Obama vacations in upscale Martha’s Vineyard, while even upscale communities suffer economically here in IL and across the nation

August 19, 2011

 President Obama and his administration shot all their existing arrows from their political and economic policy quiver over the past two years to jump-start this nation’s economy, yet none of their policies worked to stave off the debt-ceiling crisis.

 

Even the upscale communities of Lake Forest and Lake Bluff in northern Illinois are being affected by the economic down turn affecting communities, not only here in Illinois, but all across this nation.

 

It stands to reason that if upscale communities are experiencing negative economic reactions, less affluent communities must be suffering even more.

 

Unfortunately President Obama, instead of dealing with the dreadful economic situation as is demanded of him as president — according to the latest Gallop Poll, only 26% of Americans agree with Obama about his handling of the economy — he is off on a 10-day vacation in the wealthy conclave of Martha’s Vineyard, with a promise to unveil his plan to jump start the economy upon his return to the White House.

 

While Obama lives a life of luxury subsidized by taxpayers, he continues to condemn those who pay themselves for the luxuries they enjoy.

 

Living in Lake Bluff, I decided to investigate the impact of the continued excessive spending at the national level in Lake Forest and Lake Bluff. Has the lowering of this nation’s credit rating by Standard and Poor from AAA to Aa+ affected the credit ratings for the Village of Lake Bluff and the City of Lake Forest?

 

In speaking with Susan M. Griffin, Director of Finance for the Village of Lake Bluff, I was informed that Lake Bluff’s present credit rating of Aa1 for all of its debt was set by Moody’s Investor’s Services in July 2006. Griffin also informed me that Lake Bluff’s Moody credit rating of Aa1 is one step down from the best, which is a triple AAA rating. As such Lake Bluff has the same rating as our nation’s credit rating.

 

According to Griffin, what happened at the national level won’t affect Lake Bluff in the here and now. Ms. Griffin hopes Lake Bluff will keep its Aa1 rating as the Village is not looking to issue any bonds in the near future.

 

Lake Forest has an AAA rating, although Mayor James Cowley, Jr. harbors some concern that Lake Forest could lose its rating stemming from a comment made by Standard & Poor that, although it expects that many who presently have an AAA rating would be able to retain it, there could be potential changes with some of the obligates. Lake Forest is considering refinancing its debt to take advantage of the recent decision by the Federal Reserve Bank to keep interest rates low for another two years.

 

I decided to look into their recent budgets. Unlike what is happening at the national level where government is spending too much, are the governments here in Lake Forest and Lake Bluff being good stewards of taxpayer monies?

 

I found that Lake Bluff’s budget for 2010-2011 was less than its budget of the previous year. In 2009-2010 Lake Bluff’s budget was set at $14.2 million for the Village and Library, while its annual budget from May 1, 2010 to April 30, 2011 came to $13.6 million.

In checking how the budgets in Lake Forest had fared, I found that its Annual Operating and Capital Budget for May 1, 2009 to April 30, 2010 totaled $82.9 million. In fiscal year 2011, Lake Forest’s Annual Operating and Capital Budget totaled $91.8 million. But the current fiscal year 2012 budget is down to about $75 million. All three budgets were balanced.

 

Obtained through Freedom of Information Act requests were somewhat disturbing reports about the compensations being received by the city managers of Lake Forest and Lake Bluff. Being a Lake Bluffer, I was especially interested in what seems like an overly generous compensation for Lake Bluff’s village manager, but it’s up to residents of Lake Bluff and Lake Forest to consider what is an appropriate compensation for their city manager as their taxes are involved.

 

The compensation for Lake Bluff’s village manager includes: Starting salary of $142,000; $10,000 allowance for reimbursement of moving expenses; $10,000 deferred compensation; $4,800 auto allowance; life insurance policy valued at approximately $462,300; and $200,000 interest-free loan towards the purchase of a new home.

Here are some statistics for Lake Forest: Salary $175,860 in 2010; 100 percent health/dental/life; $84,000 home loan/no interest.

 

I decided to venture out into Lake Bluff and Lake Forest to hear first-hand how small businesses were faring in this down economy.

 

I made stops at five small businesses, all members of the Lake Forest/Lake Bluff Chamber of Commerce. I was not surprised at what their shop owners and those in charge shared with me.

Peg Gronau, owner with husband Kurt of Peg Ann Kompany at 79 E. Scranton Avenue in Lake Bluff, was not shy in telling me that “people are watching what they are spending. They are being careful watching their pennies.”

 

It was David Lee, owner of the Clockworks at 34 E. Center Street in Lake Bluff, whose insightful explanation pointed to the failure of a federal policy. As a matter of background, President Obama passed a $831 billion stimulus bill in February, 2009 as a means to jump-start the economy.

 

According to David Lee, “People are not stupid. They are not spending more money before they are comfortable. The economic stimulus money has never gotten down to small businesses. It is sitting in the pockets of large businesses and banks who received it. They are not spending it or lending it out, but it is being used to fix their balance sheets.”

 

Emporium Luggage, located at 662 N. Western Avenue in Lake Forest, is a poignant sign of the faltering local economy, although Emporium Luggage is but the most recent small business to close its doors in Lake Forest and Lake Bluff.

 

I spoke with Ingrid Schubert who informed me that the decision to close Emporium Luggage was an “economic” one. Ms. Schubert went on to say that “We are sorry to leave. We had a good relationship here in Lake Forest and we just had to go. We thank everyone for their patronage over the years.”

 

It was time to check with small business owners who sell and/or serve food.

I caught Douglas Karnazes, owner of Bluffington’s at 113 E. Scranton in Lake Bluff, at a most inopportune time when he was busy filling lunchtime orders. Even so Douglas replied: “I’ve noticed a little down turn but not all that much. I realize people have less money to spend, and I do appreciate those who support my business.”

 

Kristi Loucks of Wildflour Bakery & Cafe, in business with Ann Sorlie-Fisher for a little over two years and located at 14 East Scranton Ave. in Lake Bluff, told me, “Business is pretty much the same despite periodic seasonal drops. Every body needs to eat. Shoppers do watch their pennies even when the economy is good.” I find that a good pastry, especially a chocolate-based one, ranks high and is an inexpensive way to lift my spirits or to celebrate a job well done.

 

Given my somewhat dismal report of how Lake Forest and Lake Bluff businesses and residents are weathering uncertainty, it seems reasonable to conclude that it might take until after the 2012 elections until policies can be enacted which will at least start communities here in Illinois and throughout this nation on a road back to financial responsibility and solvency, which will accordingly result in a positive economic up tick for Lake Forest and Lake Bluff.

 

Hopefully by then it isn’t too late to right this nation from financial Armageddon.

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