Once the leader in innovation and technology, the driver of job creation and entrepreneurial spirit, Los Angeles now has one of the highest unemployment rates in the nation.
California was the model for the rest of the country, with the seventh largest economy in the world. Now, it has the highest foreclosure rates and mortgage delinquencies in the nation. and its citizens pay some of the highest personal and business tax rates.
Los Angeles faces the real threat of insolvency, a fact that was brought into the spotlight in the City Council’s recent bitter dispute with the Department of Water and Power. Credit rating agency Moody’s downgraded the rating on general obligation bonds issued by the city, signaling erosion in the faith and credit of Los Angeles.
For many, the sun no longer shines on California like it used to. The Los Angeles Unified School District, along with almost every local agency, is facing critical budget deficits and no one wants to make the tough decisions necessary to correct the systematic problems that our city faces.
Many people are asking why and searching for answers. To me, the answers are clear and simple.
We have become lethargic and lost our competitive edge. We have soaked in a sense of entitlement that is venomous to the very traits that took this city and state to the forefront of the world. The easy flow of money and lack of discipline that the last decade of prosperity brought us eroded our core values of hard work, and made us lazy and overly comfortable.
While we sit and gloat or ponder the possibilities, our neighbors across the ocean in China, Brazil and India are working hard to create products and services not only for their citizens but for others around the globe.
Enough bickering about unfair this or unfair that. Enough infighting between our elected politicians and, most importantly, enough of this nonsense that we are entitled to everything. We are not entitled to anything. Everything must be earned.
Through hard work, education and luck, we can have everything. There is enough to go around for all, but we must go back to basics and once again become a creative, entrepreneurial, hardworking people. We must elect officials who value hard work, and can make the tough decisions that we need to get our city and state out of the slump they’re in.
The public sector was created to support the private sector, not to surpass it and ultimately bankrupt it. The public sector can not create enough revenue and innovation to lead us back to prosperity. The private sector must do that.
Government pensions and unions, along with our elected officials, must come to the stark realization that unless severe cutbacks in the public sector are made, we will inevitably be forced into bankruptcy, which would be devastating for all involved.
Yes, it’s easier to increase government. Yes, it’s easier to increase taxes. Yes, it’s easier to work less. Yes, it’s easier not to take risks. But the easier road is not our way of life. The easier road is not what’s going to keep us a leader in innovation and advancements.
I had the pleasure of spending a recent Saturday morning with Gov. Mitch Daniels of Indiana and he said to me, “California always led the country; I hope with what’s going on in your state, California will not become the anchor that stops the country.”
Is that what we are going to relegate ourselves to? I think not. And for the sake of our future generations, I hope not.
P. Jacob Yadegar is founder and chief executive of Empyrean Funding, an L.A.-based mortgage company specializing in commercial and residential mortgages.
