Chicago’s famed ritzy shopping district known as the Magnificent Mile is a little less magnifent these days as the recession has taken told in the windy city.

According to an article in the Wall Street Journal this week vacancies in the area are at the highest level since 1992 when another Democrat was president versus 4.4% in 2007 and just 1% in 2002.  With the almost daily announcements of job losses it is a a good bet that more stores will pull back from the pricey real estate and drive the vacancy rate even higher in the months ahead.

There are currently about 450 shops that line Lake Michigan and the Chicago river, but retailing is under heavy stress as shoppers switch from luxury to lower end stores to take care of their basic needs.

Local politicians haven’t helped the situation any either by raising the sales tax in surrounding Cook County to 10.25% which is the highest in the country and privatizing public parking meters where the rates have soared to $3.50 an hour.

These moves were an attempt to close a $12 million budget deficit but the real effect has been to curb spending even more by consumers who are already wary which leads to lower overall sales tax revenue.  Call it a destimulus package.

The country is currently in the worst economic situation than most people can ever recall having lived through.  That is particularly true for local and national elected officials who are now facing steep budget deficits as a result of years of profligate spending.  Rather than make the truly necessary budget cuts, they resort to increasing taxes and fees to plug the gap.  It may look good on paper, but history has shown that the net effect is to balance the budget while killing future growth.

If the pols continue to raise taxes and fees in thename of balancing the budget the Magnifient Mile will be more like a Magnificent Mess.

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