs to take it one step further to complete reform. This is the 21st century, we don't need to be cowering in fear of another Chicago Fire anymore.

[brian_b]

Originally Posted by lawfin

The loss of the world's largest supercollider was more damaging to Chicago's position in terms of R&D than perhaps any other recent single event. I think re-thinking this and perhaps utilizing the infrastrucure present out in Batavia to re-establish Fermi as the preeminent super collider in the world would be a nice step towards maintain highe end R&D relevance

The Tevatron shutdown permanently closed only one of the nine accelerators at Fermi lab. Three of the accelerators are being reconfigured for what they think is higher-value research - instead of focusing on maximum particle beam speed they are going for maximum number of muon and other neutrino particles. This will allow observations that have never before been possible.

The NOvA detector is under construction and passed some important tests two months ago.
http://www-nova.fnal.gov/index.html

Furthermore, "Project X" is being planned and would make the LHC look like a toy:
http://projectx.fnal.gov/

Fermi isn't in danger.

[lawfin]

brian I didn't mean to suggest it was in danger in absolute terms; I had just read what you spoke of before I wrote my post and was actually impressed by what is continuing there. I was thinking in relative terms vis-a-vis CERN. Also I had in mind the particle accelerator project that was I believe planned for the US and Fermi was one of the finalist but the proposal went to TX during Pres GW Bush's term (Can't recall the name now). I believe ultimately the overall project was scrapped but cannot remember right now

But you seem to be more up to date on the goings on there than me. I always found Fermi super cool and recall my dad bringing there when I was a kid back in the 80's and batavia was still a lot of farmland

[lawfin]

Originally Posted by Nowhereman1280

^^^ I'm hoping Obama will push for some major investments in science and technology after he is reelected and can stop giving a shit about reelection. Hopefully this will include fat slices of R+D pork for Chicago and Illinois. (Hypocritical I know, but promoting science/education is one of the few things I think the government should be doing).

He of course will be accused of seeking money for a 2million dollar overhead projector as in the Adler Planetarium fiasco with Mr. "My Friends" McCain

[Haworthia]

Originally Posted by brian_b

The Tevatron shutdown permanently closed only one of the nine accelerators at Fermi lab. Three of the accelerators are being reconfigured for what they think is higher-value research - instead of focusing on maximum particle beam speed they are going for maximum number of muon and other neutrino particles. This will allow observations that have never before been possible.

The NOvA detector is under construction and passed some important tests two months ago.
http://www-nova.fnal.gov/index.html

Furthermore, "Project X" is being planned and would make the LHC look like a toy:
http://projectx.fnal.gov/

Fermi isn't in danger.

I think you are overbilling Project X in comparing it to the LHC, but it definitely would give Fermilab a future. If it is built, Fermilab will be positioned to have one of the best neutrino physics programs in the world for a decade or so.

Accelerator R&D work is alive and well. They are currently constructing a new test facility for RF cavities, the component of accelerators that actually gives a kick to particles. That facility and the NoVA experiment received a lot of stimulus funding. That arguably saved the lab so in some respects, Obama has already helped the lab out quite a bit.

The place is definitely an asset to Chicago. R&D work aside, I know a lot of physicists that have moved downtown to work in quantitative analysis and software development. It is a very valuable reservoir of talent.

I am more pessimistic of the lab's future. I worry that the current spirit of austerity will scuttle any chance for any new big projects. I think the possibility of Fermilab landing something really big like the project that moved to Texas and died (the Superconducting Super Collider (SSC)) is remote. I think it would be too difficult to engineer around the existing suburbs. Any next generation project other than Project X will have to tunnel underneath homes, schools, highways, etc. I think the possibility of litigation makes that unworkable.

Now if Fermilab cannot land Project X, they will be in danger and will have to accept a reduced scope. That would be a loss for Chicago.

[the urban politician]

Citibank makes Chicago its new regional hub
By Steve Daniels February 13, 2012

In a renewed push to get on the banking map in the nation's third-largest city, Citibank N.A. is moving its central region headquarters to Chicago from Dallas with plans to build a “flagship” branch somewhere in the city while beefing up its retail presence.

[jcchii]

^good news

[OrdoSeclorum]

I guess I'll just leave this here: BusinessInsider

Kind of interesting and impressive that maybe along with Seattle, Chicago is really the only other built-out, old-core city on the list. Lots of economic activity compared to our relatively cheap housing prices are probably why we are on this list on not NYC, SF, Boston or LA, I would wager.

I'm sure there are a lot of people moving out of Chicago too, but I'm of the opinion that churn is good. New people moving in brings ideas; old people moving out creates networks to Chicago from other places.