File Joel Kotkin’s article in Newsweek, “How Los Angeles Descended Into Neo-Feudalism—and How to Fix It” under “asking a question but not really answering it”. This appears to be the closest he comes to telling us how it happened:
For much of the 20th Century, Los Angeles was led by aggressive business leaders. Many were self-made, often somewhat nasty moguls, men like Jack Warner, Walt Disney, Lew Wasserman, Mark Taper, Howard Ahmanson Sr, Donald Douglas, Jerry Buss. They faced derision from eastern elites but they didn’t care; they consistently pushed for all the things that made for L.A.’s ascendency, from roads and bridges to arts institutions and glittering office parks to housing tracts.
Today there are few such figures. Once a beacon for up-and-coming companies, L.A.’s corporate community is diminishing, and the person who had the most potential, Elon Musk, recently announced his departure for Texas. Southern California is home to just 19 Fortune 500 companies today, equal to Denver and Seattle and roughly half the number in the Bay Area, Dallas and Houston, not to mention New York and Chicago. This year, a long time corporate power, the real estate firm CBRE, decided to move from its downtown L.A. office to Dallas.
and
At root of this neo-feudal reality is an economy that no longer provides much opportunity for most residents. Over the past decade, according to research by Chapman University’s Marshall Toplansky, the vast majority of L.A.’s new jobs in the area paid below the median income, many of them under $40,000. In contrast, creation of high wage positions has lagged the national average.
while here’s his prescription for fixing it:
The most important solution to the city’s dystopic class divides is also the most obvious: creating more middle class and good blue-collar jobs for Angelinos and prospective newcomers. Green pietism, curbs on the enforcement of non-violent crime, density policies to peripheral growth as well as the massive spending on transit may sound good to the media claque, but they undermine the very fluidity and sense of personal freedom that made L.A., well, L.A.
To revive, L.A. must change direction. Pouring more money into transit, where $20 billion in spending has resulted in a smaller share of commuters than thirty years ago, is far less important than more prosaic things like fixing roads, filling potholes, enhancing telecommuting, reducing crime and working on new, innovative transportation like autonomous taxis.
which I find pretty superficial. It’s actually another way of saying that Los Angeles will continue its descent into “neo-feudalism”. Why?
First, how could it be otherwise with the city and county importing a landless peasantry as fast as it can? Digging even deeper here is Los Angeles’s employment by economic sector:
Government and its handmaiden industries, healthcare and education, account for 30% of employment and incomes in those sectors are both higher than the median. Incomes in other leading sectors, leisure and hospitality and retail, are far below that. Manufacturing and natural resources, e.g. oil, have been declining in Los Angeles for fifty years.
Seventy years ago it was a lot different. Los Angeles was the most important agricultural county in the U. S. and oil was a much more important component of LA’s economy. Manufacturing, particularly aerospace was growing rapidly.
Suffice it to say that all of Los Angeles’s advantages he lists
L.A. still has great assets—lovely neighborhoods, the nation’s dominant port, Hollywood and legacy industries, notably Space, that still lead the global market. The weather remains unsurpassed, the beaches alluring and the topography still spectacular.
are just as appealing to the poor as to the rich and the poor are less likely to flee to avoid California’s taxes. And those taxes are what feed government, education, and health care. It’s a positive feedback loop.
