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Cities will have to lead state’s recovery

By   /   Friday, October 21st, 2011  /   Comments Off on Cities will have to lead state’s recovery

Californians are learning how to muddle through the recovery.

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Amid the chaos of the political scene, the Occupy Wall Street movement and the on-again, off-again prospect of the Eurozone breaking up, something is happening to the California economy.

I am not completely sure what it means or how long it might last.  But Californians are learning how to muddle through the recovery.

Let’s begin with Gov. Jerry Brown. He still hasn’t found a formula that will lead to an easier time for businesses when it comes to work rules, taxes, litigation and costs in all sorts of crazy areas. But he has done some common sense things to keep the economy from going off the rails. He did sign bills to speed construction of the new Los Angeles football stadium and, more importantly, to give large projects with an impact of $100 million or more a chance to go forward in a way that streamlines environmental review and litigation.

He also vetoed a so-called “big box” law that would have put big restrictions on national retailers trying to expand into new areas. This is controversial and opposed by many grassroots community organizations, but Brown had the courage to buck his natural constituents and veto a bad bill. Part of the reason is Economics 101 — big box retailers produce the sales tax revenue that’s badly needed by many struggling municipalities.

Then there is Michael Lewis, the journalist and author whose book “Moneyball” has been turned into a popular film about baseball, the Oakland Athletics and a probabilistic approach to picking players.

Writing in the Sept. 30 issue of Vanity Fair, Lewis begins with a recitation of the Golden State’s terrible debt burdens, its upside-down priorities and the prospect of California fulfilling market analyst Meredith Whitney’s prediction of a coming wave in defaults on municipal bonds. “Could California’s Nightmare Scenario Come True?” is a birds-eye view of what ails the state, beginning with a lengthy interview with Arnold Schwarzenegger.

Lewis travels to San Jose, where the mayor is slashing spending and cutting pensions in an effort to balance the budget. He goes to bankrupt Vallejo, a poster-child for the coming wave of defaults in public-sector debt. But when it comes to declaring California the new Greece, Lewis hedges his bets. He discovers that mayors and fire chiefs are adapting to the new normal, figuring out ways to deliver at least essential services at much lower cost.

There is a possibility that compared to other large states with big fiscal problems — New York, Illinois and Florida, for example — California will stumble into solutions that allow it to reinvent government. Most of those solutions will come not from Sacramento but from cities such as San Jose and Vallejo finding ways to innovate and serve their residents at the same time.

When you look at how our region’s cities, such as Ventura and San Luis Obispo, are trying to re-invigorate a start-up culture, or how Santa Maria and Oxnard are trying to reinvent their manufacturing bases, that’s also encouraging.

If the Great Recession slowly morphs into a Great Recovery, the question is whether the Golden State will become a poster child for how a once shining example of innovation fell far behind the pack — or whether somehow California, despite its debt burdens and screwed-up priorities, will find a way to be back on the cutting edge.

• Contact Editor Henry Dubroff at [email protected].

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