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Competition: The Cruel and the Wonderful

BUSINESS AND POLITICS - Competition is cruel. It unmasks poor performers. On the other hand, competition is wonderful. It reveals those who’ve made good decisions.
If you’re in the private sector, you know all about that. You’ve probably felt the punishment or the reward that results from competition.

But what if you’re in the public sector? There’s little to no competition. We really don’t know who’s doing a poor job. There aren’t even many clues to indicate who’s performing well.

I bring this up because the Los Angeles Area Chamber of Commerce has done something interesting to inject competition into a place without much, the Los Angeles City Hall.

The chamber hired Beacon Economics to make a report showing how businesses are faring in each of the city’s 15 council districts. (The report, presented to the City Council early this month, was underwritten by Southern California Gas Co.) Beacon looked at such things as building permits, business revenues, sales taxes and job growth in each district. And then it lined up the results side by side.

Now we’ve got clues as to who’s performing well, economically speaking. So let’s look at the report and call out names.

Bernard Parks has the fewest businesses in his South Central district, but they enjoyed the greatest growth of receipts last year, 5.6 percent. At the other end of that spectrum, businesses in Paul Krekorian’s East San Fernando Valley district and in Jose Huizar’s East L.A.-Eagle Rock district saw receipts fall by more than 18 percent each.

And retailers in Richard Alarcon’s Northeast Valley district had the greatest percentage increase in sales taxes generated, up 9.1 percent compared with last year.

Sales tax receipts in Huizar’s district declined 6.4 percent – the only district in this category to have a decline.

Now you could argue that this may be interesting, but such competition isn’t fair. After all, City Council members represent voters in local government matters; they don’t have much to do with business activity.

But I’d make a counterargument. The Los Angeles city government has made sure it plays a big role in business life. City Council members have an unusual amount of latitude and power in cutting red tape. On the other hand, if they ignore a business that asks for help, they all but doom it.

Every act by a council member to help or hurt a business has little effect, and those individual acts build up and build up and eventually show up in the broad numbers – numbers that are now revealed.
Let’s get back to some of those revealing numbers and look at the most important category: job growth.

This is easy. Parks wins. His district grew jobs 9.1 percent last year, the second-fastest of all districts; the year before it was the only district to see an increase, and his was the only district to have job growth in each year from 2005-2010. This despite the fact that his district is among the most economically challenged.

On the other end we have Ed Reyes, the loser. His district north and west of downtown, saw jobs decline by 2.8 percent last year, the worst of all. And his district has generally underperformed in this important category since 2005.

In an article in the Oct. 10 issue of the Los Angeles Business Journal, Reyes said his district has “continued to feel the impact of the exodus of manufacturers” and they’ve left behind brownfields that take time and money to turn around.

Maybe so. But that sounds like an excuse. When you’re in a competition for economic development – which he is now, thanks to the chamber and Beacon – you’re like a baseball manager or football coach: you’re competing against your colleagues. No one wants to hear a bunch of reasons why you keep failing. They want to hear your plan for success.

This report, which is to be done every year, means council members are now in competition with each other. Parks can – he should – point out his accomplishments in any future election. He should be rewarded for his good decisions. Reyes and Huizar can – and probably should – be attacked by opponents for economic underperformance.

That’s cruel, yes. But it’s so wonderful.

(Charles Crumpley is the editor of the Los Angeles Business Journal. This column was posted first at foxandhoundsdaily.com) -cw

Tags: competition, Los Angeles Chamber of Commerce, LA Chamber, Beacon Economics, Bernard Parks, Richard Alarcon, Paul Krekorian, City Council





CityWatch
Vol 9 Issue 86
Pub: Oct 28, 2011

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