THE ONE AND ONLY ISSUE FOR CALIFORNIA: Jobs : The power elit fiddles while the state runs into deeper economic trouble: Is there no leadership?

With Time magazine’s attack cover on California, the current wave of California-bashing has reached its lowest common denominator. Already regarded in the East as the “the next Houston,” California is now instructed by the mavens at Time to take economic-development lessons from Utah, whose culture is said to be appealing to foreign investors. That’s right, Utah. A state whose total foreign investment would unlikely match that found in 10 square blocks of downtown Los Angeles, Hollywood or even Torrance.

Californians, Time admonishes, need “to get serious” about their economy. As usual, the magazine has got it wrong. The average Californian is very serious about the state and its hard-pressed economy. It’s the people in Sacramento--and Los Angeles City Hall--who lack the seriousness to tackle the problems.

But this is about to change as people across the state begin to focus on the economic challenges. Once relegated to the back rooms of Chamber of Commerce halls, economic development is emerging as the mainstream issue for California in the 1990s. Across the state, a plethora of new business groups--among them the Los Angeles County Economic Development Commission’s Business Retention Program and the “Why Do Business in L.A.?” campaign--plead for a better economic climate.

For most of the past 25 years, such efforts would have been laughed off as either self-serving or expressions of mindless boosterism. With federal contracts and new industries sprouting all over the state, few in the media or the political community thought much about economic development strategies. The state’s economic abundance made any such policy seem irrelevant.

As a result, California politicians, liberal and conservative, are woefully unprepared for the politics of scarcity that seems likely to dominate the ‘90s. For a generation, the state’s economic debates revolved around minority entitlements and environmental protection. States stung by the recession in the early ‘80s, meanwhile, worked up sophisticated economic development and marketing schemes. When California’s economic glow began fading in the late 1980s, those states pounced on a business community already feeling overregulated and underappreciated.

Yet even now, as our economic competitors declare economic war, California politicians, for the most part, still act as if a strong economy was the state’s by divine right. This devastating addiction to the politics of abundance has been truly bipartisan.

The state’s mostly anti-government governors of the last 25 years defined economic growth in terms of lower taxes. Wealth-creation and investment strategies generally remained underdeveloped and half-hearted. “California was just arrogant about growth,” noted one long-time Los Angeles business leader.

Conservative faith in “me-first” philosophies led to a relentless attack on many of the basic necessities--roads, schools, public services--underpinning the state’s economy. Budget surpluses were squandered by such political gestures as tax rebates. “The right to the second Mercedes”--and damn the consequences for the rest of Californians--became the theme song of many conservatives.

But George Deukmejian and the Republicans represent, at best, half the problem. Equally damaging has been the Democrats’ Pavlovian embrace of the entitlement demands of their key constituencies, such as trial lawyers, who have been among the few beneficiaries in making California’s workers’ compensation costs one of the highest in the nation. State employee unions, another Democratic constituency, have received years of benefit and wage increases, which also have contributed to the budget crisis. Union reluctance to leverage their huge state pension funds to promote economic growth and wealth creation have squandered another great potential resource.

Innovative solutions--such as targeting the 10% of cars that produce more than half of all automobile emissions--would lessen bureaucratic micromanagement and give more time for stationary sources, particularly factories, to comply with the clean-air provisions. Yet, such approaches, not surprisingly, do not please agency empire builders and their allies.

In Los Angeles, which entered the 1990s as the best economically positioned big city on the continent, similar pathologies have been at work. Even as job losses and vacancies have mounted, City Hall seems to have taken a trip to the far reaches of Pluto. Instead of trying to alleviate business concerns in the midst of a deepening recession, the mayor’s office has responded with compulsory unionization schemes and proposals for new taxes on new commercial construction and restrictions on truck traffic that have exacerbated a growing sense of despair among city business people.

So removed from economic reality are the bureaucrats at City Hall that even attempts by journalists to gain positive information on Los Angeles’ economy have been spurned by city officials who seem too busy or uninterested to even write a promotional piece. “I was surprised that they wouldn’t take an opportunity to put a positive piece in our paper about L.A.,” said Vari McNeil, director of supplements for the Los Angeles Business Journal. “They just don’t seem motivated and enthusiastic about their own city--and that’s what I thought we were paying them for.”

Perhaps the epiphany of economic dunderheadedness came in the recent veto by Mayor Tom Bradley of a $15-million plan to develop a garment-manufacturing facility in a decaying building downtown. The project, which would have bolstered Los Angeles’ growing fashion industry and provided as many as 7,000 new jobs, mostly for working-class Latinos, represented the most sensible of economic alternatives for a downtown suffering from soaring office vacancies and pervasive urban rot. The mayor’s veto, based on the usual environmental and traffic concerns, also ignored the more pressing reality that rising rents in an already overcrowded garment district, which the project would have relieved, are forcing manufacturers to relocate outside the city.

As for the City Council members, as Rodney Dangerfield would put it, they are no bargain, either. One aide to a council member recently complained over drinks, “Where are all the jobs from this Pacific Rim?” She then explained that controlling development, not creating jobs, was still the key interest in the district. Although studio expansions on the Westside would create wealth and many good new jobs, homeowner opposition still carries greater weight.

In the next decade, however, this decidedly anti-economic mentality may soon become as out of fashion as bell-bottoms. Not only in the business community, but among the growing numbers of middle- and working-class Californians, the current recession has shifted attention to such issues as job and wealth creation. This is particularly true for younger people and their parents, including many in the minority communities.

During the ‘90s, California’s work force is expected to grow by 20%, nearly three times the national average. The majority of the new job seekers will be minorities. Unlike their counterparts in the older cities of the Northeast, where as many as 40% never pursue employment, most of these young Californians will want work. The critical issue for them will not likely be “set-asides” or entitlements, but economic growth, wealth and job creation.

California’s business leaders cannot expect to win the support for the changes they need to make without offering something other than the usual vague promises of “trickle-down” economics. The plethora of new business groups dedicated to saving the state and local economies should appeal to the emerging minority constituencies by adding, for example, expanded job-training incentives to their basket of development proposals. They must also reach out to the largely unorganized small- and medium-sized firms, many founded by immigrants, who created 80% of all new jobs in Los Angeles during the 1980s.

This will perhaps be the biggest challenge to some of these groups, whose leadership remains dominated by sociologically isolated lawyers, financiers and corporate executives. Many of these elite leaders, who live in splendid remote neighborhoods and have their own private retreats out of town, all too often propose housing and commercial reforms that threaten to destroy the middle-class homeowners who represent the critical voting bloc and the ballast of our society. That Time, as well, pushes the idea of curtailing single-unit housing seems to suggest that we follow the same pattern of concentration that has worked so wonderfully back in New York.

If the business leadership can take this leap of consciousness, a new political economy could begin to emerge in California, one that unites the interests of economic development with a broader social agenda. This would set the stage for a new kind of California politician--perhaps a 21st-Century Chinese- and Spanish-speaking Edmund G. (Pat) Brown Sr., someone who can make common cause among working-class Latinos, the white middle class and our emerging entrepreneurial leaders.

Back in the 1950s, California faced similar challenges brought on by growth even as defense cuts after the Korean War had whisked the rug from under the state economy. Yet progressive leaders like Brown saw the need for a massive infrastructure that would allow the newcomers to create new wealth. Our state’s still-impressive array of universities, the freeways, the ports, the parklands--all were part of an enlightened long-term growth strategy that united Californians of varying classes and colors. As they stimulated growth, these developments were ultimately paid for not by entitlements or through tax cuts for the rich, but by stimulating economic growth and wealth creation.

As the 1990s unfold, such an aggressive growth-oriented strategy can provide us with the wherewithal to not just cope with our problems, but overcome them. Some of today’s difficulties, no doubt, are different. Brown did not face problems associated with massive immigration, congestion and scarcity of capital. But, as in the late 1950s and early 1960s, and as Brown recognized, the essential solution lies with empowering individual Californians--the widely diverse and talented 30 million of us who have not given up on the dream, who don’t need tired politicians or Time magazine to tell us what time it is. We, not the Eastern mavens or politicians, are the key to recapturing the political will and sense of purpose that our leaders have lost.