As the Los Angeles economy rebounds from a rough year and a half of uncertainty we see new hope, new obstacles and yet more uncertainty.  With the collapse of many giant companies and an excess of available retail real estate we are seeing foreign companies that have had success in the recent past taking a chance in the US market.  As these new companies bring their goods to the Los Angeles market we see the potential for new jobs and increased consumer spending.  The entertainment industry appears to be picking the pace up now that the strikes they have faced for the last two years appear to be behind them opening the potential for more jobs and more studio spending which makes up a large portion of the LA economy.  While we are seeing these great improvements we are also dealing with new obstacles such as a water shortage.  With California financially strapped the ability to purchase out of state water is not as easy, we have been forced to reduce consumption and water our lawns on certain days and hours.  There appears to be a lot of change going on in the LA area, but what we are unsure of is what is really changing and if it is for the better or worse.  Unemployment remains higher than in recent history, real estate appears to have leveled out, the state of California can’t balance their budget and the average business man is unsure if they should grow their business or shut it down.  The bottom line is don’t give up.  The economy is turning around, even if it is slower than you may have hoped for.

I just read an article on the NY Times Blog that made me realize how hard hit the entertainment industry has been with the recent economic woes.  Film Locations in the city of Los Angeles are at their lowest rates in over 16 years.  With an entertainer as the governor of California how can we not be supporting an entertainment stimulus package similar to what Canada, Detroit and other cities competing for filming have done.  Their are tax incentives in many cities to promote the use of locations throughout the United States, why does Los Angeles and the great state of California not push something through to keep their prime business in their own district boundaries.  Michigan would fight if the auto industry threatened to leave Detroit, North Carolina has its claim on the tobacco industry and Los Angeles has the glitz and glamour of Hollywood and the television and film industries.  As a long time resident of Los Angeles as well as a part of a business that relies on film companies working on their productions in Los Angeles and production companies renting office space it is a shame to see that we have allowed other cities to take our business away without a fight.

Living in California definitely has its perks, but the high tax rates is not making it easy to survive in this tough economic time.  California not only has the highest state income tax rate but has recently raised taxes in many other areas to make up for a state budget deficit.

The sales tax has already increased and is scheduled to go up again in a few months.  While many businesses are struggling to sell their products and increase in sales tax is not helping any struggling business.  While you may think this only stretches as far as the California border the effect stretches across the entire country.  California residents are thinking twice about purchasing a new car or buying new furniture.  Major purchases of all types are being put off for a time when the economy and the cost is more justifiable.  Businesses that have been struggling to sell their products or services are now forced to cut sales prices to make up for the difference that the state in now taking.  Now go the next step, landlords are hearing that tenants are operating failing businesses and need rent reductions or are going out of business.  The effects go on and on from one industry to another. 

If your business has been effected by these recent changes or you have lost your job due to the rough economy in California then make your unhappiness heard.  Write the big guy in Sacramento and let him know your feelings.  California needs new leadership as the promises of a better California have ended up broken.

I was listening to the news today and hearing economists talking about how the housing market along with the economy may have bottomed out.  While we can all hope that this is true now, I thought back to last year and even before then when many colleagues and friends were hoping and waiting for a collapse in the housing market so that they could buy a home at a lower price.

While their prayers were answered, many did not know what would come along with the fall in housing prices.  The stock market crashed, companies went out of business or laid off employees, reduced salaries were offered in some cases instead of a layoff.  Now those dollars everyone was planning on using to buy a home at a lesser value are even harder to come by.  Loans are near impossible to get as the banks have all been tight with cash and needed a government bailout to save them.

Today everyone I know that was gleeful at the idea of a housing market correction is still in an apartment, some are out of work, many are earning less than they were a year ago and everyone has been stressed over the slumping economy.  Next time you think how it would be nice if prices fell think about the repercussions to the rest of us.

In a recent article from the Wall Street Journal the slow down in the economy and the halt in lending has stalled the revival of Downtown Los Angeles.  As many developers have committed to rebuilding the historic core of Los Angeles the lending arm of our economy has shown its reservations.  Land and buildings have been purchased, time and money has been spent on plans, the local government has worked with developers all in an effort to rebuild the downtown area.  L.A. Live has set the groundwork for downtown to be a destination and a home for all of those in Los Angeles.  These improvements would not only financially benefit the city and its residents but also help the environment.  Less reliance on self transportation and more on mass transit, a central business district for the city and more.  While the banks are getting bailed out by our government they are not passing on the good will.  The money being given to these financial institutions should be passing through to businesses to reinvigorate our economy.  We all need to work together to get out of this depression.