ATTEMPTING TO CONNECT IN CALIFORNIA Clinton tries note of optimist in state deeply depressed ON THE POLITICAL SCENE


LOS ANGELES -- He doesn't sport an earring, didn't tag his daughter with a name like "Juniper" or "Moonunit" and hasn't set foot in a hot tub since being elected president, but Bill Clinton would do all that and more if he thought it would help him connect in California.

"I came here for a very specific purpose, and that is to [explain] . . . the work we're doing to try and turn the California economy around," the president said this week upon arriving in Southern California. "We can't really turn America around until we can lift the economy of California up."

Last year, Mr. Clinton showed that California, home to one in eight Americans, was the new cornerstone for any would-be Democratic president. But carrying the economically depressed state in a presidential election against an unpopular and decidedly un-Californian president is one thing. Fixing its deeply troubled economy is quite another.

California's unemployment rate has hovered between 9 percent and 10 percent for two years. Since 1990, real estate prices in some markets have fallen as much as 25 percent, wiping out the equity of many middle-class homeowners. A five-year drought that just ended harmed the state's great agribusiness, led to layoffs of seasonal field hands and devastated recreation-related industries ranging from skiing resorts to fishing camps.

Aerospace industry employees and defense workers have been laid off by the tens of thousands, leading to declines in tax revenues that, in turn, have forced state and local governments to lay off teachers, cut welfare benefits and raise tax rates.

A decade-long flood of immigration has overburdened the state's health care system and public schools. Meanwhile, retirees are fleeing the state in droves for almost crime-free and low-tax retirement havens in Nevada, Arizona and other states, further eroding the tax base.

Last year, the state paid its debts with IOUs. This year, facing a $9 billion shortfall, Sacramento is gearing up for another bruising budget battle between Republican Gov. Pete Wilson, who wants to slash spending, and the Democrat-controlled state legislature, which is contemplating some sort of deficit-spending scheme.

"We ought to file Chapter 11 and acknowledge we are deeply in trouble," says John Vasconcellos, chairman of the budget committee in the state Assembly.

This is the economy that Mr. Clinton wants to jump-start.

"Good luck," says Nelson Pedrozo, an economic researcher with the UCLA Business Forecasting Project. "I'm not sure the federal government can do much. The solution has to come from California."

What Mr. Pedrozo thinks California needs right now is what has always characterized the state most: confidence. He's less sure about the impact the president's failed $16.3 billion stimulus package would have had.

On a two-day, campaign-style swing this week, the president took both tacks: He boasted of the federal largess his administration was throwing California's way and also dispensed liberal doses of the irrepressible optimism that Californians have always looked for in their politicians.

'Very bright future'

Asked by a 12-year-old boy what kind of future was in store for Americans his age, the president said in an uplifting tone of voice, "I think you've got a very bright future. The world you live in will be freer of the threat of total destruction than any world we've ever known . . . The volume of knowledge will double more quickly, and you will know more and do more with technology than any group of Americans or any group of people ever have. And I think you will be part of a new burst of American prosperity."

But the president also stressed the old-fashioned political contracts and high-level attention that have been steered California's way.

"My secretary of transportation was out here just a few days ago announcing a $1.4 billion commitment to the [Los Angeles subway] system," the president said at Los Angeles Valley College. "We're here for the duration."

Everywhere he went, Mr. Clinton assured California audiences that he was seeking more federal money for such California-specific needs as Border Patrol guards, defense reconversion and the education and health care needs of new immigrants.

The president told one California audience that Commerce Secretary Ronald H. Brown, who is heading up an inter-agency )) team to study what might be done to help California's economy, had made seven trips to California since the inauguration and joked that Mr. Brown might as well live there.

Not everyone thinks Mr. Clinton is approaching the problem the right way, however.

"Ron Brown was a horrible choice," says Joel Kotkin, a senior fellow with the Center for the New West. "Not only is he from New York, but he sees things from a black-white paradigm when, out here, Asians and Latinos are more a part of the mix."

Mr. Kotkin added, "He's also a big-company, big-government kind of guy. He and Clinton want to move this defense conversion stuff through the big companies, but what they ought to do is create incentive for the small, 5-year-old companies to absorb the workers of places like Lockheed."

In addition, California's short-term needs are so great that some business and political advisers to the president worry that the government will neglect the state's long-term needs, which, if anything, are even more dire.

"Most people don't realize how much the riots devastated the economy of Los Angeles County," said David Mixner, a Los Angeles-based adviser to Mr. Clinton. "You can't lose 5,000 buildings, all of which were on the tax rolls and employed people, and not have it hurt. At the same time, we need major work retraining workers. I mean big, big contracts -- probably from the federal government."

At the same time, California is also the birthplace of the anti-tax revolution of the 1970s and 1980s, and those fires still burn.

'You broke your promise'

At a town meeting in San Diego Monday night, the first question from the audience came from a man who chided Mr. Clinton for reneging on his campaign pledge of a middle-class tax cut and said, "Please understand, Mr. President, San Diegans just don't have any more money to contribute to the coffers of government."

The man then pointedly asked the president, "Can you name one country that has ever taxed and spent itself back into prosperity?"

One part of the president's answer -- "I've got four years, give me four years to try to deliver on the middle-class tax cut" -- might have been considered an ad-libbed throwaway line in Washington. It was front-page news in California.

The next day at Los Angeles Valley College, the president faced tax-hating hecklers who shouted at him, "You broke your promise!"

For two days, the president tried to sell his economic package as the best combination now available of spending cuts, tax increases and "investment" in programs.

Perhaps because the president spoke with passion about his program or perhaps because voters are growing leery of being pandered to, it was at these times -- when talking about his national program, not specifically California -- that his California audiences seemed to respond to him.

At least one prominent Bay Area economist thinks this is probably for the best.

"I think that until the nation recovers, California will not have a good year," said Stephen Levy, director of the Center for Continuing Study of the California Economy. "I think the best thing the president can do for California is stick to his program of cutting the deficit while still offering short-term economic stimulus. If he does what's right for the nation, California will do well."

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