Newspaper article The Christian Science Monitor

How to Revive California Bank of America Economist Calls for a Better Business Environment

Newspaper article The Christian Science Monitor

How to Revive California Bank of America Economist Calls for a Better Business Environment

Article excerpt

ONE in six of the nation's jobless now live in California.

In the last 30 months almost 900,000 jobs have been lost, pushing the state's unemployment rate to 9.5 percent. California "is now in the midst of its deepest downturn since the Great Depression," said Democratic state Assembly Speaker Willie Brown, chief organizer of a California Economic Summit this week in Los Angeles. Hardest hit are the defense, banking, and commercial real estate sectors.

One of the conference participants, John Wilson, chief economist of the Bank of America, the nation's second-largest bank, spoke with the Monitor last week in his office here about the state's problems and prospects. Excerpts follow:

Is Clinton's economic stimulus package going to provide enough of a push to get California's economy moving?

To think that a United States recovery is going to spill over into California and bail us out of our problems doesn't recognize their complexity. California is suffering from the national recession, major structural change in our basic industries, and a whole series of what you might call "management of resources" problems. These range from government regulations to workmen's compensation problems.

How did California come to be perceived as having a hostile or arrogant attitude toward business?

We've done a bad job managing our political resources: We don't need any more voucher fiascos. {State employees got IOUs when lawmakers failed to agree on a budget.} We don't need a state that can't get a budget out.... We were able to ride through the '80s and not really deal with our fundamental problems. Certainly that view is gone.

About one-third of America's immigrants are arriving in California. What kind of strains does that cause?

Rising immigration has put pressure on education, the welfare system, and the transportation system. In the 1960s, California created one job for each two {arriving immigrants}. In the 1970s, we were adding a job for every 1.3 people. From 1980 to 1988, we were back to a job created for every two added people. But from 1988 to 1992 we have been overwhelmed. …

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