By HAROLD L. KATZ

An issue that’s critical to our recovery, be it Los Angeles, the state or the nation, is the pendulum of power.

For eight years the pendulum swung to the side of business and deregulation, and we all know where that got us. Now the pendulum of power has swung to the other side and it rests with the unions, who have waited for this day with bated breath. It is precisely this time in our economic history when we need the pendulum to find the center. But that is not the nature of pendulums; they are either left or right and they swing through the center at a rapid pace.

I was brought up in a Teamster household. Both my father and my brother were Teamsters and were able to retire with small pensions. I understand the purpose of unions and the good they have accomplished as well as the negative things they sometimes do. Have you ever been on a Hollywood set and seen the cost of some of the union rules? The result is that many TV shows and movies are now made in other places. The rules are self-defeating; instead of creating jobs, they cost jobs.

I’m all for the union doing its job, which is protecting the workers it represents. If business had not at one time mistreated their employees, there might not have been a need for unions. But they did, and the union movement was born.

It is with deep regret that I anticipate little or no assistance from any large union in addressing the very real problems that our failing economy requires, whether it be the auto workers or government employees. Even if you were to stipulate that unions hold no responsibility for the problems that have to be dealt with, and that is not something I would be willing to stipulate to, it is time for all union workers to face the fact that what was is no more. And if we want to get it back to a reasonable level again, they must accept changes that in the past were unacceptable to them. They must convince their leaders as to what has to be done.

Shuttered shop

Fifty years ago I left Detroit after a failure of my client and me to negotiate four reasonable changes to a contract with a tool and die local union. There were 400 jobs at stake, my client was losing millions, but the union refused to budge. My client decided to pull the plug. They padlocked the doors, laid off 400 workers who wouldn’t have been laid off if they had budged, filed a refund claim for tax paid in prior profitable years resulting from a loss carry-back, auctioned off the equipment and retired to Florida. I decided Detroit was no place for an ambitious young CPA so I moved to California, and it was the smarted thing I ever did.

Now, 50 years later, I don’t think anything has changed. Ultimately, thousands of jobs will be lost, whereas working together, many if not all jobs can be saved. Life isn’t what it used to be, and everyone is going to have to change their thinking and their way of life. Los Angeles cannot print money like the Federal Reserve Bank can, so something has to give. There simply isn’t enough money to pay everyone what they have been paid in the past.

One closing thought that never seems to be discussed. Every social program in this city, this state or this country, ultimately is funded from the taxes on the profits generated by a healthy economy. Los Angeles is the most important or certainly one of the most important economic engines in California and it is driven by small firms of 50 or less employees.

Recently, Mayor Antonio Villaraigosa called for the city unions to share in the sacrifices that everyone is being asked to make. I would like the union leaders to surprise me and step up to the plate to make the contributions needed by their members to help turn this economy around.

Harold L. Katz is a partner in a CPA firm in Los Angeles and a citizen activist.