One of the things I like about Shirley Svorny is that she tells it as it is. As Professor and Chair of CSUN’s Department of Economics, Shirley pulled no punches when she addressed VICA’s Business Forecast Conference earlier this month. She spoke about the impact of less-than-optimum public policy on our economy and, of course, Los Angeles’ public policy is set by our Mayor, the 15 City Council members who pretty much run their own fiefdoms, and the bureaucrats who (too often) make policy by the manner in which they implement the policies set by those 16 elected officials. How is this for honesty on the part of the Good Professor?: “In most cases, the strategies adopted by the city are poorly thought out and a waste of money.” She gave a number of examples of how the city telegraphs, not too subtly, its willingness to wield its public policy club to over-regulate business, including its prohibition on Wal-Mart Supercenters from locating in city limits; its 2005 law dictating rules of employment for large grocery stores; and the recent, albeit unsuccessful, attempt to require a living wage for employees of hotels located near LAX. She feels that these actions have impacts way beyond the targeted industries; they give other businesses the impression that our City Council is capricious in its policy-setting, picking on specific businesses and industries whenever it wants to. Not a good message to send when you’re in competition with a brace of surrounding cities that hang out a very large and well-lit welcome sign to disaffected Los Angeles businesses. It’s no secret that what Professor Svorny and most other experts think would go a long way toward dealing with the perception (and in this case perception is reality) that we live in one of the nation’s least business-friendly metropolises. “I’d lower business taxes and reform the difficult-to-navigate city bureaucracy that holds businesses up,” said Svorny. “But even simpler the best thing local government can do to promote job creation and prosperity would be to focus on things we need from government police actions to eliminate gangs; road repair; maintenance of the medians and other common property; and at the top of my list, I’d put improving the local public schools.” She points out that a key element of a city’s economic strategy should be protection of its tax base. Using as an example Universal Studios’ plan to develop its property, which is facing opposition from nearby residents, she makes an indisputable point. “If you don’t let developers build new homes and commercial and industrial buildings, all you have are old homes and old commercial and industrial properties, which are less attractive to growing businesses and their employees,” Svorny said. “It’s all well and good to want to maintain the ambiance of a neighborhood, but what are all the costs of doing that? Developers don’t want to have to face long delays in development, costly legal challenges and opposition by neighbors. When we act this way, we might as well say, ‘don’t come here and fix up our aging buildings and neighborhoods.’ There is a real loss associated with these actions.” Can you say NIMBYism? With tongue pressed firmly in cheek, Ye Olde Columnist asks if it’s really possible that our city’s high business tax rates; complicated regulatory requirements and its enforcing bureaucracy; and residents who stymie efforts for residential, industrial, and commercial development, might actually drive corporations and entrepreneurs away. Some of our City Council members have begun to talk the talk; it remains to be seen if they’ll walk the walk. The page one lead article in the Daily News Sept. 21 issue reported that the Mayor and the President of the Council said that they know that successful businesses are a cornerstone of a successful city. Remember those colorful street pole banners that proclaimed “L.A.’s the Place”? I’ve always wondered how many businesses that were considering leaving for Burbank, Glendale, Pasadena, Santa Monica, Culver City, Calabasas, or Santa Clarita, remained in the City of the Angels because of those pole banners. Professor Svorny points out that there are strong indications that new industries might grow and prosper here “if we were to reduce the business tax, facilitate business permitting, and streamline other government regulations. Who knows how many jobs and how much wealth would be created?” Shirley for City Czar, anyone? “The government solution to a problem is usually as bad as the problem.” — Economist Milton Friedman Martin Cooper is President of Cooper Communications, Inc., President of the Los Angeles Quality and Productivity Commission, and a member of the City’s Business Retention and Attraction Task Force. He is the Immediate Past Chairman of VICA, Past President of the Public Relations Society of America-Los Angeles Chapter, and Past President of the Encino Chamber of Commerce. He can be reached at [email protected].