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Wednesday, February 25, 2009

The decline of Los Angeles

Article from New Geography. I forwarded this to a friend of mine and he really wants to get Mayor Antonio Villaraigosa gone! Something is up out there although the article seems to predict a Villagraigosa victory.
A century ago, when L.A. had barely 100,000 souls, railway magnate Henry Huntington predicted that the place was "destined to become the most important city in this country, if not the world." Long run by ambitious, often ruthless boosters, the city lured waves of newcomers with its pro-business climate, perfect weather and spectacular topography.

These newcomers--first largely from the Midwest and East Coast, and then from around the world--energized L.A. into an unmatched hub of innovation and economic diversity.

As a result, L.A. surged toward civic greatness. By the end of the 20th century, it stood not only as the epicenter for the world's entertainment industry, but also North America's largest port, garment manufacturer and industrial center. The region also spawned two important presidents--Richard Nixon and Ronald Reagan--and nurtured a host of political and social movements spanning the ideological spectrum.

Now L.A. seems to be fading rapidly toward irrelevancy. Its economy has tanked faster than that of the nation, with unemployment now close to 10%. The port appears in decline, the roads in awful shape and the once potent industrial base continues to shrink.

Job growth in the area, notes a forecast by the University of California at Santa Barbara, dropped 0.6% last year and is expected to plunge far more rapidly this year. Roughly one-fifth of the population depends on public assistance or benefits to survive.

Once a primary destination for Americans, L.A.--along with places like Detroit, New York and Chicago--now suffers among the highest rates of out-migration in the country. Particularly hard hit has been its base of middle-class families, which continues to shrink. This is painfully evident in places like the San Fernando Valley, where I live, long a middle-class outpost for L.A., much like Queens and Staten Island are for New York.
Keep reading he's starting to look like a Rod Blagojevich knockoff. Except that he's probably not as corrupt or willing to shakedown anyone.

In contrast, Villaraigosa, according to a devastating recent report in the LA Weekly, spends remarkably little time--about 11%--actually doing his job. The bulk of his 16-hour or so days are spent politicking, preening for the cameras and in other forms of relentless self-promotion.
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Certainly, odds against changing the current political system seem long to an extreme. The once-powerful business community has devolved into a weak plaintive lobby who rarely challenge our homegrown Putin or his allies in our municipal Duma.

Of course, entrepreneurial Angelenos still find opportunities, but largely by working at home or in one of the city's surrounding communities. They tend to flock to locales like Ontario, Burbank, Glendale or Culver City, all of which, according to the recent Kosmont-Rose Institute Cost of Doing Business Survey, are less expensive and easier to do business in than L.A.

"It's extremely difficult to do business in Los Angeles," observes Eastside retail developer Jose de Jesus Legaspi. "The regulations are difficult to manage. ... Everyone has to kiss the rings of the [City Hall politicians]."

Legaspi, like many here, still regards Southern California as an appealing place to work, but takes pains to avoid anything within the purview of City Hall. As the economy recovers, I would bet the smaller cities around L.A. and even the hard-hit periphery rebounds first.
The signs of the times right now is ineffectual politicians. Rod Blagojevich, take away his corruption and you still had an ineffectual politician. We might be more concerned about that now than ever before. Now we trust them with more money and we hope they'll place it in the right places.

If LA falls into a decline might Chicago get it's return to the status of America's Second City. Or will Houston, TX become the next desirable place to live and do business. Of course it helps if you have accountable and effective leadership that caters to these issues of standard of living and commercial activity.

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