Advertisement
YOU ARE HERE: LAT HomeCollectionsNews

Gov. Jerry Brown appoints jobs czar

California's new jobs czar, former Bank of America and GMAC executive Michael Rossi, will serve as a liaison for businesses, labor and Gov. Jerry Brown's administration.

August 18, 2011|By Michael J. Mishak, Los Angeles Times
  • Gov. Jerry Brown has been criticized for not doing enough to revive the state's ailing economy, but economists say his new jobs czar will have little power to counter the forces of the national recession.
Gov. Jerry Brown has been criticized for not doing enough to revive the state's… (Mark Boster / Los Angeles…)

Reporting from Sacramento -- Gov. Jerry Brown, under fire for not doing enough to revive the state's ailing economy, named a jobs czar Wednesday, but economists say he will have little power to counter the forces of the national recession.

Former Bank of America executive Michael E. Rossi will be an unpaid go-between for businesses, labor leaders and the administration, according to a news release from Brown's office. He will "streamline and invigorate the state's economic development infrastructure" and advise the governor on regulatory, legislative and executive actions to stimulate job creation, the announcement said.

"Will it make a difference in the short term?" said Christopher Thornberg, principal of Beacon Economics, a consulting firm in Los Angeles. "The answer is almost certainly not."

Experts say the state's sour economy is still reeling from the national downturn, rooted in the mortgage crisis and credit crunch that put hundreds of thousands of people out of work in construction-related industries that are unlikely to rebound anytime soon. Sagging consumer confidence and spending are also sending ripples through the economy.

"Governors have almost no short-term levers or tools," said Stephen Levy, director of the Center for Continuing Study of the California Economy. "They can't change interest rates, can't make international trade policy and can't run deficits."

California has the nation's second-highest unemployment rate, a fact experts attribute largely to the state's real estate bust. Rossi spent the year before the crash running the home mortgage arm of GMAC, the country's fourth-largest residential lender, which later required a federal bailout due to its heavy bet on subprime loans.

Rossi could not be reached for comment, but Brown's spokesman said Rossi was charged in that position with turning around a company that had invested in subprime markets and was not involved in the bad loans.

Business leaders welcomed Brown's announcement.

"Mr. Rossi's long and varied career as a businessman and investor will serve the governor well in identifying barriers to job creation and addressing the perceptions and reality of our difficult business climate," said a statement from California Chamber of Commerce head Allan Zaremberg.

The appointment comes on the heels of calls by legislative leaders for Brown to articulate a policy agenda that goes beyond the state budget. Lt. Gov. Gavin Newsom announced a jobs plan last month, and California Senate leader Darrell Steinberg (D-Sacramento) announced this week that overhauling state regulations would be his top priority in the remaining weeks of this year's legislative session.

The governor has joined economists in suggesting that more fiscal stimulus is needed from Washington while he struggles to keep the state's budget balanced. "Obama and the federal reserve are trying their best," the governor said in a recent interview. "They have the currency to play with."

Brown spokesman Gil Duran said Wednesday that the governor would draw from the renewable-energy jobs plan he offered during his campaign and "bring some of these ideas into sharper focus in coming weeks." He said Brown would work with Rossi and the Legislature to streamline business regulations and eliminate duplicative agencies.

Economists said that such measures, in addition to expanding job-training programs, could improve the state's competitiveness and lay the foundation for more investment, but the state would remain largely at the mercy of national conditions.

"We're not seeing increase in demand in California or anywhere else," said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast, "because businesses' and consumers' expectations are somewhat muted."

michael.mishak@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|