Californians Look to White House For Help in Harsh Economic Times
AS the rest of the nation makes a stronger rebound from recession, California is still toughing it out through one of the harshest times in the state's economic history and anxiously awaiting Washington's help.
The clearest barometer of California's troubles is a persistently high jobless rate, which registered 8.6 percent in November, far worse than the 6.4 percent national average.
After a steady four years of military base closures, defense cutbacks, atrophy in the aerospace industry, a poor real-estate market, and a toll of 700,000 layoffs, many state government and business leaders are disappointed in the federal response.
Expectations were raised earlier this year when, in a high-profile demonstration of his attention to California, President Clinton appointed Commerce Secretary Ron Brown to head the California Task Force to assess the needs and direct federal spending to the nation's largest state.
``You can't very well declare economic recovery in America until you turn the California economy around,'' Mr. Brown says.
Administration officials take credit for pushing it into the next gear, by extending federal grants for the state's transportation, housing, defense conversion, and environmental sectors. Easing export controls on computers and other high-technology products will generate billions of dollars for California firms, they say.
But California Gov. Pete Wilson (R), perhaps the state's loudest critic of the federal government, says the task force has been little more than a public relations tool.
He blames White House economic policies for prolonging the state's misery and its drag on the United States economy. He blasts Mr. Clinton for pushing higher income and energy taxes and fast-forwarding military budget reductions that impose a disproportionate burden on California.
White House officials dismiss such comments as the ravings of a Republican politician seeking reelection in 1994. Others insist that the claims have merit.
``It may sound partisan on the surface, but a lot of what we're looking at is dollars and cents,'' says California Secretary of Trade and Commerce Julie Wright, who echoes comments from the local business community. ``The administration has done a masterful job in staging events to talk about what they are doing, but so much of what has hit the state has resulted from [damaging] federal decisions.''
For example, she says, ``We have fundamental philosophical differences with a president who passed the largest tax increase in history and assumes that it's going to stimulate a vibrant economic climate.''
Because of an inadequate federal immigration policy, she adds, the state is straining under exorbitant costs of housing and providing welfare services for the influx of illegal aliens. Other ``fiscal issues are still pending, like mandated health care,'' she says, which threaten to exact high costs from the small- and mid-sized companies that have created what little job growth California has had in recent years.
A fresh perspective on what may seem like constant Californian frustrations and feuds with Washington is a new, soon-to-be-published report by the bipartisan California Economic Strategies Work Group. It calls on federal planners to make more use of local talent and resources.
Brown's task force, which issues directives from a top-down interagency group that includes only two Californians, fails to connect with grass-roots organizers whose work is essential to the state's repair, says Tapan Munroe, chairman of the work group and chief economist of Pacific Gas and Electric.
``They must involve business leaders, academics, nonprofits, and economic development experts - the key players in the state,'' he says.
Ms. Wright worries about political obstacles to access. ``The Clinton administration really needs to be bipartisan in forging partnerships. I would like to see an environment in which we sit down on a regular basis [and develop measures] to encourage sound investment and growth here. California is a $750 billion economy, and the federal government needs to look at the implications of its actions,'' he says.
Commerce Undersecretary for International Trade Jeffrey Garten says an aggressive export policy will ensure that the de-fense-related industrial downturn affecting California will be offset by more robust industries such as environmental and bio-technologies, semiconductors, telecommunications, entertainment, and space commercialization.
Almost all of these are the ``future-oriented high-tech industries'' that will give American companies an edge over their foreign competitors, he adds.
Mr. Munroe agrees, but he says that so far Washington focuses too much on ``high-tech, high-wage jobs'' - a Clinton rallying cry - ``and not enough on California's real need to ``create jobs throughout all wage levels.''