Time Has Come for State’s Democrats to Drop Bad Habits and Fix Economy : CALIFORNIA PORTFOLIO

With a friend in the White House, a weakened GOP governor and firm control of the Legislature, California’s Democrats can no long shirk their economic duty to lead the state’s economy back to health. That means, among other things, a serious commitment to reinvigorate the state’s faltering industrial base. But first they must overcome some bad habits:

-- Waiting for Washington . No sooner had Bill Clinton won than some prominent state Democrats began calling for manna from Washington. To be sure, federal funds are an essential part of any California economic recovery program, and state leaders should demand fairer treatment in Washington than they received from the “anywhere but California” inner circle of George Bush.

But “waiting for Bill” is too handy an excuse for Sacramento Democrats unwilling to face up to the tough state issues involved in revitalizing the economy. No matter where the money comes from, California’s leaders--not insular Washington bureaucrats--are better positioned to develop pro-growth policies for the state’s entrepreneurs, workers and economically hard-pressed communities.

-- Protectionism . Too many Democrats believe that California’s economy can only survive behind a wall of tariffs and quotas. Protectionism, however, would be suicidal for a state heavily dependent on international capital and trade. During the recent recession, for example, California exports grew at twice the national average, and international trade created more than 9,000 new net jobs in Southern California alone, one of the few sectors of the local economy to exhibit strong employment gains.

California officials, as have their more prescient counterparts in such states as Pennsylvania and Michigan, should concentrate on preparing local companies for the challenges of international competition. Democrats must work to expand the state’s trade, while insisting that foreign firms share their technology, investment and licensing opportunities with regional producers.

-- Anti-business . Democrats, Assemblyman John Vasconcellos, chairman of the Ways and Means Committee, once remarked, traditionally identify with employees, but not bosses. Nothing undermines the Democratic Party’s ability to take the economic lead more than its dogged refusal to recognize that convoluted environmental regulations and inequitable worker’s compensation laws rob California of thousands of jobs, as well as antagonize the business community.

Pete Wilson’s political combativeness contributed to last year’s impasse on these issues. But state Democrats must drop their political finger-pointing and facilitate enactment of economic reforms. Recommendations growing out of the Vasconcellos-led ADEPT report and the almost-forgotten California Competitiveness Commission deserve immediate legislative attention. Two of the most important proposals call for reducing workers’ compensation stress claims, and regulatory relief and tax incentives for job-producing smaller companies. Lining up behind these proposals would do much to persuade skeptics of the Democrats new pro-business stance.

-- Anti-urban development . Many Democrats continue to block virtually any effort that would bring new jobs and wealth to their urban, working-class constituents. Even today, for example, left-liberal politicians in Los Angeles’ Westside religiously oppose--whether on environmental, quality-of-life or ethnic-quota grounds--such positive, job-generating projects as movie-studio expansions, an air-package facility at the airport or the Playa Vista development near Marina Del Rey.

Similarly, Democrats can’t afford to stand idly by as such industries as metal-bending, garments, furniture, printing and painting leave the cities. By piling ever more stringent conditions on urban development, left-liberals, in effect, steer economic activity to the distant suburbs or to still-pristine, undeveloped regions of the state and away from city residents who most need jobs.

-- California declinism. Democrats must resist the temptation to paint the state’s emerging non-white majority as perennial victims that can only be “saved” by special preferences and huge public assistance programs. This bit of political correctness needlessly exacerbates interethnic tensions, demeans the remarkable accomplishments of entrepreneurs from California’s ethnic communities and plays to people’s worst prejudices.

In many ways, the internal challenges facing California’s Democrats are no less daunting than those of revitalizing the state’s economy itself. But if the party can kick its bad habits, it will regain the confidence both of California’s business community and the voters, assuring that the state remains a linchpin of an emerging national Democratic majority.