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Illinois Treasurer Alexi Giannoulias must think he's coated in Teflon if he believes the shot federal banking regulators took in closing his family's bank won't make a difference in his U.S. Senate race. And, what must state Democrats be thinking now that more of the party's dirty laundry is out in the open? Where's Scott Lee Cohen when you need him?

In a statement, the game Democrat and buddy of President Obama said over the weekend his campaign "goes forward with a renewed determination to turn Illinois' economy around and to fix what's broken in Washington, D.C." Uh-huh. At least Lexi won't have to do anymore explaining about the odd loans that were generated at Chicago's Broadway Bank, some of them on his watch before he was elected state treasurer. The bank, where Giannoulias was a senior loan officer, lost $75 million last year and the feds said his family had to raise at least $85 million to keep afloat.

But this is one candidate who can't say he wants to bring business practices to government. Let's see, the state is on the verge of bankruptcy and the business of the candidate at the top of the ticket just went belly up. What else can go wrong? How about Rod Blagojevich wanting the president to testify at his trial?

Only in Illinois.

Illinois Gov. Pat Quinn has cobbled together a plan to put a dent in the $13 billion budget deficit this Third World state is facing. He wants to jack the income tax 1 percent and borrow lots of money. Is the International Monetary Fund available for a home equity loan?

The IMF may be the banker of last resort for Gov. Moneybags because Illinois has the lowest bond rating of every state in the union save for California. Mississippi has a better bond rating than Illinois. Uzbekistan may have a better bond rating than Illinois. What does that say about the stewardship of the Quinn, Blagojevich and Madigan triumvirate and their co-dependent Republicans these last few years? The Hound will tell you what it means: We're in a world of financial hurt, fellas.

Of course, the Democratic answer is raise taxes. The Hound wouldn't mind a tax increase if lawmakers and the governor would rein in their spending, something they haven't been able to do for years. This being an election year and with an electorate in a totally foul mood, which Lake County lawmakers will be brave enough to vote to raise taxes? There will be a few, but not in districts where there is competition.

As The Hound noted, getting a tax hike passed in the Legislature may be the easy part. Finding bankers to fund this financial sty called Illinois may be the tough part for Quinn the Waffler. If your household was this bad off, no bank would float you a loan. The first thing a bank would do to you would put you on a short-spending leash.
Lawmakers don't take kindly to any type of leash.

The Hound says we declare bankruptcy, change the state's name to Linconia, secede from the U.S. and apply for membership in the United Nations. That way IMF help is guaranteed.

While human service professionals gear up to protect their jobs in the realm of the tentative Illinois budget, businesses aren't taking plans to increase taxes lying down. Take the American Beverage Institute which is lobbying to stop the increase in liquor taxes in order to stem the tide of red ink overtaking state government.

The Legislature has decided to add nearly three cents in additional taxes to the price of a six-pack of beer, 13 cents on a of bottle wine and 80 cents on a fifth of the hard stuff. The liquor tax hike, lobbyists say, would put a strain on distillers and sellers, while putting an additional 4,500 people on the state's unemployment rolls. That's on top of the nearly 20,000 jobs the hospitality industry says it's lost because of the recession.

Let's see, tax booze or tax constituents. If you were a lawmaker, how would you vote? Duh! Especially since the tax hike is estimated to generate nearly $115 million annually.

But here's the argument the liquor industry is really hammering as the still tax awaits Gov. Pat Quinn's signature: Raising the price of a drink hurts low-income taxpayers the hardest. They say one-third of the booze in the state is consumed by Illinoisans with incomes under $50,000 a year. Guess the rich are different than you and The Hound, after all.

There's only one answer to creeping alcohol taxes: The advent of backyard stills and the proliferation of moonshine sales across Illinois. Pass the corn licker, Snuffy!

This is really rich. After eight years of Democratic rule in Illinois which has taken the state to the brink of bankruptcy, now Gov. Pat Quinn wants to hike the income tax rate 50 percent.

The Hound believes George Harrison had it right in "Taxman": "Should 5 percent appear too small/Be thankful I don't take it all." Yikes, in the midst of the Great Recession, the governor wants to increase taxes. Only in Illinois.

Who was minding the store all these years lawmakers were writing a blank check for former Gov. Rod Blagojevich, D-Not Indicted Yet, and all the government agencies with their hands out? And, didn't Blago call this one when he got impeached. He said once he was out of the way, Quinn and lawmakers would be raising taxes. What a seer.

Quinn's proposal floated Friday and to be offered to the Legislature on Wednesday calls for the income tax on individual wage earners rising from 3 percent to 4.5 percent; on business from 4.8 percent to 7.2 percent. If that jump in the corporate rate isn't a job killer, The Hound doesn't know what is.

Hello, Wisconsin, The Hound can hear Lake County business leaders saying. Especially considering Lake County's jobless rate is hovering around 9 percent already. Hey, governor, ever thought of cutting spending for a change? Like, lawmakers' salaries?

The reason Quinn, formerly Blago's lieutentant governor, is calling for this massive tax hike and infusion of money is the state owes $11.5 billion. So, the governor figures a tax hike is the way to go. Whoa, these guys daily increase the target-rich-environment for Republicans next year.

The Hound has two words for Pat Quinn: Richard Ogilvie. And for those who don't know who that is, Google it.

We now see why Chicago-based Northern Trust quickly returned that $1.6 billion in federal TARP money: Its president and CEO earned $6.1 million, most of it in stock and option awards, last year. If they can give out bonuses that big, they don't need no stinking TARP funds.

If Frederick Waddell is the norm and not the exception in this industry --- at the root of the economic meltdown --- no wonder the Average Joes and Janes don't trust the banking bailouts. However, his compensation last year was down from the $14.4 million he earned in 2007. All this can be found in the firm's regulatory filing it deposited last week with the Securities and Exchange Commission.

Perhaps, though, Waddell earned his keep. Northern Trust, after all, has been profitable, even after sponsoring lavish parties and concerts during the Northern Trust Open at a posh Los Angeles area country club last month.

Yet, it seems systemic of the banking industry and if cable networks are looking for a new reality series, The Hound has a suggestion: "Bashing the Banker".

The show would pit different bankers versus each other to find which one could waste more on inane lifestyles and investments than the next. Sort of like "The Real Housewives of Orange County" and its various spinoffs from Atlanta to New York. Then a panel of judges, like in "Top Chef", gets to grade each of the bankers on how profligate they are. The winner gets a bonus; the loser gets flogged.

This idea has legs, The Hound believes. Everybody else is bashing them so it's time for reality to set in.

It's taken a year, but the government finally admits what most of us have thought all along: The United States is in a recession. Ah, but according to the announcement Monday from the National Bureau of Economic Research, we've been in a recession since December 2007.

The Hound certainly must have a recessive gene and be a little slow on the uptake, but it's taken some Washington economic think-tank policy wonks this long to determine we've been in an economic downturn for that long? Maybe they have the recession gene because the usual definition of an official recession --- if The Hound remembers Econ 101 correctly --- is that gross domestic product declines for two consecutive quarters. Last quarter GDP, the nation's total output of goods and services , declined. We'll see what happens this last quarter.

But if we've been in a recession since last December, this would be the second economic downturn on George Bush's watch. No wonder Republicans got clobbered in last month's election. And, it would be just one more notch in Bush's presidential legacy.

The Hound has been beating up the Wall Street bankers, credit managers, the Bush administration and certain members of Congress who went along with the financial meltdown we've been nervous about the past few weeks. Like the rest of you, The Hound's mistress' 401(k) is now a 104(k). She says her early retirement target date is now age 86. But then The Hound did some research.

Boy, are we a bunch of stupids in this country, living on borrowed time --- borrowed money time, that is.

Blame Wall Street? Hah, look in the mirror, rubes. Check out these facts:

1) Today, the average American household has $8,565 in credit-card debt, a figure 15 percent higher than it was in 2000, when President Bush was narrowly elected.

2) Nearly 30 percent of the U.S. national debt --- $2.6 trillion --- is held by foreign governments. The top four? Japan, China, United Kingdom, Brazil. How did the Carnivale country get to own a piece of the U.S. rock?

3) Forty-three percent of U.S. households spend more than they earn annually, therefore living on credit card debt. See No. 1 above.

4) Forty-four percent of American households say they live "pay check to pay check" --- up from 37 percent in 2006.

5) About 42 percent of U.S. households lack enough liquid savings to support themselves for three months.

So the next time you want to blame politicos for the state of your personal economy or even the nation's economy, remember the 1992 Clinton campaign mantra: It's the economy, stupid. In this case, as we approach Election Day 2008, it's plural.

So don't expect Uncle Sugar to bail you out. You have no credit or capital and are close to having no collateral. Welcome to the Third World.

As a taxpayer, The Hound is one of the millions of Americans who own a stake in AIG, the once-mighty insurance giant now 80 percent owned by the government. The Hound wants a free spa retreat like those company executives got less than a week after Uncle Sugar bailed them out to avoid bankruptcy.

No wonder Americans were skeptical of the bailout and afraid the fat cats would make out when the average Joe Sixpack, as Alaska Gov. Sarah Palin characterizes them, is left holding the bailout bag. Read on, feather merchants.

According to The Associated Press, the American International Group, Inc., which the federal government gave a $85 million loan for that aforementioned stake, sent executives on a $440,000 retreat to a tony Southern California resort. The tab included $23,380 of spa luxuries for said AIG employees. If The Hound gets a flea dip, it's a special day.

Did The Hound mention that because of getting involved in shaky sub-prime mortgage-related securities, AIG executives withheld damaging auditing reports from stockholders? Yup, smells just like Enron.

The Hound invites other AIG stakeholders to request the spa weekend at the SoCal retreat. Wonder if they'll mind if The Hound rolls around in a mud bath. They're so refreshing, yet expensive.

The Hound has been living in a recession for most of the past decade. If Republicans in the House want to take you all into one, as their president has warned, let them do it. Hope they and their party are ready to face the consequences in the failure Monday to protect the financial basics of the U.S. economy.

Unless you can't add, the financial markets have been taking a beating the last few months or more because of bad mortages, bad debt and bad management. It's a disaster movie befitting a Hollywood blockbuster. Trust me, feather merchants, this could get ugly. Better yet, don't trust me, trust your president, the Fed chairman and every banker from here to What Cheer, Iowa.

The consequences for Republicans, especially those who voted against the $700 billion bailout package is they get voted out and become the minority party for the next 30 years as they were until the GOP revolution of the 1980s. They can run, but they can't hide.

And, don't give The Hound the baloney about nobody bails out the taxpayers. When the taxpayers hold the power to issue business lines of credit, mortgages, car loans, just to name a few financial uses for lent money, then your opinion counts.

Besides, the government does bail out taxpayers. There's unemployment insurance, food stamps, disaster relief. This wouldn't be the first financial bailout. Remember the Resolution Trust Corp. of the '80s and the savings and loan debacle. The Hound was told several Lake County savings and loans got caught up in that financial nosedive.

Looks like the Republicans are holding pat in their crusade to save Main Street from the ills of Wall Street. Good luck because it's a little late for that. Hold on to your wallets folks, it'll be show time today on the Big Board.