In difficult times, which are certainly upon us, people, leaders and regions show the content of their characters. Sadly, it is not certain that Los Angeles’ business and political elite possess much.

For the most part, the natural temptation of our leadership has been to do what they do best whine. These are habits that are deeply entrenched in Los Angeles, stemming from the massive hits of the early 1990s, including the aerospace implosion, the riots and the Pharonic litany of natural disasters. We whined too much then and paid the price.

“It’s never good to bitch and moan,” asserts economist David Friedman, who locked horns with much of L.A.’s political and business establishment during the early ’90s on precisely these issues. “The bailout you seek won’t come and you lose capital you would otherwise attract.”

To follow this approach now, Friedman argues, would be foolhardy. Although Southern California will continue to be hit from the Sept. 11 attacks, as well as the already deepening recession, this is not a time for us to feel sorry for ourselves. Indeed, to anyone who has traveled to New York recently, it is unseemly for the City of Angels to be whining about the hard times that Osama bin Laden’s thugs have put us in.

Gotham indelibly scarred

Sure, L.A. is taking a hit, but our losses are nothing like those that New York faces. Gotham has been indelibly scarred. According to the City Controller’s office, as many as 150,000 jobs may be lost permanently. The city’s economy, already in bad shape before Sept. 11, will lose over 100,000 jobs over the next few months. With its overwhelming dependence on Wall Street, the city’s budget outlook is, as the likely next Mayor, Mark Green, suggests, worse than at any time since the dismal early 1970s.

By contrast, Los Angeles County’s economy is actually doing better than most around the country. According to the most recent job growth numbers collected by Friedman, L.A.’s economy is growing slowly compared to the recent past, but faster than many other regions besides New York, including such former high-flyers as North Carolina, Atlanta, Phoenix and Seattle. Areas surrounding L.A., like San Bernardino-Riverside, remain among the few stalwart growth regions in the country.

Looking for real pain? Just look at places like the Midwest, where slackening demand for industrial production is causing dislocation not seen since the 1970s. Detroit, Cleveland and Chicago are hemorrhaging jobs. Significant job losses are taking place in once “hot” high-tech places like Portland and, of course, the San Jose area, which has been crashing down since the dot-com implosion last year.

This is not to say there isn’t real suffering in Los Angeles. The tourism industry here, as in the rest of the country, has taken a real hit. And as the city and county officials rightly point out, many of these people are themselves working class and barely making it.

But Los Angeles is far less vulnerable even to a tourist implosion than many believe. Los Angeles ranks well above the national average in number of airport employees, according to Milken Institute data. Despite being the home of Universal Studios, the region ranks 110th in relative concentration of theme park and recreation services far less than many communities in Florida and the Northeast. The same pattern applies to hotels, where our pain is considerable, but our exposure is somewhat below the national average.

Dealing with aftershocks

The issue is not to deny we will suffer some aftershocks from 9-11, but what should be done about it. Labor and the activist left leaders clearly hope to find new Mayor James Hahn as easy a mark as his stridently left-oriented election opponent, Antonio Villaraigosa. They have floated the idea of the city starting some sort of New Deal public works program for laid-off workers, accelerating public works spending.

Yet, as the Mayor himself has suggested, the city budget will need to be reduced, not expanded, so where is the money to come from, Santa Claus? Certainly the state, thanks to the recession and Gray Davis’ mismanagement of the energy crisis, will be in no position to help. Nor is Washington, under Texan rule, likely to be forthcoming to help out a city that is not particularly suffering and is located in the wrong state anyway.

What Los Angeles needs instead of whining is the kind of defiance that has become New York’s last line of defense. The difference is we have a better hand to play. We now need to get out with a positive message that this city, with its vast diversified economy, is a good place to invest and do business.

Many of our key assets, from the port and Hollywood to the high-tech defense complex, seem likely to hold their own, or perhaps even expand, in the coming year. Our vast internal market, anchored by the fast-growing Latino sector, provides local firms, from mortgage lenders and supermarkets to construction companies, with a seemingly inexorable growth engine.

There are concrete things the city could do for the overall economy, such as rationalizing business taxes. The Mayor’s people also could deal with the unholy mess that is now Los Angeles International Airport, now renown among travelers nationwide as perhaps the worst in the nation.

Governmental efficiency, frugality and attention to the basic infrastructure of the economy not just particular parts of it would be the best approach to the current downturn. The best salve for those hurt by the Sept. 11 attacks would be to encourage the expansion of businesses in other sectors, which could pick up the slack.

Above all, we must retain a sense of confidence and balance about the real state of the Los Angeles economy. This is the kind of common sense we did not exercise in the early 1990s, until Richard Riordan effectively helped turn the city around. We have to hope our current leadership learns the lessons of history and commits itself to doing the right, albeit not always the politically easy, things.

Joel Kotkin is a senior fellow at the Davenport Institute for Public Policy at Pepperdine University and at the Milken Institute in Santa Monica. He can be reached at [email protected].