VALLEY BUCKS DOWNWARD TREND
By CHARLES F. BOSTWICK
Valley Press Managing Editor
LANCASTER – Some 700 local businesspeople and civic leaders were told Friday that California has entered a recession but the Antelope Valley is part of the area in which the state’s future population and economic growth will be focused.
Actor-author Ben Stein does his job as keynote speaker at Friday’s 2008 Antelope Valley Board of Trade Business Outlook Conference at the AV Fairgrounds in Lancaster. RON SIDDLE/Valley Press.
The audience at the Antelope Valley Board of Trade’s Business Outlook Conference heard from speakers like author, economist and television host Ben Stein, who said the American economy is stronger than newspapers, magazines and TV news shows portray it, and economist Chris Thornberg, who said the California economy is in a recession that will last into next year.
“The economy is always about trends and bends,” Thornberg said. “Draw a line from Antelope Valley to Sacramento. That is the new California. This is where growth is going to occur in the long run.”
The six-hour-long conference, which filled the Poppy Pavilion at the Antelope Valley Fairgrounds, also featured the announcement of Coldwell Banker A Hartwig Company owner-president Burl Patterson as the 2008 Antelope Valley Businessperson of the Year.
Speakers included Antelope Valley’s representatives in Sacramento and Washington, three local aerospace workers, a top official at Edwards Air Force Base and businessmen talking about Lancaster and Palmdale programs.
Thornberg, a former senior economist with the University of California, Los Angeles Anderson Forecast team, said he expects the U.S. economy to slide into a recession that is worse than in 2001 or 1991, but not as bad as 1983. The recession, he said, is being caused by the end of a real estate “bubble” in which buyers were willing to pay irrational prices for homes.
In Los Angeles County, he noted, the median home price shot up from $177,000 in 1999 to $550,000 in 2007, and predicted that prices statewide will drop 35% to 40% from their peak. The loss of home value is reducing people’s spending, he added: nationally, about 8% of consumer spending had been financed by taking out home equity loans.
“This is a housing-led consumer spending pullback that is causing problems across the California economy,” he said.
The downtown’s result, however, will be “a California where housing becomes affordable again,” Thornberg said. It also will provide investors with opportunities to buy distressed properties and businesses, he said. “Expansions are about growth. Recessions are about market share. This is the year for focusing on market share.”
State Employment Development Department labor expert Brad Kemp told the audience that the Antelope Valley, unlike the rest of Los Angeles County, gained manufacturing jobs between 2001 and 2006. Employment in the Antelope Valley increased 23.6% from 2001 to 2006, going from 77,500 to nearly 95,900, with manufacturing accounting for a quarter of the gain, Kemp said. Payroll grew 50.1%.
Manufacturing was the fastest growing employment sector, jumping 74.1% in the six years to nearly 10,900 jobs, he said. Between 2001 and 2006, the Antelope Valley added 2,459 jobs in computer and electronics manufacturing and 2,076 jobs in transportation equipment manufacturing, he said. “You guys are working in many ways opposite to the rest of the nation, and that’s good news,” Kemp said. He added: “I think Antelope Valley has long-term growth ahead of it – long, long term.”
Greater Antelope Valley Economic Alliance committee chairwoman June Burcham said drawing in new manufacturers and other businesses offering good-paying jobs is one of the alliance’s goals, aimed at reducing the 60,000-plus commuters who drive out of the Valley for work. “Nobody wants to be on the freeway all their life,” Burcham said. “We have a lot of factors in the Antelope Valley that are encouraging … other businesses to move here.”
Other speakers included U.S. Rep. Kevin McCarthy, R-Bakersfield, who said walking up the timeworn steps of the U.S. Capitol reminded him of the challenges the United States has overcome in its history. “The strength of America is that we learn from our mistakes and we reward risk and hard work,” he said.
Husband-and-wife Lancaster Republican lawmakers Assemblywoman Sharon Runner and state Senator George Runner said they foresee attempts by state officials to raise taxes. They said Republican legislators will oppose the move. “We will be holding out probably all summer not to tax you any more in California,” Runner said.
Los Angeles County Supervisor Michael D. Antonovich said he was impressed by Valley residents’ volunteerism and willingness to help each other. “You have the spirit here that I grew up with in Los Angeles,” Antonovich said.
North Star Destination Strategies CEO Don McEachern, whose firm created Lancaster’s new “It’s Positively Clear” campaign, talked about the origins and meaning of the city’s “branding” effort. “Your brand is what people say about you when you’re not around,” he said. “Community branding is about combining culture and commerce for prosperity.”
Keynote speaker Stein, a speechwriter for presidents Richard M. Nixon and Gerald R. Ford who is now best known for television and movie appearances, told the audience Americans should be grateful to live in this country. He said the American economy is stronger than portrayed right now, but he is disturbed about trends in American society – including spreading disintegration of family life, denigration of education by young people and a “something for nothing” mentality reflected in the subprime mortgage crisis as well as in the federal budget deficit.
While he said the subprime mortgage crisis doesn’t involve enough money to hurt the U.S. economy severely, it is big enough to generate news stories and to scare lenders, he said.
“The banks and other lenders are scared to lend because they’re afraid their next loan will be a disaster,” he said, adding that the Federal Reserve must step in and guarantee the survival of banks.
With its tax breaks, long-term prospects and avoidance of rent, homeownership remains a good investment, Stein said. “This is a perfect time to buy. Buy when the blood is in the streets and everybody is in a state of despair,” he said.
But Stein said he is worried about other trends in American society: The approaching retirement of 78 million baby boomers, many of whom have scant savings or retirement plans. The tremendous cost of Medicare program, even without any expansion. A growing trade deficit, fueled by oil imports that only will grow more expensive as the dollar declines in value. Income inequality, which Stein said has made the income of the 300,000 richest Americans equal to that of the bottom 200 million. A culture in which many young Americans consider education irrelevant, unattainable or uncool.
As host of the cable television game show “America’s Most Smartest Model,” Stein said he talked to two rejected contestants, purportedly college students, who didn’t know that Franklin Roosevelt was president in 1944, the year Stein was born; the name of the war America was fighting then; what nations America was fighting in that war; or that the United States defeated Japan.
But Stein also said he is very grateful to be an American, calling the United States the first and only large, multicultural industrialized democracy, which since he was a boy has made great strides in lessening discrimination based on race and religion. “We need to be united in gratitude of being Americans every moment of every day. This is the best place there’s ever been in the history of the world,” he said, drawing applause.
American freedoms, he added, are the work of American military personnel. He said he often visits wounded soldiers at the Army’s Walter Reed Medical Center and also visits Arlington National Cemetery, whose graves include that of his father-in-law, a career Army officer who won Silver Stars for heroism during World War II and Vietnam. The wounded Walter Reed patients, many of them amputees, are “magnificent,” Stein said. “If you think America is finished, if you think America is in it decline, just spend a day with these people,” Stein said. “You will change your mind pretty damn quick.”
