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Our View

 

Date: March 24, 2010
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It seems the message from last week’s Longboat Key Town Commission elections is self-evident.

A majority of voters wants the town to go in the directions espoused by newly elected Commissioners David Brenner and Lynn Larson. Conversely, the majority told commissioners they were dissatisfied with the actions and decisions of the two incumbents who lost, Mayor Lee Rothenberg and Commissioner Peter O’Connor, and were somewhat ambivalent about another incumbent, Hal Lenobel. After running unopposed for all of his previous terms, Lenobel in his first election with an opponent, beat Phill Younger by only 94 votes.

Surely the other incumbents — George Spoll, Jim Brown, Gene Jaleski and Bob Siekmann (who won re-election by having no opposition) — have taken note and are analyzing the past year to figure out what voters are telling them to do differently.

You cannot pinpoint any one thing. Every voter votes one way for his own reasons. But here’s a generalization that appears to be pieces of a puzzle that fit together: When Longboaters participated in the visioning process nearly three years ago, two of the predominant messages were 1) they want Longboat to remain Longboat — a tropical, tranquil, upscale, resort-residential community; and 2) they recognized and expressed a desire to re-generate to a limited degree Longboat Key’s tourism industry. They recognized that an in-flow of people is essential to perpetuating Longboat as Longboat.

Voters then observed what occurred. And it didn’t add up. The defeated incumbents appeared as inhibitors in the Key Club’s efforts to move forward. And then there were other things that became debits — the employee pension funds; cell towers; tax-and-budget debates; term limits; appointments to the planning board; and in one commissioner’s case, responses and comments from the dais that appeared unbefitting of what Longboaters expect of their commissioners.

Not until the pain is too great do you change. Voters reached that point. Longboaters now want an alternative. In the words of new Commissioner Brenner, “Longboat Key’s future starts now.”

Expectations and hopes are high.

Rothenberg the gentleman
Monday night’s swearing-in ceremonies and election of the town’s new mayor and vice mayor should buoy hopes.

But first, a few important acknowledgements: Outgoing Mayor Lee Rothenberg now enters Longboat Key’s history as one of the Key’s exemplary and selfless public servants and citizens. Since moving here 15 years ago, Rothenberg has made the town’s affairs his life — 10 years on the planning and zoning board, three terms as a town commissioner, a member of the Metropolitan Planning Organization. You know, it takes a certain amount of ego to want to be a commissioner, but Rothenberg never, ever came across as a commissioner who was stroking his self-esteem. He was the genuine public servant, dedicated to and serious about what he believed best for the citizens of Longboat Key. When he gave his departing remarks Monday night, he said, “It’s no secret, I love Longboat Key … I will leave with good thoughts for everyone and everything.”

More than anything, Lee Rothenberg will be remembered as a gentleman — in the truest sense, always a gentleman.

Monday’s standing ovations were indeed deserved.

Auspicious beginning
Applause is equally due all of the commissioners. At a moment that has engendered ill will in the past — the election of a new mayor and vice mayor — all of our commissioners rose to the occasion Monday night.
In spite of differences among them, the new commission elected George Spoll unanimously as mayor. And in spite of a few votes for Siekmann for vice mayor, the seven commissioners quickly acclaimed a unanimous vote for Jim Brown as vice mayor.

Special kudos go to Siekmann, who nominated Spoll and voted for Brown instead of himself for vice mayor.

This was an auspicious start to a new commission.

Footnote: Outgoing Commissioner O’Connor did not attend.

+ Laffer: Non-stimulus bills
Mention the name Arthur Laffer, author of the famous Laffer Curve, and it always brings catcalls, coughs and harrumphs from those who will never accept the concept that cutting tax rates for everyone benefits everyone, including government coffers.

Laffer was in Sarasota recently at the invitation of Kelly Caldwell and Caldwell Trust (an old friendship that goes back to Caldwell’s father, Roland, and their days in Cleveland). And for 90 minutes, Laffer delivered an effective, easy-to-understand, extemporaneous lesson in economics that made us wish he were standing in front of every politician in America. They needed to hear him.

They especially needed to hear him on the subject of “stimulus spending” — and why it doesn’t work:
Laffer started with one of the truisms of elected politics: “Every administration from the beginning of time has believed in the tooth fairy — they all want something for nothing,” he said.

With that, we’ll ask you to think of what’s happening in Washington today. Laffer was referring directly to the Obama administration and Congress. Indeed, that’s what Obamacare is all about — giving all Americans more medical care, more roads, more schools and more social services but not paying for it today. They want future generations to pay, after they and we are long gone and can’t be shot for lowering their standards of living.

Something for nothing.

Laffer’s explanation of the stimulus went further than that. He showed its folly by way of illustration. He called his first example “the Larry Summers one.” Summers is one of Obama’s top economic advisers.

Remember the $600 stimulus check everyone received? That was money for which none of the recipients had to lift a finger to get. It showed up in your mailbox — that is, if you received one. Something for nothing.

“The logic,” Laffer said, is that the consumer will spend more and create demand for goods and services and jobs, the cascading effect.”

“So Summers sits down, and end of discussion,” Laffer said.

Voila! Economic stimulus.

“As far as Larry goes, all of what he said is true,” Laffer said. “But it’s just Chapter One of the three-chapter story.

Here’s Chapter Two: “You cannot have a transfer recipient without a transfer payor,” Laffer said.

That $600 had to come from somewhere. Someone had to pay it, or someone will pay it.

This is the Frederic Bastiat allegory, Bastiat being the French economic journalist in the 1840s. He called it the broken window effect and the “seen and unseen.”

Bastiat wrote of the young hoodlum who tosses a rock through a merchant’s window. The merchant must repair and replace his window, which means he must employ a glassmaker, window-frame maker and window installer. They all will benefit from this economic stimulus. This is the “seen.”

But what of the merchant? That money he spends to replace his window is money he no longer can use to buy a new suit and shoes. The suit maker and shoe maker will have less to spend, if not be out of jobs.

This is the “unseen.”

So it is with Laffer’s transfer recipient and transfer payor. “People whose money was taken (to pay the stimulus) will have less money to spend,” he said.

And then he was definitive: “There is no stimulus in the stimulus package.”

Laffer called this the “income effects on an economy.”

“They always sum to zero,” he said. “You cannot give to someone without taking from someone.”

Chapter Three of Laffer’s analysis of the stimulus package is called the “substitution effect.”

The substitution effect is always negative. When the price of one good increases, it causes a buyer to buy less of that good and more of the other good — substituting one for the other.

This means consumers always switch from spending on higher-priced goods to lower-priced ones as they struggle to maintain their living standards. This goes for businesses and the flow of capital as well.

Thus, as the government spends more — whether it’s sending $600 checks to everyone or borrowing $800 billion via the sale of bonds to fund roads, etc. — the money people transferred to pay for the $600 checks or to buy the $800 billion bonds reduces the money available for other productive means.

Said Laffer: “The substitution means it actually hurts output and production.” And he reminded his listeners of the often repeated question: “Have you ever heard of anyone spending himself to prosperity?”

Summarizing this lesson on how the stimulus doesn’t stimulate, Laffer said of the Obama administration geniuses who espouse this stimulus hocum:

“They’re very fine people. They’re honest. But they’re just wrong.”

An audience member told Laffer his explanation of the stimulus sounded logical and simple. Why, then, do such smart people as President Obama, Larry Summers and their associates do not understand the stimulus fallacy?

Responded Laffer: “You have to get another speaker to answer that.”

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