Q & A : Ron Brown on Turning L.A. Around

The Clinton Administration has named Commerce Secretary Ronald H. Brown its point man to help revive the California economy and rebuild riot-torn areas of Los Angeles County. Brown accompanied Clinton on his visit last month to the city to drum up public support for his economic package. Brown, 51, was interviewed at the conclusion of the two-day Western trip by Carolyn Patricia Scott.

Question: Can we begin with an overview of the basic direction and objectives of the President’s plan for urban economic recovery?

Answer: The President is very anxious to demonstrate that his Administration is a proactive Administration. We’re not an Administration that waits for crisis, but we’re going to be there, over time, to help with the economic recovery of California. Our judgment is that until the California economy begins to recover, we cannot declare that the American economy is on the road to recovery. Since one out of every 10 Americans lives in California (and) California represents 14% of our Gross Domestic Product, its economy is key to our country’s economic future.

We also want to make it clear that we are not there to impose any economic recovery plan on California and Los Angeles, but there to provide a helping hand. . . . Unless people participate in putting a plan together, they’re not going to feel a real stake in it. So we think we can play a role in not only convening groups, but also in pushing forward the planning process and in helping to mobilize resources.

I’ve already met with elected officials and community leaders and grass-roots organizations and business people in California. I’ve met with Asian-Pacific leaders, and Latino leaders and African-American leaders. I’ve been to California seven times since the President gave me this assignment about two months ago.

We didn’t get in this mess overnight; we’re not going to get out of it overnight. When I was first given the assignment, people talked about--particularly as it pertains to Los Angeles--this was an “April 29, 1992, problem.” I pointed out that this is really an August, 1965, problem (the date of the Watts riots) that was never addressed effectively or appropriately.

Q: There are many who are unemployed, many small businesses that are still reeling from the effects of losses they suffered in the spring of 1992. What kind of time frame does the President have for the implementation of his economic program?

A: (The program addresses) the long-term view. We know that people who are unemployed are concerned about the short term, as well. We know that California’s been hard-hit by stagnation and recession and that’s been exacerbated by cutbacks in defense spending and that’s why it deserves some special attention. . . .

I think there are important ways in which we can coordinate existing resources more effectively than has been the case in the past. (There are ways) in which we can complement state, local and county activities in a more effective way than we have. In the past, we’ve had duplication of effort and not a lot of coordination of effort. I think we can do a much more effective job of that.

Q: Are there other efforts in progress, besides our wait for ratification of the President’s economic plan?

A: Well, (ratification) is certainly a part of it because, clearly, there’re such things in (the program), such as summer youth employment, that are pretty important in the short term.

The President also has some specific legislative initiatives--the Economic Empowerment Act, which would create 10 so-called empowerment zones and 100 enterprise communities--that would be coupled with our community development bank concept and our community policing programs.

Q: Certain businesses--possibly liquor stores--may be barred from re-establishing themselves in the inner city. Would these riot-affected businesses be able to avail themselves of this assistance if they are forced to rebuild outside these enterprise zones?

A: Well, I don’t know that that specific question has been addressed. I will say that I think that we need to be sensitive to the plight of all the entrepreneurs who were adversely affected in April, 1992. A lot of people lost all that they had worked so hard to achieve. By the same token, I think this needs to be a “bottom up” kind of exercise: community groups need to be heavily involved in deciding what kind of enterprises they want in their community.

Q: Will programs, such as the community policing component of the President’s program, be implemented solely on tax-incentive savings the city might realize, or will there be any direct funding?

A: Both. There are going to be tax incentives in the President’s plan. We think that business development, small-business development, is a very, very important part of our approach for several reasons. Not just because its sort of “do-gooder” activity, but I think it’s terribly important for entrepreneurs to have roots in the community, to be in and of the community. I think that creates role models for young people in inner-city areas, which I think can be very important.

You also have to understand that that’s where our real employment opportunities are for the future. We often focus on the Fortune 500 companies. The Fortune 500 companies employ just 11% of the private-sector work force in America. Small businesses employ 60% of the private-sector work force in America. I think we need to keep that in mind as we look to economic development in the future.

There are some units of the Commerce Department that are going to be actively involved. One is the Economic Development Administration that is there to help world and urban communities in economic revitalization. This was a department of the Commerce Department that the Reagan and Bush administrations attempted to zero out of the budget every year of the last 12. We’ve been trying to build it up, because it is so needed.

And the other is the Minority Business Development Administration, also a part of the Commerce Department that we are beefing up, because we think that minority enterprise is such an important part of this plan and program.

Q: Are there going to be any efforts, besides those on behalf of the economy, to address issues such as drugs and crime, that have an impact on the central city?

A: For too long we have looked at social progress as almost antithetical to economic progress. I think we need to look at the two as one. In my judgment our ability to move to a more just America is going to be directly dependent on our economic strength, our ability to create an environment for sustained economic growth. That’s how you create high-wage, high-quality jobs for our people.

It’s a matter of a better education system, a improved health-care system, welfare reform. All of those things have to be part of our programs and policies.

Clinton’s Economic Plan

The Clinton Administration has pledged to find new ways to revitalize inner-city areas. Here are some highlights of Clinton’s plan, which has yet to be approved by Congress. * EMPOWERMENT ZONES--Proposes to create 10 such zones. Companies located within the zones would qualify for a $5,000 tax break each year for each local worker employed. Businesses outside the zones who hire workers who live within a zone can receive $2,400 a year in tax benefits for each of those employees. * ENTERPRISE COMMUNITIES--Proposes to create 100 enterprise communities in which businesses would be eligible for special federal help from new and existing federal programs. * REGULATIONS WAIVED--Empowerment Zones and Enterprise Communities may have certain federal regulations waived to help jump-start economic recovery. * TAX BREAKS--Newly employed workers in the zones and communities would be able to save $700 per year, tax-free. Source: Los Angeles Times library