The recession hit Southern California earlier and harder than almost any other part of the country—and it’s likely to linger a lot longer too, Steve Pearlstein writes in the Washington Post. The area played a “central role in the Bubble Economy,” and now, being the “capital of conspicuous consumption” is a bad gig. The entertainment industry looks unsustainable, and real estate is obviously moribund.
Volume at the ports of Los Angeles and Long Beach, one of the area’s most important economic engines, has fallen by a third. California’s always relied on steady population growth to drive growth and support “the Ponzi scheme that passes for public finance.” But that stream of newcomers has essentially dried up, and, as one developer puts it, “LA is becoming a Third World City.”