Friday, July 29, 2011

How Los Angeles Lost Its Mojo - By Joel Kotkin via Ron Kaye's blog

How Los Angeles Lost Its Mojo

Ron Kaye
 on July 28, 2011 9:34 PM 
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Editor's Note: This article by social critic Joel Kotkin, professor of urban development at Chapman University and a frequent writer on Los Angeles, was published in Friday's Wall Street Journal. It is adapted from a longer article being published in the City Journal's Summeri Edition.  

The city's misguided political leaders 

could turn this economic dynamo 

into an Athens by the Pacific.

Los Angeles today is a city in secular decline. Its current political leadership seems determined to turn the sprawling capitalist dynamo into a faux New York. But they are more likely to leave behind a dense, government-dominated, bankrupt, dysfunctional, Athens by the Pacific.
The greatness of Los Angeles stemmed from its willingness to be different. Unlike Chicago or Denver or New York, the Los Angeles metro area was designed not around a central core but on a series of centers, connected first by railcars and later by the freeways. The result was a dispersed metropolis where most people occupied single-family houses in middle-class neighborhoods.
Lured by the pleasant climate and a business-dominated political economy, industries and entrepreneurs flocked to the region. Initially, the growth came largely from oil and agriculture, followed by the movie industry. Defense and aerospace during World War II and the postwar era fostered a vast industrial base, and by the 1980s Los Angeles had surpassed New York as the nation's largest port, and Chicago as the nation's leading industrial center.
The region hit a rough spot as the end of the Cold War led to massive federal cutbacks in aerospace. Los Angeles County lost nearly 500,000 jobs between 1990 and 1993. But it bounced back, adding nearly 400,000 jobs between 1993 and 1999. Aerospace never fully recovered, but other parts of the industrial belt--including the port and the apparel and entertainment industries--grew. An entrepreneurial class of immigrants--Middle Eastern, Korean, Chinese, Latino--launched new businesses in everything from textiles and ethnic food to computers. The pro-business mayoralty of Richard Riordan and the governorship of Pete Wilson restored confidence among the city's beleaguered companies.
Then progress stalled. Employment stayed relatively flat from 2001 until 2005, when Mayor Antonio Villaraigosa was elected, and then started to drop. As of this March, over the entire L.A. metropolitan area, which includes adjacent Orange County, unemployment was 11.4%--the third-highest unemployment rate of the nation's 20 largest metro areas.
Why has Los Angeles lost its mojo? A big reason is a decline in the power and mettle of the city's once-vibrant business community. Between the late 1980s and the end of the millennium, many of L.A.'s largest and most influential firms--ARCO, Security Pacific, First Interstate, Union Oil, Sun America--disappeared in a host of mergers that saw their management shift to cities like London, New York and San Francisco. Meanwhile, says David Abel, a Democratic Party activist and publisher of the influential Planning Report, once-powerful groups like the Los Angeles Chamber of Commerce and the Los Angeles County Economic Development Corporation lost influence.
The machine that now controls Los Angeles by default consists of an alliance between labor and the political leadership of the Latino community, the area's largest ethnic population. But since politicians serve at the whim of labor interests, they seldom speak up for homeowners and small businesses.

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