Chicago Will No Longer Buy Treasury Bonds
“Chicagoans Do Not Want Us to Bankroll the Regime”
By Jonathan Turley
“It’s a bold statement, isn’t it?” Those words of Chicago City Treasurer Melissa Conyears-Ervin hardly capture the moment. Yesterday, Conyears-Ervin declared that her office would no longer invest in U.S. Treasury bonds to protest what she called the “authoritarian regime” of President Donald Trump. It is more bonkers than bold. It makes about as much sense as President Trump saying that he will not eat deep-dish pizza to protest Chicago.
My hometown of Chicago is facing an economic meltdown due to towering debt and massive spending. Mayor Ben Johnson and the unions have pushed self-destructive tax schemes and borrowing plans that would only accelerate the flight from the city and the collapse of the city’s finances.
Now, the person in charge of investing that money is declaring that politics rather than economics will guide investments.
It is the ultimate virtue signaling at the cost of others. She is given a fiduciary duty to properly maintain and protect the investments of the city, which is currently facing a rising debt crisis. She is saying that the city will not invest in what Ald. Bill Conway (34th), a former investment banker, correctly described as “by far the most liquid and secure debt instrument in the history of the world.”
Chicago has held almost a quarter of a billion dollars in Treasury bonds in the last three years due to its healthy return for citizens. To forego such investments is Kamikaze economics, destroying your own portfolio and investors as a demonstration of true faith.
The position hurts only Chicagoans. However, the loss to the citizens could still provide gains to Conyears-Ervin, who is running to replace radical Chicago congressman, Danny Davis. Her announcement is meant to tap into the rage as she declared: “Chicagoans do not want us to bankroll the regime — the authoritarian regime — of Donald Trump where he has waged a war on our city. It’s a bold statement, isn’t it? And we need it to be.”
So, a city collapsing under debt will forego investing in one of the most secure debt instruments in the world.
Let’s recap. Mayor Johnson wants to float massive bonds to avoid cutting the budget while taxing large businesses for every new person that they employ. At the same time, the city will not invest in bonds that guarantee the most secure investment of money currently in city coffers.
This is coming in a week when many are questioning the logic of the government shutdown. After losing billions and putting many families and travelers into duress, the Democrats agreed to basically the identical clean CR that was offered over a month earlier. Yet, Conyears-Ervin makes that effort seem brilliant in comparison.
It is the same logic as burning money as a way to prevent its theft.
It is not clear where the money will go. Antifa does not currently offer an investment fund option that guarantees a total political return with no capital gains. On the other hand, over $200 billion is practically hard to stuff in the mattress of Conyears-Ervin.
This could work out in the end, resulting in practically no loss due to the new investment policies. As Johnson virtually chases businesses out of the city, there will be less money to invest. Problem solved.
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(TLB) published this article from Jonathan Turley with our appreciation for this perspective
Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. Follow him on Twitter @JonathanTurley.
Header and article insert featured image (edited) credit: WP public styles / open card.
Emphasis added by (TLB)
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