Author: Charles Crumpley

How often have you heard the bromide about how the rich get richer and the poor get poorer?

Well, it’s difficult to look over this year’s list of the wealthiest Angelenos, which is in the May 18 issue of the Los Angeles Business Journal, and declare that that’s true. By our count, 41 of the 50 wealthiest Angelenos lost money over the last year, and eight of them lost more than $1 billion each. Only three on the Business Journal’s wealthiest list actually gained money. On the whole, the rich certainly did not get richer.

Now, I know some could argue that this is only one year and an aberrant one at that, so it doesn’t really count. Over time, the rich do get richer and the poor, poorer.

I love the Fortune 500 list. I particularly like the way Fortune reranks its list, such as sorting out the companies that grew the fastest and the ones that proved to be the best investment.

But when I got this year’s Fortune 500 issue last week, it occurred to me what I don’t like about it. Fortune fails to group the companies by metropolitan area. Granted, it does sort them by strict city limits, but that seems archaic since so many corporate headquarters today are in suburbs.

It’s crucial for a metropolitan area to have big corporate headquarters. Major companies provide a base of employment (the effects of this recession notwithstanding) and they tend to underwrite the arts, donate to local civic causes and create foundations. Beyond that, the number of a city’s Fortune 500 companies is kind of a report card. It tells you whether the metro area is attracting and growing big companies – or is repelling them.

Since Fortune does not group the Fortune 500 companies by metro area, I figured I’d try. I picked 15 cities and added in the headquarters in their suburbs. Here goes:

When you sit down to negotiate – whether it’s over a union contract, a business transaction or a marriage proposal – you must have leverage.

It can be the threat of a strike, the promise to pay more money, or a plausible bluff. Regardless, if you don’t have some leverage – some weapon sitting beside you on the table – you’re gonna get rolled.

I bring this up because of the perplexing way the Screen Actors Guild gave away its leverage over the last year or so, but kept acting as if it had plenty.

Sure enough, the actors union got rolled. The proof came out about a week ago when the guild’s divided board voted 53 percent to 47 percent to recommend basically the same contract that the board turned down last year.

It’s spring-cleaning time, and this would be a fine moment for the city of Los Angeles to drag all of its old items outside and hold a big garage sale.

Indeed, if the city were to follow through on Mayor Antonio Villaraigosa’s notion of selling the Los Angeles Convention Center and Los Angeles Zoo, or at least selling the operating rights, we’d get a two-fer: an improved city budget and a spark of business activity.

Look at what Chicago is doing. A company gave the Windy City $1.2 billion to take over management of the city’s parking meters. A consortium last year agreed to give Chicago $2.5 billion to take over Midway Airport.

With numbers like that, L.A.’s expected budget deficit of $500 million or so next year suddenly looks manageable.

Top executives like having their headquarters in Los Angeles. They say they enjoy the fine weather and the celebrity glam. But expansions? New plants? They say put ’em in Nevada or someplace else where taxes are lower and regulations are lighter.

That’s why the single-sales factor of taxation that the state Legislature recently passed is important. It kills a lot of the incentive for businesses to site their expansions and new plants in other states.

As reported in the Business Journal last week, the current formula makes each company pay state taxes based not only on the amount of sales the company makes in California, but also on the payroll and the value of the property in the state. The new formula eventually eliminates the tax on the payroll and the property, relying instead on in-state sales. That means a company could add a string of plants and double its employee count in California and theoretically pay no additional state tax.

In short, the Legislature told businesses to come on in, the water’s fine.

Throughout its economic history, Los Angeles has been able to count on one thing above all else: growth. People have always come here for the fine weather and laid-back lifestyle. Businesses and jobs followed.

Recessions caused no long-term downturn because more people eventually flooded in. No one cared greatly if businesses left. That’s because plenty more businesses popped up to serve all the people.

But have we hit the outer limit of all that growth? Has our capacity been filled? Have we hit the wall?

The Washington Post’s Steven Pearlstein came to Los Angeles a few weeks ago and, with the sharp eye of an outsider, seemed to spot something that residents may not have noticed.

Why do the Port of Los Angeles and Mayor Antonio Villaraigosa so hate small, independent trucking firms?

The city-owned port and the mayor have been on a long campaign to eradicate the thousand or more companies whose trucks haul cargo in and out of the port. And they have cynically tried to use the Clean Truck Program as a club to knock the life out of the small companies, as if they were so many baby seals huddled around the port.

Of course, the answer is simple: They hate the little companies because they’re not unionized. The port could have written its Clean Truck Program merely to create a fair and just system in which new clean-burning trucks could be purchased by the small trucking firms at subsidized rates. Instead, its program mandates that new trucks be driven by employees of a few big companies – big companies whose employees can be organized easily by the Teamsters.

The virulent backlash against companies that have accepted money from the government is understandable – to a point. The question is, have we sped past that point?

It’s reasonable to inveigh against AIG-style bonuses to executives who helped steer their companies into the ditch. It’s understandable to rail against companies for lavish perks, especially if those companies are getting taxpayer money.

But is the pitchfork-and-torch routine being employed a little too reflexively and too often?

A good example is the pillorying of Northern Trust Corp. for its sponsorship of a golf tournament last month at the Riviera Country Club in Pacific Palisades.

You hear people say it all the time: Los Angeles is a business-friendly town.

C’mon, now. Isn’t that a teensy bit hard to believe? I mean, I’d believe Frank McCourt will invite Scott Boras to a weekend fishing trip before I’d accept the notion that Los Angeles loves businesses.

I’ve railed in the past about how local and state governments here routinely rough up businesses. And now it seems a majority of people here aren’t real fond of them, either.

Want evidence? Let’s look at Tuesday’s election.

In the Fifth District City Council race, you have a candidate whom the business community rallied behind in Adeena Bleich. She won the endorsement of the Los Angeles Area Chamber of Commerce and former Mayor Richard Riordan. But she lost the election.