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Southern California-Bashing at Its Gloomiest, Paid for by Its Victims : Planning: The latest 'forecast' is suitably dire to satisfy the professional doomsayers--and must reading for competitors in 49 states.

August 02, 1992|David Friedman | David Friedman is an attorney in Los Angeles and a visiting fellow in the MIT Japan Program

Over drinks in Tokyo, an American businessman was explaining how he had lured Japanese investors to his southern state. In the past, Southern California was so appealing that there was almost no point in arguing with Japanese companies to go anywhere else. Now, all he had to do was to quote the gloomy pronouncements of the region's public officials to steer the Japanese his way.

In their wildest dreams, however, Southern California-bashers in Tokyo could never have concocted a more devastatingly negative portrayal of the region than the recent population "forecast" presented by the Southern California Assn. of Governments. Amid heavy media coverage and aided by a cadre of professional doomsayers, the association depicted a "Blade Runner" future for the six-county area, in which more than 6 million people--twice as many as previous estimates--will be added by 2010. With the immigrant population swelling, the report warned, the region would experience a chronic unemployment rate of 13%, the gulf between rich and poor would widen and skilled people would rush to leave.

Although portrayed as a major planning analysis for Southern California, the SCAG report contains no new or compelling data to justify its stark conclusions. Indeed, it was so heavily criticized by professional forecasters and so riddled with questionable assumptions that no one could seriously use it as a policy tool.

Instead, the effect of SCAG's "forecast" is to gratuitously undermine the already flagging confidence many of us have in our region's future, and to provide heaven-sent ammunition for competing states or countries to woo away Southern California's most talented people and companies. Were it an isolated incident, SCAG's "forecast" could be dismissed as an unfortunate mistake of judgment. But as one of a series of publicly funded, unjustifiably apocalyptic pronouncements about our future, it raises serious questions about whether local government has the vision, confidence and ability to lead. Worse, the constant barrages of doomsday scenarios from government and business groups risk becoming self-fulfilling prophecies.

Among the report's flaws are:

-- The assumption that immigrants will continue to flock to Southern California, and local birth rates will remain high, even as social conditions deteriorate and unemployment rises. Evidence from other regions--Texas, Arizona, New York or Detroit--shows that when an economy goes sour, people move to more promising locations and put off having children.

-- The implicit belief that immigrants, and their offspring, will inevitably become welfare cases, when many are highly motivated workers and entrepreneurs who have contributed to, and will continue to drive, the region's growth.

-- The elemental failure to acknowledge that current trends can change as a result of unforeseen political, technological and economic forces. In 1972, for example, Southern California was reeling from post-Vietnam defense cuts more severe, per capita, than those today; real-estate values were sagging; traditional industries were dying. Although many argued at the time that Los Angeles was finished, those who retained their faith in the region's future reaped handsome profits when aerospace recovered and local entrepreneurs created multibillion dollar industries in then-exotic fields like personal computers.

While there is a chance that, by 2010, Los Angeles may evolve into a Third World hell, other outcomes, from the sublime to the not-so-dire, are also possible. It is thus particularly irresponsible of taxpayer-funded analysts to indulge their nightmares at a time when many Southern Californians are rethinking their commitment to the region.

Leaders in other states have instinctively realized that avoiding despair is the only way to preserve a region's integrity through hard times. When the oil bust pummeled Texas, local business-development organizations actively promoted their state's education, lifestyle and products in national and international markets, while cajoling Texan companies to redouble their commitments to the region.

Facing widespread defense-industry reductions as well as the retrenchment of many large companies in his state, Massachusetts Gov. William Weld staffed government with dynamic, optimistic leaders of smaller growth companies.

In Pennsylvania, a state once synonymous with rust-belt hopelessness, economic planners creatively fostered flexible manufacturing regions similar to those in Europe and Japan to rebuild their economy.

In contrast to Texas' Gov. Ann Richards, or Weld, California's leaders, starting with Gov. Pete Wilson, call the state "a bad product." By dithering on the budget, they hurt California's credit and reputation. The local media, seemingly heedless of the business consequences of reflexive negativity, dwell on downbeat appraisals of the region, no matter how far-fetched. Government and the programs it funds--like SCAG and Rebuild L.A.--seem paralyzed by fear and indecision.

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