The fall of Los Angeles The ‘progressive’ elites have run the city of the future into the dirt.
By Joel Kotkin
Posted By Ruth King
For much of the 20th century, Los Angeles symbolized the future. Over the course of the century, the population grew 40-fold to nearly four million people.
But now, for the first time in its history, the population of Los Angeles is in decline, falling by 204,000 between July 2020 and July 2021. LA was once a magnet for investors. But recently many of the area’s corporate linchpins – including aerospace giant Northrop Grumman, Occidental Petroleum and Hilton Hotels – have left, taking with them high-paying jobs and philanthropic resources.
Worse still, conditions in LA today are bordering on the medieval. Anyone visiting some of the most famous districts of urban Los Angeles – notably downtown, Hollywood and Venice Beach – sees clear signs of destitution, including sprawling homeless encampments, vast numbers of people living in vehicles and rampant crime. Last year, a UN official compared conditions on LA’s Skid Row, a poor downtown neighbourhood, to those of Syrian refugee camps. Smash-and-grab thefts at local 7-Elevens and the persistent theft of goods from railyards suggest this is a city that has lost control to the modern version of lawless highwaymen.
So-called progressives have long dreamed of transforming the famously sprawled Los Angeles into a dense, transit-oriented, sun-kissed version of New York. But despite massive corporate and government investment, attempts to do this have failed. Rather than a vibrant hipster paradise, LA’s urban core is dominated by the homeless, the poor, government workers and a few creative types – making for an odd juxtaposition of homeless camps and low-rent hotels alongside high-end restaurants and artists’ lofts. Meanwhile, newly built luxury apartments have suffered vacancy rates as high as 14 per cent – remarkable in a city so short of housing.
Unsurprisingly, some Angelenos have sought to reverse this disastrous course. Earlier this year, disgruntled residents united around property developer Rick Caruso in his insurgent campaign to become mayor of Los Angeles. Caruso spent over $24million of his own money on the first round of the election in June.
Caruso is the grandson of Italian immigrants, whose father founded the successful LA business, Dollar Rent a Car. And he has himself been a big player in California for years. His real-estate business, founded in 1987, is now worth more than $4 billion. Caruso has built shopping centres all over the metropolitan area, from the iconic Farmer’s Market and middle-class San Fernando Valley to the swanky Pacific Palisades. Yet Caruso’s mayoral bid appears to have stalled against the well-organised might of the city’s public-employee-driven political machine.
This is a powerful machine. Last month, a grassroots movement opposing progressive criminal-justice reform lost its attempt to recall district attorney George Gascón, who has been widely blamed for LA’s lax approach to crime. Recall proponents needed 566,857 signatures, but despite collecting 715,000, only about 520,000 turned out to be valid. Thanks to the machine’s backing, Gascón’s recall bid failed, even though the city last year experienced 397 murders – up 11.8 per cent from the 355 the previous year, and a 53.9 per cent increase from the 258 in the pre-pandemic year of 2019.
Meanwhile, Caruso’s opponent in the second round of the election in November, Congressperson Karen Bass, is currently ahead by double figures (roughly a quarter of the electorate is still undecided). Like many in California’s ruling political elite, Bass comes from the far left. In the 1970s, she travelled to Cuba with the Venceremos Brigade, an international group of sympathisers with Cuban communism. In 2016, when Fidel Castro died, she issued a praise-filled obituary to ‘El Comandante’. More recently Bass has distanced herself from this Castroite past and from policies such as defunding the police. But she can certainly be expected to follow the ‘progressive’ policy agenda typically backed by the city’s public-sector unions.
Los Angeles remains too vital a city to write off entirely. But many things that made LA the premier urban growth centre of the past century are clearly eroding. A city once known for its efficient, at times brutal administration appears unable to curb its most pressing problems, especially homelessness. Despite massive expenditures, the city’s streets teem with more than 60,000 homeless residents, including 2,000 along upmarket Venice Beach. In their desperation, the city has proposed legislation that would force hotel owners to surrender spare rooms to the homeless – just the sort of thing that visiting tourists will surely appreciate.
The economy has also stagnated. LA was once the country’s most dynamic manufacturing area. But in the past decade it has lost roughly 13 per cent of its industrial jobs – only New York has fared worse among major regions. In business and in professional services, the largest high-wage sector, Los Angeles lags behind not only the San Francisco Bay Area, but also cities like Austin, Nashville, Phoenix and Denver. According to Chapman Business School professor Marshall Toplansky, even the strongest parts of the LA economy, like entertainment, are slowly declining, as companies seek cheaper and safer locales. Even the city’s port is in decline, the last stronghold of blue-collar labour, with jobs gradually leaving the West Coast for ports like Houston and Tampa.
LA still has a grassroots entrepreneurial economy, as is evident in the many small shops and restaurants that fill its mini malls. Many of these are owned and run by immigrants. But 40 per cent of the jobs in Los Angeles County – of which the city constitutes roughly half – pay under $40,000. As Toplansky notes, in a high-cost city like LA, this represents a poverty wage. LA’s rate of working poverty is far higher than in San Francisco’s Bay Area and in neighbouring Orange County.
LA’s ‘progressive’ leaders talk endlessly about social justice, but the results of their policies have been less than inspiring. South LA, site of two of the most devastating riots in American history in 1992, is now poorer in relation to the rest of the city than before those upheavals, partly because of rapid deindustrialisation. In a Los Angeles where almost half of the workforce is low-skilled, there are few opportunities for the poorest to improve their conditions as higher-paid blue-collar jobs disappear.
Critically, the city is also losing its appeal to families and the young. Over the past 20 years, Los Angeles County has lost nearly 700,000 people under 25 – the biggest per capita decline in youth among all large US counties. In contrast, its elderly population has surged by 500,000. The Los Angeles Unified School District, which is mostly inside the city boundaries, has lost over 40 per cent of its student body in just 20 years. Even immigrants, who have restored much of the city’s vitality in the past few decades, are no longer coming. Between the 2010 and 2020 censuses, the number of foreign-born residents in Los Angeles County fell.
Veteran GOP pollster and strategist Arnold Steinberg tells me that these economic and demographic trends present major barriers to any reform movement. Today’s LA is far less middle class than it was when Steinberg helped Republican Richard Riordan become mayor in 1993. It is also more heavily minority and older. ‘The game board has totally changed’, Steinberg says. ‘Dick was able to use a Republican base and capture a lot more middle-of-the-road suburban voters.’ Steinberg does not even expect the November mayoral election to be close.
As the GOP has all but collapsed, the progressive political machine has only got stronger. As leftist writer Harold Meyerson observed years ago, much of LA’s remaining middle class is made up of teachers and other public employees. These, with the exception of the police and certain construction unions, provide the bulwark of Karen Bass’s support. And this public-sector establishment can mobilise a get-out-the-vote machine that should not be underestimated.
According to Gloria Romero, a former state senator from east Los Angeles, this public-sector political machine has filled the vacuum left behind by weakened neighbourhoods, a decline in local churches and the loosening of family ties. At the same time, turnouts for city elections have been dropping consistently, reaching only 14 per cent in the primary back in June. Meanwhile, practices like ‘ballot harvesting’, which allows campaign workers to gather ballots at nursing homes and other facilities with little supervision, make progressives all but unbeatable. This proved critical in the first round, as Bass, behind in the early results, ended up with a five-point lead after the late ballots were counted, which included those from harvesters.
To be sure, given his financial resources, Caruso could still mount a comeback. But his campaign is directed almost entirely by professional Democratic campaign consultants, whose focus seems to be on winning over moderate to liberal Democrats. With Democrats in Los Angeles outnumbering Republicans more than four to one (double the two-to-one ratio that held when the city elected Riordan), this seems a natural strategy.
But recent events mean that looking for help from LA’s remaining bourgeoisie could be unwise. These voters tend to be traumatised by Trump and the Supreme Court abortion ruling. They fear the country is about to be overrun by far-right nationalists. They tend to get their news from the increasingly strident, ultra-progressive Los Angeles Times, which has endorsed Bass and has attacked Caruso for, among other things, lacking a ‘climate plan’.
Bass appears to be making inroads in places like the San Fernando Valley, a suburban-like expanse north of downtown, which was once a Riordan stronghold. It is also home to much of Hollywood’s working population. Overall Hollywood, the supreme centre of gentry progressivism, has weighed in largely in Bass’s favour, seeing her as an ideological fellow traveller. For instance, Dreamworks’ Jeffrey Katzenberg has given Bass $850,000 and has attacked Caruso for having long been a Republican (he registered as a Democrat in January).
This success is somewhat understandable since most leftist liberals live in the city’s bucolic enclaves, far from the camps or the smash-and-grab events that other Angelenos endure daily. When crime does emerge in the wealthiest enclaves, the well-heeled celebrities enlist private security firms. LA may be dysfunctional for most, but it still works for the ultra-affluent.
So Caruso’s opportunity may lie elsewhere. Much as Riordan did in 1993, he needs to tap into mass disenchantment. According to a 2021 USC survey, 10 per cent of Los Angelenos plan to move out in the near future. Younger Angelenos, according to one UCLA survey, are more dissatisfied with living conditions in the city than the older population. Caruso’s internal polling also shows that two out of every three residents believe that the city is in decline.
Romero tells me that Caruso should, instead of focusing on ‘white liberals’, place his bets on the Latino community, which makes up roughly half of the LA population and one-third of its electorate. Latinos already constitute a far larger population than Bass’s African-American base. As demographer Wendell Cox notes, since 2000, LA’s black population has dropped by 80,000, shrinking from 11 to eight per cent of the population. South Los Angeles is now majority Latino. Today, Asians and Hispanics together constitute over 60 per cent of residents.
Romero points out that many Latinos and Asians are uncomfortable with the Black Lives Matter agenda espoused by Bass and most Democrats. After all, Latinos now constitute over one-third of the LAPD. Many Latinos and Asians also own or work in the kinds of small businesses that have been targeted by a coddled criminal class.
This means, Romero suggests, that Caruso will need to build a strong grassroots organisation to challenge the public-employee-led machine. He has to spend more time at churches, community gatherings and festivals, in areas that suffer most from progressive excess, which he now shows signs of doing. ‘This is where the opportunity is, but you have to do street politics’, she tells me. ‘Caruso has to get his hands dirty to win.’
Yet right now it seems unlikely that Caruso can overcome the progressive tide. Besides the mayoral race, progressives seem poised to make the city council even more left-wing, placing as many as five members of the Democratic Socialists of America on the 15-member board, which already comprises 14 Democrats and one independent.
Far-left politics is about the last thing LA needs. With the rise of remote work, and the shift of business to Texas, Arizona, Nevada and other states, the ability of LA to keep, much less lure, residents and businesses requires a shift towards the pragmatic middle.
Great weather is, well, great – but it’s not enough to build a thriving metropolitan economy or a successful big city. Under current circumstances, it is difficult to see how the city will be able to repeat the success of its 1984 Olympics in 2028.
Unless there is a political sea change, the prospects for LA, like many American cities, are far from bright. Yet they are also far from hopeless. A strong grassroots effort together with business leadership could still turn things around. But if LA and other cities shift further left, or at least what passes for the left these days, the prospects of this happening are beginning to look bleak.
Joel Kotkin is a spiked columnist, the presidential fellow in urban futures at Chapman University and executive director of the Urban Reform Institute. His latest book, The Coming of Neo-Feudalism, is out now. Follow him on Twitter: @joelkotkin
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More patronizing China because of Hunter and his family's financial ties?
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Ross Rants:
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There is an old saying in Wall St, don't fight the Fed. Powell and others could not be more clear, they are raising rates a lot more well into 2023. This time will be 75, and might even be 1.0%, but not likely. There could be another 75 in October, but possibly only 50, with another 25 in November and on into 2023 until FF hits close to 5% and unemployment is at 6%. . Pay attention to what the Fed is saying, not what various pundits claim. I believe the recent Goldman Sachs forecast of no recession, no inflation problem, and the economy rebounding soon, is wrong in many aspects. Inflation will likely be down in this next report, but food, rent, and services are up, as are wages up over 5%, so don't believe the pundits who say inflation is over. It is not. Wheat and corn continue in short supply, and oil is already headed back up. The Saudis and OPEC have a $90 floor under Brent. That is a floor, not a set price. It is over 92 today. Mortgage rates are up around 6%, and may likely go higher. Although some prices have eased, a lot have not. Gas prices are a main driver and are down due to consumers cutting back on driving due to price, and they will likely go back up from here, unless demand drops a lot more. Heating oil, which will become a major issue very soon, is over $5 a gallon. Diesel is still very high. Don't believe the talk that inflation is over and the Fed is going to stop raising very soon, and will be cutting soon. If that happens we are in a deep, not a mild recession. Larry Summers agrees Fed funds will reach 4%-5% before they stop. If you doubt this, traders bought a near record number of puts last week, and the most since 2008. This means they believe the market will decline from here. If you still have doubt, state tax receipts are down suggesting a slowing economy on a broad front.
There are some things that suggest inflation may have topped out, and will be lower this month. Freight rates are down 20%-30%, pricing power by retail is diminishing, oil is down and home prices are now declining . All these are down from record highs, so just being down does not mean they are back to low levels and inflation will be nearing 2% next year. Worrisome issues: the yen is down considerably meaning their economy is slowing, the ECB is putting on a series of large raises, the last being 75 with more to come, energy prices in the EU are driving that group into recession, and maybe a serious downturn, and China is continuing to have lockdowns and a declining economy, potentially into recession. Summary, the whole world is headed into recession. With the dollar remaining high, international US companies will have lower earnings.
There is a risk that we could have another world financial crisis, not so bad as 2008, but maybe a crisis. The Europeans are putting on massive subsidies to cap energy costs for citizens and business. This is hundreds of billions more debt for the UK and EU which they cannot afford as rates rise. Other nations are having to have increasing subsidies to cover the cost of food and energy. The US is spending irresponsibly with these latest Dem spending bills. China might be headed to recession, or near recession. Russia is in serious economic problems the longer the war continues. Many emerging and less developed nations borrowed irresponsibly from China as part of the Belt & Road program. As predicted, many are now in serious financial trouble. Up to now China has not done anything other than loan modification to deal with the crisis. They have not worked with the IMF nor other creditors to try get these economies back on a road to solvency. The whole world, including the Biden administration, is now running up sovereign debt it has no way to pay for. We cannot know when or where the blow up will come, but it is likely to happen, and it is likely to be sovereign debt, not the stock or US bond market.
Look at the recent pop up in stocks as an opportunity to sell some more. It is most likely another bear bounce, and we will head back down even further. Many smart investors now believe we are going to go to 3400 with a real chance it will be 3000 before we hit bottom. There are so many bad things happening in addition to rising rates, or about to happen, that the market is going back down. Earnings will disappoint for Q3. Housing is now in decline. Prices dropped .77% in July, the worst drop since 2011 and second worst since 1991. More declines to come. With rates now at 6%, mortgages debt serviced is now 35% of income, and real income is declining by 3.5%. Home prices were in a major bubble, and the bubble has burst. The good news is there is low inventory and homebuilders have cut back, so prices will not drop like in 2009. When housing is in trouble, the economy is in trouble. However, due to the shortage and cost of homes, there will not be a major collapse. Rents are still going up, and were up 15.7% last twelve months. Occupancy is around 97% which means rents stay high.
GM and some other car companies are going all EV by 2035. Toyota, the largest and most successful car company in the world, is not even headed there. They are not rushing to build EVs. They have a much more realistic view of the EV market. There are a large number of battery plants being built now in the US. Here is reality. There are only 2% of cars now are EV. To manufacture all of the batteries required for the numbers of EVs bandied about, to be a lot larger numbers means an enormous increase in mining of lithium and several other raw materials that are not easily produced. A lot of new mines will be needed, and just try to get any new mine approved in the Biden EPA. Not happening. There is simply no way the forecasts of EV production are going to happen, nor will that much demand be there. GM is taking a huge risk that Toyota and Honda are completely avoiding. Most of the raw materials needed for EV's now come from China. Suppose there is a major confrontation with China over the next few years and they cut off shipments of lithium and other raw materials. It will make the current chip shortage look easy. Then we get to the grid. Just look at what happened in CA. No more fossil fuel cars, but do not charge your EV at night as we don't have power capacity. That is just a classic warning of what will happen, especially if the push to convert power generation over to wind and solar. They learned nothing from the UK rush to renewables. That nation is ruined by that effort and has now gone back to fracking to try to save their economy. Toyota thinks the rush to EV is nuts, although they are too polite to simply say that. A recent analysis of Tesla was scathing as it talks about the poor quality and maintenance issues. The love affair for Tesla cars is waning. Then there is the issue of all those charging stations needed, and how does that work in dense urban areas where there is no place for charging cars to wait until the battery is charged. And where do you put sufficient numbers of chargers in a dense urban setting where there are no, or few gas stations. Lastly, who is paying for every home to get a special charging station in their garage or driveway. Who is paying for all the gas stations to install all these chargers. I guess you are as a taxpayer, or it will be in the price of your new EV so the car company can install them. The whole rush to EV is insane, and not thought out.
The research on the actual total impact of EV's has shown that if all of the goals worldwide are achieved, then by 2100 the net reduction in CO2 will be 0.0002 F degrees. What the climate religious freaks never want to discuss is how much pollution is created by mining and manufacturing the car. Then how much particulate particles are released by operating the car where the battery is made up of polluting minerals. Lastly, it will take 28 times as much lithium to meet the production goals. That requires new mining and massive new demand for these minerals already in short supply and coming mostly from China, which will drive up the cost of producing the batteries. This ignores the massive new demand for copper, cobalt, etc. which are already in short supply. The cost of the car will have to go up a lot. The whole EV rush is a massive scam. We are being mislead about the real costs over the next decade which are huge , and real net climate impact which is net negligible. If it was so great, why are nations and CA issuing mandates to buy when they know the free market will not buy them in volume. Why am I spending my tax dollars on a subsidy so you can buy a car, and so subsidize the car manufacturers to produce a product that is too expensive, and most people do not want to buy. Then there is the fact that China controls most of the production of lithium and other key minerals. If China gets pissed off one day, they can shut down auto manufacturing in the US vs we were energy independent under Trump, and nobody could threaten us. Now we no longer even have the oil reserve which Biden has drained. That is insanity in the green new world, tied in with election politics, and total disregard for national security.
The entire of the US government is now obsessed with getting rid of fossil fuels to the point that it is creating a future economic disaster just like the UK. Pipelines are not getting built, so energy will be in short supply. The permitting they promised to Manchin is not happening. They conned him, and he was stupid enough to believe Schumer and Bill Gates. Power plants are getting shut with no replacement. Oil and gas production is getting stymied. Reality is, oil and gas will be needed for decades. Clearly the Dems and the universities seem to be living on some other planet. This is where ideology in universities is doing grave damage, and must be reversed. They are turning out a generation of misinformed and uneducated as to energy. Larry Fink and the people at Vanguard who vote your shares are pursuing this mantra to the severe detriment of the nation. Chevron's board finally stood up and said we don't care what Blackrock, Vanguard and State St voted for, we are doing what is right for the shareholders and the nation. Many more boards and CEOs need to do the same.
Even if there is a deal with Iran, and all the oil they have sitting in tankers off Singapore and elsewhere, and in tanks is suddenly released, it will just be a short term bump down in oil prices until that oil is absorbed. Some oil experts believe some of that oil is already owned by end users and might have been drawn down. The big thing is the US oil reserve has now been drawn down to nil. It has to be refilled after the November election which was the real reason it was drawn down. One giant hurricane and the US is in real trouble until it is refilled. All Biden cares about is the midterms and not national security.
Very good news on the cancel culture front. Oberlin was finally forced to pay the bakery $35 million for trying to cancel the bakery's business. Universities should take note. The Amy Wax case is proceeding nicely. Just to reiterate, her case is not about her, it is about free speech and the right, not just of professors, but for all of us to say what we want to say, even if the mob may not approve. We need to win this case, and to push hard to stop the cancel culture and the dangerous ideology on campus that freezes out clear thought.
There is no way to know yet, but the supposed counter attack to recapture Kherson may have been the second greatest head fake of all time in war, comparable to the Allied fake attack from the Med to draw Germans away from Normandy. The Ukrainians went all out to make it seem they were investing everything in that Kherson attack, when in fact they were really intending to attack in the north and cut off the main Russian supply routes into Donbas, which it seems they are succeeding in doing, at the same time they have cut the supply lines to Kherson. We will have to see what happens in the next week, or two, but if the Ukrainians can continue to press the attack in the north and recapture large pieces of territory including the rail and road hubs, then the Russians will have to try to move troops north, opening up Kherson for the next wave of Ukrainian attack. If this is the plan, then Ukraine can bombard the Russian trains trying to shift troops and attack the roads going north, and kill a lot of Russians. This is all surmise on my part, but it sure looks like that is what is happening. If NATO gives the Ukrainians attack helicopters, they can wipe out a big chunk of the Russian army while it is trying to move in convoy. There are some who say Ukraine is losing, and Zelensky will be replaced, but I am not buying that scenario.
If we go back in history, it almost never works to try to assume appeasement will modify the behavior of bad actors. Just go back to a few in modern times. Chamberlain with Hitler, Biden with the Taliban and with Putin, letting China into WTO, buying almost all German energy from Russia, the Obama Iran nuke deal. There are many more. There is no substitute for military strength, and clear willingness to use it, to keep the peace. Trump walked out of lunch with Kim, and Kim did nothing bad for years. To Putin. or the Mullahs, weakness is just a reason to do more bad things to see how far you can push it.
Sweden was heavily criticized for keeping schools open the entire time. Now the results are in. Swedish kids lost no learning, and had no real adverse medial issues. American kids got destroyed thanks to the teachers unions keeping schools closed. That is the fact. American kids can never make up the lost learning, so a whole generation is ruined and so it the nation. All due to the teachers union and Fauci. They both should be charged with child endangerment and abuse.
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In pursuit of nailing Trump to the wall
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The intel review of documents at Trump's estate, what's known and what's expected
The discovery of hundreds of classified records at Donald Trump's home has thrust U.S. intelligence agencies into a familiar and uncomfortable...
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