Do It Best announced last week that it is relocating True Value’s headquarters from Chicago to Fort Wayne, Indiana, following its acquisition of True Value out of Chapter 11 two years ago. The move joins a growing list of departures including Morton Salt to Missouri, John Deere completing a 1.2 million square foot manufacturing facility in Crown Point, Indiana, and reports that State Farm and WeatherTech are eyeing exits.
James Perry, founder and CIO of Perry International Capital Partners, joined Dan Proft on Chicago’s Morning Answer to discuss the accelerating business flight from Illinois, the state of the AI-driven industrial revolution, and why the economic data tells a dramatically different story than the prevailing media narrative.
On the business exodus, Perry said business owners he knows personally who are working in executive suites in Chicago are actively pursuing alternative headquarters and production facilities outside the state. He said the trend toward democratic socialism, which he described as a polite way of saying communism, is on the rise in major American cities including New York, Chicago, San Francisco, and Seattle, and is fundamentally hostile to free market capitalism. He said any publicly traded company with a fiduciary obligation to shareholders has a responsibility to escape tax and regulatory regimes that reduce profit margins rather than allow them to grow, and that the ideological direction of Illinois governance makes the calculation straightforward.
He pointed to New York as a cautionary parallel, where the Mamdani administration has directed $2.2 billion toward a program that effectively allows the city to seize housing from private landlords under the banner of tenant empowerment. He said if they are coming for landlords in New York, the business community should understand they are next, and that peak insanity has probably not yet arrived, with November’s elections likely to produce further radicalization.
On the broader economic picture, Perry said virtually every significant economic indicator is positive and moving in the right direction despite the relentlessly negative media narrative. Industrial production was up ten percent in the first quarter, a figure he said has not been seen in decades. Durable goods orders are up, job openings are increasing, layoffs are declining, and the labor force has never been larger or more profitable in terms of earnings, even with the elimination of approximately 350,000 government jobs. He said corporate profitability continues to surprise on the upside, with S&P 500 earnings projected to rise over twenty percent for the second consecutive quarter, something that has not happened in a long time, and profit margins running at roughly fifteen percent.
He said the AI-driven industrial revolution is in approximately the second inning and that the stock market’s broadening beyond technology into industrial companies is the strongest signal that the transformation is not limited to a handful of megacap tech firms. He cited twenty-three or twenty-four all-time highs for the S&P this year and twenty-six for the NASDAQ, and said he expects that trajectory to continue through the second half. His portfolio is heavily weighted toward equities, reflecting his conviction that earnings growth will continue driving prices higher.
On Jensen Huang’s comments about the reindustrialization of the United States through AI infrastructure, Perry said this is the central story of the current economic moment and one that Illinois is completely missing. He noted that the country has roughly five thousand operational data centers and approximately three times that number in planning stages, and that the idea of peak data center construction is coming from community organizers rather than anyone with actual market knowledge. He said the United States has enormous amounts of undeveloped land with access to cheap energy and water suitable for data center construction, and that only about three percent of American land has any development on it at all.
On the concern that AI compute prices are declining, which some analysts interpret as evidence the boom is ending, Perry applied Jevons’ paradox: compute pricing has fallen roughly ninety percent since the beginning of the ChatGPT era, yet demand has increased enormously because cheaper compute makes more applications economically viable. He cautioned against the overly aggressive projections of some tech executives, citing Cerebras CEO Andrew Feldman’s claim that forty-seven million programmers spending $100,000 each on tokens would produce astronomical revenue growth, which Perry called very flimsy math since most programmers’ budgets will be closer to a thousand dollars. He said investors need to be careful about how quickly return on investment can realistically be expected from AI infrastructure buildout.
On the sentiment bifurcation that continues to characterize the economic landscape, Perry said the pattern he identified in previous appearances on the show persists. Only about thirty percent of Democrats view AI favorably, compared to roughly fifty percent of Republicans and approximately eighty percent of company founders who are actually building in the space. He said the bond market does not care about narratives and cares only about getting paid back, and that the same principle should guide how people evaluate the economy: look at the data, not the commentary. The dollar is firm against the euro and the yen, emerging market currencies are falling as money flows into the United States, corporate earnings are rising faster than costs in roughly three-quarters of the S&P 500, and the global economy’s growth forecast has recovered from approximately one percent as recently as March to over three percent for the full year.