It All Boils Down to Jobs

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As the new year dawns, the picture for California and Los Angeles indeed looks bleak. I would like to write this op-ed piece with a positive tone about how the business communities of our city and state have the answers to overcome the picture I am witnessing, but I cannot.

For example, many retailers are fighting to stay alive and are asking their landlords for consideration on their rent costs with the intent of making their obligations up in the future when things get better. But the stories I am hearing is that the landlords are hanging in there, with any number of them saying if the retailers move out, there will be other tenants to take their places. The worst offenders are at the large real estate companies that are playing with other people’s money; they fear that if they grant allowances, they may lose their jobs.

I have a secret for them: They are going to lose their jobs anyway. They seem to be living on another planet and have no idea what is happening out there.

I spent a long weekend before Christmas in Costa Mesa and at the South Coast Plaza Shopping Center. All of the shops, especially the high-end ones, were offering 40 percent to 60 percent discounts. Many of the shops were empty, and I didn’t see many people carrying bags. The retail business is hurting. Retailers need help from the landlords and extended terms from their suppliers, and they are not getting it, which leads me to the major problem we face: jobs, jobs, jobs and more jobs.

I saw where President Obama was considering dropping or eliminating long-term capital gains taxes for small businesses. Will some one explain to the president that small businesses are not worried about their long-term capital gains taxes, they are worried about living to fight another day. What this country needs is a program that will entice small businesses to invest in their businesses and hire people. The more people they hire, the more people there are to buy their goods.

Henry Ford figured that out years ago when he was the first major manufacturer to pay his workers $5 a day. When asked why he did such a crazy thing by paying so much, he said at $5 a day his workers could afford to buy his Model Ts. About 100 years later, everyone has forgotten this simple rule.

Congress had no problem giving hundreds of billions of dollars – if not trillions of dollars; we don’t know the total yet – to the fat cats who give them all that money to fund their campaigns, but they worry that a program to help small business is too expensive. If I had the power, I would reconstitute the Small Business Administration. I would eliminate all the technicalities about a history of profits or personal guarantees and securities pledged, and I would throw money at those small businesses that appear to have what it takes to succeed. The Business Journal in November identified the 100 fastest-growing private companies in Los Angeles County. If they were given federal money to help them grow, how many more jobs could be generated? Look at the ripple effect it would have on the city and the state with increased revenue.

Domestic spending

There should be only one caveat: The money has to be spent in the United States. Worldwide free trade can wait while we try to save ourselves.

Sure, some of the money would go where it shouldn’t go and yes, some of those companies might not even make it. But I bet the majority of them would make it and they would create jobs.

I’ve been told I am very opinionated, and that is true. But I must admit I have no opinion or idea of how to save California from its own improper governance over so many years. California didn’t destroy itself overnight. It has happened over many years dating back, at least in my memory, to Proposition 13, which I reluctantly supported.

As to the city of Los Angeles, it is on its knees, but still the City Council has approved big salary increases for Department of Water and Power employees that businesses and homeowners are going to pay out of their dwindling income in the form of higher rates.

So, as opinionated as I may be, I have no answers as to how we keep our elected officials from making a bad situation even worse.

Having said all of this, I remain a pessimistic optimist about our future. On an episode of “60 Minutes” last month, I saw doctors growing new heart valves, bladders, kidneys and even an ear and a finger, and I think of what America could still be; how incredible the talent is in this country. If only we had the same talent in government positions to guide this great city, state and country.

Harold L. Katz is a partner in an accounting firm in Los Angeles. He is a citizen activist.

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