Political foreclosure

All this makes the erosion of jobs outside real estate even more troubling. Since 2006, employment in L.A. County has dropped by about 2% in the manufacturing, financial services, retail and information sectors, the latter of which includes the entertainment industry. Meanwhile, business expansions in the county in 2007 fell 22.5%, according to an April report from the Los Angeles County Economic Development Corp., a nonprofit organization.

Apparently, Villaraigosa didn't see the economic downturn coming; he has already conceded that he didn't recognize how precarious the revenues from the real estate boom might be. Had he known in August what he knows now, the mayor has said, he would not have approved big raises for city workers.

Last week, during a real estate conference at the Biltmore Hotel, City Planning Director Gail Goldberg told me how amazed she was that Los Angeles, unlike her former hometown of San Diego, still has no city department dedicated to economic development. Nor is there any single person in city government recognized as in charge of boosting local commerce.

Los Angeles could certainly use such a department. The most recent Kosmont-Rose Institute "Cost of Doing Business Survey" reported that Los Angeles remains the second-most-expensive city for businesses, behind Santa Monica, in the county and third most in the state, behind San Francisco and Santa Monica. Any hope of reform in terms of tax or regulatory relief, suggests Larry Kosmont, the report's author, is unlikely because of the city's fiscal crisis.

Ironically, among the biggest economic losers during the Villaraigosa administration may be working-class Latinos, who constitute a key element of his constituency. Traditionally, Latinos have relied on manufacturing for jobs, but, countywide, these jobs have declined 15% since 2002.

Many of the employment losses have been concentrated in automotive, aerospace and heavy industry. In contrast, the garment industry, now the largest industrial employer in the city, has largely defied the slow erosion of jobs in the city. But that may be about to change.

Uri Harkham, president of Jonathan Martin, a clothing manufacturer, has cut his workforce from 600 to 120 during the last few years. He blames City Hall for the cutback because it has not protected the area from immigration crackdowns and has not supported worker-training programs. Worse still, he says, has been the speculative pressures of developers seeking to build residential units in the garment district, which have driven up rents for manufacturers and wholesalers.