11/16/01

LC011116

VAL>> ON LIFE AND TIMES TONIGHT --

JESS>> CRITICS IN HIS OWN PARTY CLAIM HE'S NOT A REAL REPUBLICAN, BUT THE POLLS SAY HE'S THE PARTY'S FRONT RUNNER IN THE RACE FOR GOVERNOR.

RICHARD RIORDAN>> I LOVE CALIFORNIA, YOU LOVE CALIFORNIA.

JESS>> TONIGHT WE'LL HEAR FROM THE MAN HIMSELF, FORMER LOS ANGELES MAYOR, RICHARD RIORDAN. FOUR MONTHS AFTER LEAVING CITY HALL, HE THREW HIMSELF INTO A STATEWIDE CAMPAIGN FOR THE REPUBLICAN NOMINATION FOR GOVERNOR. DOES HE HAVE WHAT IT TAKES TO BEAT GRAY DAVIS AND IS HE UP TO THE GRILLING HE'LL GET IN A STATEWIDE RACE?

VAL>> AND SPEAKING OF MAYORS, L.A. MAYOR, JAMES HAHN, GOT ELECTED THIS YEAR WITHOUT THE HELP OF BIG LABOR.

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VAL>> AND ONE OF THE CITY'S TOP UNION LEADERS IS STILL GETTING GRIEF FOR BACKING HAHN'S OPPONENT, ANTONIO VILLARAIGOSA. WAS IT A POLITICAL BLUNDER THAT HURT LABOR AT CITY HALL? TONIGHT KERMAN MADDOX GETS TO THE BOTTOM OF THE CONFLICT AS HE GOES ONE-ON-ONE WITH MIGUEL CONTRERAS.

JESS>> THERE'S PLENTY OF BAD ECONOMIC NEWS TO REPORT, BUT FINALLY THERE ARE SIGNS THAT LOS ANGELES MAY GET A BREAK. TONIGHT WE'LL LOOK AT THE LATEST ECONOMIC FORECAST FOR SOUTHERN CALIFORNIA. IT'S NOT ALL SUNSHINE, BUT AT LEAST SOME OF THE DARK CLOUDS ARE THINNING OUT. WE'LL GET THE DETAILS ON THE LATEST ROUND OF NUMBER CRUNCHING.

VAL>> THESE STORIES COMING UP NEXT ON LIFE AND TIMES TONIGHT.

LIFE AND TIMES TONIGHT IS MADE POSSIBLE BY THE FOLLOWING FOUNDATIONS:

THE L.K. WHITTIER FOUNDATION
DEDICATED TO IMPROVING THE QUALITY OF LIFE BY SUPPORTING INNOVATIVE ENDEAVORS IN THE FIELDS OF MEDICINE, HEALTH, SCIENCE AND EDUCATION.


VAL>> GOOD EVENING, I'M ZAVALA.

JESS>> AND I'M JESS MARLOW.

SERVING AS MAYOR OF LOS ANGELES IS ONE OF THE TOP POLITICAL JOBS IN THE STATE, BUT IT OFFERS NO PROMISE OF SUCCESS IN A RACE FOR GOVERNOR. REMEMBER TOM BRADLEY? FOR THAT MATTER, SAM YORTY? BUT RICHARD RIORDAN HOPES HE CAN START A TREND AND HE DEFINITELY HAS TWO THINGS A CANDIDATE NEEDS: NAME RECOGNITION AND MONEY.

VAL>> BUT SOME CONSERVATIVE REPUBLICANS QUESTION RIORDAN'S CREDENTIALS LARGELY BECAUSE HE'S GIVEN SUPPORT TO DEMOCRATS, INCLUDING GRAY DAVIS. RIORDAN SAYS CALIFORNIANS ARE SICK AND TIRED OF PARTISAN POLITICS AND THEY WANT A GOVERNOR WHO CAN RISE ABOVE THAT. THE QUESTION IS, WILL REPUBLICANS TRUST RIORDAN ENOUGH TO MAKE HIM THEIR NOMINEE?

JESS>> RICHARD RIORDAN JOINS US NOW. ALSO HERE, OUR VETERAN MAN ON POLITICS, KERMAN MADDOX.

MAYOR RIORDAN, THANKS FOR COMING IN OFF THE CAMPAIGN TRAIL.

RICHARD RIORDAN>> THANKS, JESS.

JESS>> EXCEPT FOR TERM LIMITS, YOU'D REALLY RATHER BE MAYOR, WOULDN'T YOU?

RICHARD RIORDAN>> I THINK EIGHT YEARS IS ENOUGH FOR A PERSON AND CERTAINLY I THINK YOU'D GET A LITTLE EGOTISTICAL. YOU'D THINK NOBODY COULD DO A BETTER JOB THAN YOU CAN. BUT I THINK YOU GOT TO LET GO SOMETIME AND I THINK EIGHT YEARS WAS JUST RIGHT.

VAL>> WELL, YOUR EGO SEEMS TO BE CONTINUING. YOU CERTAINLY THINK YOU CAN DO A BETTER JOB THAN GRAY DAVIS, YES? OTHERWISE, YOU WOULDN'T BE RUNNING.

RICHARD RIORDAN>> WELL, I THINK THAT'S PRETTY EASY. I THINK THERE'S BEEN A TOTAL VACUUM OF LEADERSHIP IN SACRAMENTO. YOU HAVE A GOVERNOR WHO HIDES IN HIS OFFICE RAISING OVER $30,000 A DAY FOR HIS CAMPAIGN, HE'S A MICRO MANAGER, HE LOOKS AT THE POLLS BEFORE HE MAKES DECISIONS, AND WE'RE GOING TO GROW BY TEN MILLION PEOPLE IN THE NEXT TEN YEARS AND OUR INFRASTRUCTURE ISN'T READY. OUR TRANSPORTATION SYSTEM, OUR HEALTHCARE SYSTEM, HOUSING, WATER, EDUCATION, ENERGY, RIGHT DOWN THE LINE, WE ARE NOT READY FOR THIS DRAMATIC GROWTH.

JESS>> BUT YOU'VE GOT TO GET OVER A COUPLE OF GUYS BEFORE YOU GET TO GRAY DAVIS.

RICHARD RIORDAN>> YEAH, RIGHT.

VAL>> YOU'VE GOT BILL JONES RUNNING, THE SECRETARY OF STATE. YOU'VE GOT SIMON, WHO IS A MILLIONAIRE IN HIS OWN RIGHT, A BUSINESSMAN. ARE THESE PEOPLE BEATABLE?

RICHARD RIORDAN>> I THINK THEY ARE TWO VERY FINE PEOPLE. BILL SIMON AND I BELONG TO THE ST. MONICA'S CHURCH TOGETHER AND OUR --

JESS>> -- YOU EVEN TALKED HIM INTO RUNNING.

RICHARD RIORDAN>> WELL, HE SAYS THAT, YEAH, BUT --

VAL>> -- YOU CAN PRAY FOR EACH OTHER.

RICHARD RIORDAN>> -- OUR CHARITABLE FOUNDATIONS HAVE DONE A LOT OF THINGS TOGETHER. THE BOTTOM LINE IS, EVERYBODY KNOWS I'M A REPUBLICAN IN THE LOS ANGELES AREA, BUT THEY ALSO KNOW --

JESS>> -- HERE'S JONES' CAMPAIGN NOW.

VAL>> THERE THEY ARE. I'M SORRY, GO AHEAD.

RICHARD RIORDAN>> BUT EVERYBODY KNOWS I'M A REPUBLICAN, BUT THEY ALSO SEE ME AS A NONPARTISAN PROBLEM-SOLVER. WHETHER YOU'RE A REPUBLICAN, DEMOCRAT, INDEPENDENT, PEOPLE WANT A SAFER STATE, THEY WANT A STATE WHERE EVERY WORKING MAN AND WOMAN HAS ACCESS TO QUALITY JOBS, THEY WANT A STATE THAT PUTS CHILDREN AHEAD OF EVERYTHING, AND IT DOESN'T MEAN -- SOMEBODY SAID THERE ARE NO DEMOCRAT OR REPUBLICAN POTHOLES OR EDUCATION SYSTEMS. PEOPLE IN CALIFORNIA ALL WANT THE SAME THING.

JESS>> WERE YOU ENCOURAGED BY MICHAEL BLOOMBERG'S WIN IN NEW YORK, HE BEING A MODERATE REPUBLICAN?

RICHARD RIORDAN>> I THINK SO. I DEFINITELY AM VERY ENCOURAGED BY IT. HE SAYS HE WILL COME OUT HERE AND HELP ME IF I WANT HIM. HE'S A GREAT LEADER, HE'S DONE AN AWFUL LOT IN CHARITABLE THINGS, HE DID AN AWFUL LOT IN BUSINESS. KERMAN?

KERMAN>> I WANT TO ASK YOU ABOUT -- YOU TALKED ABOUT LEADERSHIP, YOU TALKED ABOUT BEING A PROBLEM-SOLVER, I WANT TO TALK ABOUT CALIFORNIA'S SLOWING ECONOMY AND THE FACT THAT WE HAVE A DEFICIT THAT EXCEEDS $12 BILLION DOLLARS. GRAY DAVIS SAYS THAT THERE ARE A NUMBER OF THINGS HE OUGHT TO DO TO BALANCE THE BUDGET. HE TALKS ABOUT PROGRAM CUTS. DO YOU THINK WE CAN JUST REDUCE PROGRAMS IN ORDER TO BALANCE THE BUDGET OR DO YOU THINK WE NEED TO RAISE TAXES AS WELL?

RICHARD RIORDAN>> WELL, I MEAN, FIRST OF ALL, YOU HOPE THAT GRAY DAVIS IS RIGHT. IF THEY'RE OFF BY SIX MONTHS, YOU COULD HAVE A $16 BILLION DOLLAR DEFICIT. IF THEY DON'T SELL THE BONDS THAT SO FAR THEY'RE NOT ABLE TO SELL, YOU COULD HAVE WELL OVER A $20 BILLION DOLLAR DEFICIT, AND THIS IS FROM THE HIGHEST SURPLUS IN THE HISTORY OF OUR STATE JUST TWO YEARS AGO. GRAY DAVIS ADDED 37 PERCENT TO OUR BUDGET IN TWO YEARS AND NOW HE'S GOT TO CUT BACK FROM THAT. YOU KNOW, IT'S INCREDIBLE. HOW DID HE DO THIS?

KERMAN>> BUT DO YOU -- IF YOU'RE A CANDIDATE NOW AND SO PEOPLE ARE LOOKING TO YOU TO FIGURE OUT WHAT SOLUTIONS DOES MAYOR RIORDAN HAVE, CAN WE CUT OUR WAY OUT OF A $12 TO $15 OR $20 BILLION DOLLAR DEFICIT OR, AT SOME POINT, DO WE HAVE TO RAISE REVENUES?

RICHARD RIORDAN>> WELL, TO RAISE OUR TAXES, FIRST OF ALL, HISTORICALLY, IT HASN'T WORKED. TEN YEARS AGO WHEN THERE WAS A BUDGET DEFICIT AND THEY RAISED TAXES, IT DID NOT INCREASE REVENUES BY A PENNY.

JESS>> DIDN'T HELP PETE WILSON EITHER.

RICHARD RIORDAN>> NO, IT DIDN'T. THEN ALSO, IF YOU RAISE TAXES, RIGHT NOW WE'RE KNOWN AS AN ANTI-BUSINESS STATE. OUR WORKERS COMP IS THE HIGHEST ALMOST IN THE COUNTRY. YOU HAVE UP AND DOWN THE RULES, THE REGULATIONS, CONNECTED TO BUSINESS ARE THE HIGHEST. TO RAISE TAXES, I THINK, WOULD BE DEVASTATING TO THE STATE.

KERMAN>> SO YOU REALLY DO THINK WE CAN REALLY REDUCE PROGRAMS TO THE TUNE OF ANYWHERE FROM $12 BILLION TO $20 BILLION TO --

RICHARD RIORDAN>> -- YOU'VE GOT TO. YOU'VE GOT TO FIND WAYS TO DO THIS AND THEY WILL. I MEAN, THERE ARE THINGS WHICH I DON'T LIKE LIKE WHAT THEY CALL RAW, REVENUE ANTICIPATION WARRANTS, WHICH I DON'T LIKE, BUT IF USED, YOU KNOW, WITH RESPONSIBILITY, MAY BE PART OF THE SOLUTION.

VAL>> YOU KNOW, WE JUST -- APPARENTLY, THE POST-SEPTEMBER 11 WORLD MEANS HARD TIMES FOR A LOT OF SECTORS, BUT ONE OF THE THINGS THAT'S REALLY GOING TO HURT ARE CITY COFFERS. OBVIOUSLY, THE RELATIONSHIP BETWEEN THE STATE AND THE CITY AND THE MONEY FLOWING BETWEEN THEM HAS ALWAYS BEEN A HUGE POINT OF CONTENTION. HOW CAN THE STATE DO A BETTER JOB OF SHARING WHAT WEALTH THERE IS, ESPECIALLY WHEN THE MONEY IS SCARCE ON BOTH SIDES?

RICHARD RIORDAN>> I THINK SOMEWHERE ALONG THE LINE IT HAS TO BE SET IN CONCRETE. IT'S CALLED ERAF, WHERE THE STATE HAS IN EFFECT STOLEN ALL OF THE PROPERTY TAXES FROM THE CITY. GRAY DAVIS SAID HE WOULD GIVE IT BACK TO THE CITY. HE PROMISED IT TWO YEARS AGO AND HE STILL HASN'T DONE ANY OF THAT.

VAL>> SO YOU'RE SAYING YOU'D DO A MUCH BETTER JOB OF SHARING STATE WEALTH --

RICHARD RIORDAN>> -- YOU'RE GOING TO HAVE TO DO IT, BUT YOU'RE GOING TO HAVE TO PHASE IT IN OVER A PERIOD OF TIME. AS KERMAN MENTIONED, YOU HAVE THIS INCREDIBLE BUDGET PROBLEM NOW. BUT I THINK RIGHT NOW YOU HAVE TO SET IN CONCRETE SPREADING THAT OVER A PERIOD OF TIME. YOU'VE GOT RIGHT NOW THE VEHICULAR LICENSE FEE. THE LOCAL GOVERNMENTS ARE GETTING $3.6 BILLION DOLLARS. THE GOVERNOR HAS HIS EYE ON THAT IN TAKING THAT AWAY. IF HE TAKES THAT AWAY, IT'S NOT JUST THE CITY. IT'S THE HEALTHCARE IN THE COUNTY AND THROUGHOUT ALL OF GOVERNMENTS THAT ARE GOING TO BE HURTING.

JESS>> YOU AND YOUR CAMPAIGN HAVE BLAMED GOVERNOR DAVIS FOR CALIFORNIA'S FISCAL AND ECONOMIC CRISIS. IS IT REALLY THE FAULT OF OUR ENERGY CRISIS? WAS THAT NOT WHAT KEPT US FROM THAT WARM GLOW OF A HUGE BUDGET SURPLUS TO THE DEFICIT WE'RE NOW FACING?

RICHARD RIORDAN>> I THINK IT'S A LOT OF DIFFERENT THINGS. THERE'S A RECESSION GOING ON AND CERTAINLY SEVERAL BILLIONS OF THE DOLLARS ARE PART OF THIS DEFICIT, BUT IT'S NOT EVERYTHING. ENERGY IS CLEARLY NOT EVERYTHING. GRAY DAVIS DIDN'T CAUSE THE ENERGY PROBLEM, BUT HE IGNORED IT FOR SIX MONTHS AFTER, YOU KNOW, WARREN CHRISTOPHER AND THE EDISON DIRECTORS WANTED TO MEET WITH HIM, THE SUPERVISORS IN SAN DIEGO WANTED TO MEET WITH HIM, HE REFUSED TO MEET. THEN HE WAKES UP AND HE OVERREACTS. THE RESULT IS, WE HAVE, WHAT, $43 BILLION DOLLARS IN CONTRACTS, WE HAVE A $6 BILLION DOLLAR DEFICIT FROM BUYING ENERGY AND WE'RE PAYING THE CONSEQUENCES.

KERMAN>> MAYOR RIORDAN, LET ME ASK YOU A QUESTION BECAUSE I THINK IT'S FAIR GAME TO CRITICIZE THE GOVERNOR FOR BOTCHING THE ENERGY CRISIS. WHEN YOU WERE MAYOR OF L.A., YOUR BIGGEST PRIORITY WAS TO BUILD UP THE LAPD AND I THINK YOU TOOK A LOT OF CREDIT FOR THAT AND YOU CLAIM THE CITY IS MUCH SAFER. BUT AT THE SAME TIME, ON YOUR WATCH, WE HAD THE RAMPART POLICE CORRUPTION SCANDAL. DO YOU BEAR ANY RESPONSIBILITY FOR THAT CORRUPTION SCANDAL AT ALL?

RICHARD RIORDAN>> WELL, YOU KNOW, I THINK YOU HAVE TO PUT RAMPART ON THE CONTEXT OF THE WHOLE POLICE DEPARTMENT. RAMPART REPRESENTED A TINY, TINY PERCENTAGE OF THE MEN AND WOMEN OF THE POLICE DEPARTMENT AND TO TAINT THE WHOLE DEPARTMENT WITH RAMPART IS WRONG. I'M PROUD OF WHAT THE WHOLE DEPARTMENT HAS DONE. I'M PROUD OF THE FACT THAT THEY CUT VIOLENT CRIMES BY OVER FIFTY PERCENT. TO TAKE RAMPART AND SAY, OKAY, THIS IS THE WHOLE LAPD IS ABSOLUTELY WRONG.

KERMAN>> AND I WOULD NEVER SAY THAT, BUT THE CRITICS HAVE SAID IF MAYOR RIORDAN IS GOING TO TAKE CREDIT FOR THE GOOD THINGS THAT HAPPENED ON HIS WATCH, IT'S ONLY FAIR THAT HE SHARE THE BLAME FOR SOME OF THE BAD THINGS THAT HAPPENED ON HIS WATCH.

RICHARD RIORDAN>> WELL, THINGS HAPPEN THROUGHOUT. YOU'RE GOING TO HAVE CORRUPTION IN ANY ORGANIZATION. YOU'RE GOING TO HAVE A CERTAIN AMOUNT OF BAD APPLES. FORTUNATELY, IN RAMPART, IT'S WELL UNDER ONE PERCENT OF THE LAPD. FOR ME TO SAY, OKAY, I TAKE RESPONSIBILITY, SURE, IF YOU GET RESPONSIBILITY FOR EVERYTHING, THEN GIVE ME CREDIT FOR EVERYTHING. THE BOTTOM LINE IS, IT'S A JOINT EFFORT. WE ALL WORK TOGETHER. I THINK WE MAINTAINED A GREAT CITY, WE IMPROVED THE POLICE DEPARTMENT DRAMATICALLY THROUGH TECHNOLOGY, ADDING MORE POLICE OFFICERS AND, SURE, A PIECE OF THAT WAS RAMPART, BUT A VERY TINY PIECE OF IT.

JESS>> I'M PROBABLY THE ONLY ONE SITTING HERE WHO CAN RAISE THE ISSUE OF AGE, SINCE YOU AND I ARE THE SAME AGE. (LAUGHTER)

RICHARD RIORDAN>> (LAUGHTER) RUPERT MURDOCH AND WARREN BUFFETT ARE THE SAME AGE TOO.

JESS>> AND ED RAWLINS, THE CAMPAIGN CONSULTANT WHO SAID HE CAN'T LEARN ANYTHING ANYWAY.

RICHARD RIORDAN>> WELL, I THINK HE WAS PRESIDENT MCKINLEY'S CAMPAIGN MANAGER, WASN'T HE? (LAUGHTER) I'LL TELL YOU, THE MOST FUN THING IN LIFE IS TO LEARN SOMETHING EVERY DAY. ONE THING I PRIDE MYSELF ON IS HOLDING EVERYBODY I MEET AS IMPORTANT. I DON'T CARE WHETHER THEY'RE RICH, POOR OR WHAT. FROM ANYBODY YOU MEET, YOU CAN LEARN SOMETHING AND THAT IS MY GREATEST JOY IN LIFE.

VAL>> WELL, GUBERNATORIAL CANDIDATE, RICHARD RIORDAN, THANK YOU SO MUCH FOR COMING IN.

RICHARD RIORDAN>> THANKS, VAL. THANKS, JESS. THANKS, KERMAN.

VAL>> MONDAY ON LIFE AND TIMES, THE DEBATE OVER NATIONAL ID CARDS. ARE YOU READY TO GIVE UP SOME OF YOUR PRIVACY IF IT COULD HELP FIGHT AGAINST TERRORISM?

CONNIE RICE>> IT'S AN INTERNAL PASSPORT SYSTEM IN A COUNTRY WHERE THERE IS NO PASSPORT TO HAVE FREEDOM TO MOVE, AND THAT IS A VERY SERIOUS CHANGE IN OUR FRAMEWORK OF FREEDOM.

JESS>> THE LOS ANGELES MAYOR'S RACE IS HISTORY, BUT SOME PEOPLE ARE STILL FUMING ABOUT THE ROLE ORGANIZED LABOR PLAYED IN THAT CONTEST.

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JESS>> MIGUEL CONTRERAS, A TOP OFFICIAL OF THE L.A. LABOR FEDERATION, MOBILIZED A HUGE EFFORT FOR ANTONIO VILLARAIGOSA EVEN AFTER THE POLLS SHOWED JAMES HAHN WAS LIKELY TO WIN. SOME CRITICS CLAIM THAT WAS A MAJOR BLUNDER, ONE THAT COULD UNDERMINE OR LIMIT THE UNION'S INFLUENCE WITH MAYOR HAHN. TONIGHT KERMAN MADDOX GETS THE DETAILS AS HE GOES ONE-ON-ONE WITH MIGUEL CONTRERAS. KERMAN?

KERMAN>> WELL, MIGUEL, THERE WERE MANY GOOD LABOR CANDIDATES WHO RAN FOR MAYOR. JIMMY HAHN, ANTONIO VILLARAIGOSA AND MANY OTHERS. YET YOU AND MOST OF THE LEADERSHIP OF ORGANIZED LABOR SUPPORTED ANTONIO VILLARAIGOSA. HE LOST. IN HINDSIGHT, WAS THAT A BAD MOVE?

MIGUEL CONTRERAS>> WELL, I THINK IT WAS A PROPER MOVE TO MAKE, YOU KNOW, IN HINDSIGHT. WE WENT WITH THE CANDIDATE THAT ADDRESSED THE WORKING ISSUES HERE IN LOS ANGELES AND CLEARLY WE BACKED OUR CANDIDATE AND WE WANTED TO MAKE OUR ENDORSEMENT MEAN SOMETHING. THIS WAS NOT ABOUT PICKING A WINNER LIKE A HORSE RACE. IT WAS ABOUT MAKING A WINNER.

I THINK WE SHOWED THE ENTIRE CITY AND STATE THAT ORGANIZED LABOR IS A VERY FORMIDABLE ORGANIZATION HERE IN LOS ANGELES AND I THINK IT BODES WELL FOR THE FUTURE. WE FOUGHT OUR CAPACITY IN LOS ANGELES. WE HAD THOUSANDS OF LABOR WALKERS, WE RAISED MILLIONS OF DOLLARS AND NOW WE EXTEND THE OLIVE BRANCH TO MAYOR HAHN AND WORK WITH HIS ADMINISTRATION. BUT FOR FUTURE ACTIVITIES, IT BODES VERY WELL FOR ORGANIZED LABOR.

KERMAN>> NOW DID IT HURT YOU POLITICALLY AND DID IT HURT THE LABOR MOVEMENT IN TERMS OF THEIR [INAUDIBLE] IN LOS ANGELES AND THE FACT THAT YOU WENT WITH THE WRONG GUY?

MIGUEL CONTRERAS>> NO, I THINK OUR MOVEMENT IS STRONG ENOUGH TO OVERCOME THAT. I THINK THE LABOR MOVEMENT HERE IN LOS ANGELES, AGAIN, HAS SHOWN ALL ELECTED OFFICIALS THAT WE'RE VERY SERIOUS PLAYERS IN LOS ANGELES AND WE ARE THE FUTURE OF LOS ANGELES. THE KIND OF VOTERS THAT WE HAD, WE MIGHT NOT HAVE WON IN THIS ELECTION, BUT IT BODES WELL FOR US FOR FUTURE ELECTIONS.

KERMAN>> LET'S TALK ABOUT LAX. SINCE THE TERRORIST ATTACK IN NEW YORK ON SEPTEMBER 11, MANY OF YOUR MEMBERS HAVE BEEN LAID OFF AT LAX BECAUSE THE BUSINESS ACTIVITY HAS GONE DOWN. PEOPLE SIMPLY AREN'T TRAVELING. WHAT ARE YOU DOING TO HELP THOSE WORKERS OUT?

MIGUEL CONTRERAS>> WE HAD THOUSANDS OF WORKERS LAID OFF, BOTH IN THE AIRLINE INDUSTRY AND THE AIRPORT AREA, AND ALSO IN TOURISM. WE LOST THOUSANDS OF MEMBERS IN THE HOTEL INDUSTRY IN LOS ANGELES. JUST TODAY, WE FED 6,000 FAMILIES WHO HAVE BEEN LAID OFF SINCE 9/11 WITH A BAG OF GROCERIES. WE'RE DOING HOUSING ASSISTANCE, WE'RE DOING ENERGY VOUCHERS FOR THEIR HOMES, SO WE'RE MOBILIZING A LOT OF UNIONS AND A LOT OF PEOPLE WANT TO HELP US OUT TO MAKE SURE THESE PEOPLE ACTUALLY JUST SURVIVE IN LOS ANGELES.

KERMAN>> SO YOU FEED THEM AND YOU HAVE ENERGY ASSISTANCE PROGRAMS. WHAT ABOUT CASH? PEOPLE WANT MONEY.

MIGUEL CONTRERAS>> WELL, ON A CASE BY CASE BASIS, WE'RE LOOKING AT HOUSING ASSISTANCE IN THAT AREA. I MEAN, PEOPLE WANT MONEY TO BE ABLE TO PUT A ROOF ON THEIR HEADS, SO WE'RE LOOKING AT A CASE BY CASE BASIS HOW WE CAN BE HELPFUL TO THEM IN TERMS OF RENTAL ASSISTANCE OR MORTGAGE ASSISTANCE. A LOT OF UNIONS ARE PARTICIPATING IN THIS PROGRAM.

KERMAN>> NOW THAT'S THE SHORT-TERM SOLUTION. WHAT ARE YOU DOING IN TERMS OF A LONG-TERM SOLUTION TO EITHER RETRAIN THEM OR FIGURE OUT A WAY TO GET THEM BACK TO WORK?

MIGUEL CONTRERAS>> WELL, WE THINK THAT THERE'S VERY FEW WHO ARE GOING TO GO BACK TO WORK IN THE JOBS THEY HAD, SO WE'RE LOOKING AT RETRAINING MANY IN THE LONGER SCOPE OF THINGS. WE'RE LOOKING AT THE STATE TRAINING FUNDS TO MAKE SURE THAT THE TRAINING FUNDS ARE AIMED PROPERLY AT THESE DISPLACED WORKERS AND ALSO THAT THEY ARE BEING TRAINED TO AREAS WHERE THERE ARE JOBS IN LOS ANGELES.

KERMAN>> NOW THERE WAS A REPORT IN THE LOCAL NEWSPAPER THAT SAID MANY OF THE VENDORS AND BUSINESSES AND EMPLOYERS AT LAX ARE TARGETING UNION ACTIVISTS, MEANING THEY'RE LAYING THEM OFF FIRST RATHER THAN THE LESS DOCILE WORKERS. DO YOU KNOW ANYTHING ABOUT THAT?

MIGUEL CONTRERAS>> WELL, CLEARLY, AT THE LAX, WE HAVE A PROBLEM AT LAX WHERE SOME OF THE VENDORS AND CONCESSIONAIRES WHO HAVE CONTRACTS WITH THE CITY OF LOS ANGELES ARE USING THIS PERIOD OF TIME IN TERMS OF LAY-OFFS AND WORK REDUCTIONS TO TARGET SOME UNION ACTIVISTS THERE. NOW SOME OF THE -- NOT ALL -- BUT THERE ARE SOME WHO ARE DOING THAT PRACTICE AND IT'S BEEN REPORTED IN THE PAPERS. WE WENT TO THE AIRPORT COMMISSION THIS WEEK ASKING THEM THAT, BEFORE THEY GIVE CONCESSIONS TO THESE VENDORS, THEY OUGHT TO BE ENFORCING THE LABORER'S RIGHTS HERE IN LOS ANGELES.

KERMAN>> SO WHAT DO WE DO ABOUT THESE EMPLOYERS, THOUGH, WHO TARGET UNION ACTIVISTS? ACCORDING TO THE PAPER, THEY BASICALLY HAVE FIRED PEOPLE WHO WERE BASICALLY TELLING THEIR EMPLOYEES WHAT THEIR UNION RIGHTS ARE.

MIGUEL CONTRERAS>> RIGHT, AND THAT'S WHY WE THINK THE AIRPORT COMMISSION SHOULD HOLD THESE PEOPLE ACCOUNTABLE, THESE VENDORS AND CONCESSIONAIRES ACCOUNTABLE, AT THE AIRPORT AND ASK THEM NOT TO VIOLATE THE WORKER RETENTION ORDINANCE OR ANY KIND OF LABOR LAWS THAT MIGHT BE HERE IN THIS COUNTRY.

KERMAN>> LET'S TALK ABOUT VALLEY SECESSION. IT'S BEEN RUMORED THAT ORGANIZED LABOR IS GOING TO COME OUT AGAINST THE EFFORT FOR THE VALLEY TO BREAK AWAY FROM THE REST OF THE CITY OF L.A. HAVE YOU GUYS ACTUALLY TAKEN AN OFFICIAL POSITION?

MIGUEL CONTRERAS>> WE ARE GOING TO BE IN A BATTLE FIGHT. YOU KNOW, WE'VE BEEN ASKED BY MAYOR HAHN TO JOIN HIM IN HIS BATTLE TO MAKE SURE THIS IS ONE LOS ANGELES AND WE AGREED TO THAT. YOU KNOW, WE'RE GOING TO FIGHT IT ON EVERY LEVEL. WE JUST CAME OFF AN INITIATIVE IN CARSON WHERE CARSON TRIED TO BREAK AWAY FROM THE LA UNIFIED SCHOOL DISTRICT. WE PUT A LOT OF WORKERS, A LOT OF VOLUNTEER WORKERS, WE PUT A LOT OF CASH RESOURCE INTO THAT AND DEFEATED THAT. YOU'LL SEE THE SAME KIND OF EFFORT IN THE SAN FERNANDO VALLEY. WE HAVE OVER 100,000 REGISTERED UNION MEMBERS IN THE SAN FERNANDO VALLEY AND OUR AIM IS TO EDUCATE OUR UNION MEMBERS WHY THIS CITY IS BETTER IF IT'S ONE LOS ANGELES.

KERMAN>> WELL, GIVE ME THE BEST ARGUMENT. WHAT DO YOU SAY AGAINST PEOPLE IN THE VALLEY WHO WANT SELF-DETERMINATION OR INDEPENDENCE? THEY SIMPLY SAY WE WANT TO BREAK AWAY, WE WANT TO BE OUR OWN SEPARATE CITY, WE'LL PAY OUR OWN BILLS. WHAT'S SO BAD ABOUT THAT?

MIGUEL CONTRERAS>> WELL, WE DON'T THINK IT'S BEING DONE PROPERLY, NUMBER ONE. YOU KNOW, WE THINK THAT PEOPLE ARE BEING RUSHED OFF AND WE ALSO LOOK AT WHO'S LEADING THIS FIGHT. WE TALKED TO A LOT OF RANK AND FILE MEMBERS IN THE SAN FERNANDO VALLEY AND THEY HAVE AN INTEREST IN STAYING IN LOS ANGELES. THE PEOPLE WHO HAVE OPPOSED US IN THE PAST ARE A LOT OF PEOPLE ON THE OTHER SIDE OF THIS ISSUE AND WE THINK IT'S NOT BENEFICIAL TO WORKERS -- NOT JUST WORKERS -- BUT TO RESIDENTS IN THE SAN FERNANDO VALLEY, SO YOU'LL SEE OUR CAMPAIGN AIMED STRICTLY IN THE SAN FERNANDO VALLEY TO EDUCATE OUR UNION MEMBERS THERE.

KERMAN>> LET ME ASK YOU ONE FINAL QUESTION. IN THE MARCH PRIMARY OF 2002, IT'S BEEN TOLD TO ME THAT ORGANIZED LABOR SUPPORTS THE EFFORT TO EXTEND TERM LIMITS FOR ELECTED OFFICIALS. WHY IS ORGANIZED LABOR INVOLVED IN THE EFFORT TO GIVE POLITICIANS MORE TIME?

MIGUEL CONTRERAS>> WELL, WE THINK THAT THE TERM LIMITS IS WAY TOO SHORT AND WE THINK THAT THE VOTERS GET CHEATED IN SACRAMENTO WHEN WE SEND ASSEMBLYMEN FOR SIX YEARS AND THEN OUT. THEY NEED TIME TO BECOME EXPERTS. THEY NEED TIME TO MAKE SURE LEGISLATION GOES THROUGH. SO WE JUST THINK THAT WE NEED TO BE ABLE TO HAVE PEOPLE REPRESENT US IN SACRAMENTO WHO ARE REALLY VERSED IN THE LEGISLATURE'S ACTIVITIES. WE'VE TRIED TO EXPAND IT BY ONLY FOUR YEARS, BUT IT HAS TO GO BACK TO THE VOTERS. IT'S NOT AN AUTOMATIC EXTENSION. IT HAS TO GO BACK TO LOCAL VOTERS TO MAKE A DECISION AND WE WANT THAT LOCAL DECISION HELD THERE.

KERMAN>> THE RACE FOR GOVERNOR. IF YOU HAD TO HANDICAP IT, RIORDAN, DOES HE WIN THE NOMINATION AND, TWO, IF HE DOES, CAN HE BEAT GRAY DAVIS?

MIGUEL CONTRERAS>> WELL, I THINK, CLEARLY, THE REPUBLICANS WOULD BE WISE TO GET BEHIND MAYOR RIORDAN. I THINK HE'S THE BEST CHOICE THAT THE REPUBLICAN PARTY HAS FOR THE STATE OF CALIFORNIA. HE'S SHOWN WHAT HE CAN DO HERE IN LOS ANGELES. HE'S BEEN A VERY DECENT MAYOR FOR MANY PEOPLE IN LOS ANGELES AND WE IN ORGANIZED LABOR WORKED VERY WELL WITH HIM IN LOS ANGELES.

KERMAN>> CAN HE BEAT GRAY?

MIGUEL CONTRERAS>> WELL, IF I KNEW THE ANSWER TO THAT QUESTION, I'D MAKE A LOT OF MONEY. (LAUGHTER)

KERMAN>> ALL RIGHT. VERY GOOD. MIGUEL CONTRERAS, THANK YOU VERY MUCH.

MIGUEL CONTRERAS>> THANK YOU.

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JESS>> ECONOMIC TIMES HAVE BEEN TOUGH FOR MUCH OF THE COUNTRY IN THE WAKE OF THE TERRORIST ATTACK AND LOS ANGELES IS NO EXCEPTION. UNEMPLOYMENT NUMBERS HAVE BEEN RISING AND SO HAS THE CITY'S ANXIETY LEVEL.

VAL>> BUT ARE WE ABOUT TO GET A BREAK? A NEW ECONOMIC FORECAST PRODUCED BY THE SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS OFFERS SOME ENCOURAGING NEWS. THE FORECAST DOES CITE SECTORS OF THE CALIFORNIA ECONOMY THAT HAS TAKEN THE WORST HITS, BUT IT ALSO POINTS TO AREAS THAT ARE LIKELY TO GAIN.

JESS>> JOINING US NOW, MARK PISANO. HE IS EXECUTIVE DIRECTOR OF THE SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS. AND UC IRVINE ECONOMIST, PETER NAVARRO, WHO'S WRITTEN A NEW BOOK CALLED "IF IT'S RAINING IN BRAZIL, BUY STARBUCKS: A GUIDE TO PROFITING FROM EVENTS IN THE NEWS".

GENTLEMEN, THE SCAG REPORT IS NOT EXACTLY HOPEFUL, BUT CALIFORNIA, AND SOUTHERN CALIFORNIA PARTICULARLY, ARE GOING TO FARE BETTER THAN THE REST OF THE COUNTRY, ARE THEY NOT?

MARK PISANO>> THAT IS CORRECT, JESS. WE HAVE PARTNERED WITH CAL STATE UNIVERSITY OF LONG BEACH AND CAL STATE FULLERTON, WHO HAVE DONE ECONOMIC FORECASTS JUST OF THE SOUTHERN CALIFORNIA REGION. THE CONCLUSIONS THAT THEY HAVE DERIVED FROM THEIR STUDIES ARE THAT SOUTHERN CALIFORNIA, CONTRARY PROBABLY TO THE REST OF THE STATE AS WELL AS THE REST OF THE NATION, IS UNLIKELY TO FALL INTO A RECESSION NEXT YEAR.

OUR GROWTH ISN'T GOING TO BE AS LARGE AS IT'S BEEN IN THE PAST. WE'VE HAD UP TO THREE PERCENT AVERAGE GROWTH OVER THE LAST SEVERAL YEARS. THEY'RE INDICATING THAT THE GROWTH WILL NOT BE AT THAT LEVEL. IT WILL BE MUCH LOWER, ONE PERCENT, AND IN SOME OF OUR COUNTIES EVEN LOWER THAN THAT. BUT THAT DOESN'T MEAN THAT WE'RE GOING TO FALL INTO A SITUATION IN WHICH WE'RE LOSING JOBS, AND THE REASON BEING IS THAT WE HAVE AN INCREDIBLY BALANCED ECONOMY AND, SECONDLY, WE HAVE SOME SECTORS THAT ARE DOING WELL. ENTERTAINMENT BEING ONE. I MEAN --

VAL>> -- ENTERTAINMENT IS DOING WELL? BECAUSE I HAD HEARD THAT THEY WEREN'T PRODUCING MUCH AT ALL AND THEY WERE IN TROUBLE.

JESS>> THE BOX OFFICE FIGURES WOULD SUGGEST IT'S DOING WELL.

VAL>> OH, MAYBE THE BOX OFFICE VERSUS --

MARK PISANO>> -- AND THE NEED FOR PRODUCT, ETC. AND WE AVOIDED THE STRIKES AND WE'RE PUTTING TOGETHER ACTIVITY IN THAT PARTICULAR SECTOR, AS WELL OUR SERVICE SECTOR SEEMS TO BE CONTINUING. IN MANUFACTURING, WE'RE DOING NOT AS WELL AND IN TOURISM AND AVIATION-RELATED ACTIVITIES WE'RE DOING VERY POORLY. IN FACT, WE RECENTLY JUST TODAY COMPLETED A STUDY WHICH INDICATES THE AMOUNT OF LOSSES IN THAT AREA AND THAT MAY EVEN TAKE SOME OF THE BLOOM OFF OF -- I WON'T CALL IT THE ROSY FORECAST, BUT THE NOT DISMAL FORECAST FOR THE REGION.

VAL>> PETER, IS THERE ALSO A DIFFERENCE BETWEEN SHORT-TERM AND LONG-TERM? THERE'S ALL SORTS OF DIFFERENT WAYS OF LOOKING AT THE FUTURE.

PETER NAVARRO>> THERE IS, AND I'M LESS BULLISH BECAUSE OF TWO REASONS. ONE, BASICALLY, THE STATE AND LOCAL GOVERNMENTS ARE GOING TO SUFFER VERY SEVERE BUDGET SHORTFALLS AND THAT MONEY THAT THEY DON'T HAVE IS MONEY THAT DOESN'T GET SPENT, THAT DOESN'T GET INJECTED INTO THE ECONOMY AND IT HAS A PRETTY SIGNIFICANT RIPPLE EFFECT. THE OTHER THING THAT REALLY NO REPORT CAN ASSESS AT THIS POINT RIGHT NOW IS WHAT I CALLED THE TERRORIST TAX.

EVERY BUSINESS IN THE COUNTRY RIGHT NOW IS GOING THROUGH THE DECISION AS TO HOW MUCH PRODUCTIVE CAPITAL, WHICH IS USED FOR NEW PLANT AND EQUIPMENT, TO DIVERT TO PROTECTIVE CAPITAL, WHICH IS SECURITY GUARDS, THE FENCING, THE SOPHISTICATED SURVEILLANCE TECHNOLOGY. MY CONCERN, BASICALLY, IS THAT, AS YOU DIVERT PRODUCTIVE TO PROTECTIVE CAPITAL, IT ACTS LIKE A TAX, A TERRORISM TAX, ON BUSINESS WHICH, AS YOU ADD THAT UP OVER THE WHOLE ECONOMY, IT DEPRESSES THE ECONOMY. THAT'S GOING TO BE A VERY SIGNIFICANT HIT NATIONALLY AND REGIONALLY.

JESS>> DOES YOUR ASSUMPTION AND YOUR STUDY FACTOR IN THE DECREASE IN GASOLINE PRICES, WHICH HAS GOT TO BE HELPFUL, MAJOR DECREASE IN GASOLINE PRICES? AND ALSO THE PUBLIC ATTITUDE ABOUT THE SPEED WITH WHICH THE WAR AGAINST TERRORISM SEEMS TO BE SUCCEEDING CERTAINLY IS REFLECTED IN THE STOCK MARKET.

PETER NAVARRO>> THAT WILL CERTAINLY HELP IT, BUT WE ARE IN FREEFALL. WE'RE BEYOND ANY PARAMETERS IN NORMAL TIMES. LET ME JUST GIVE YOU A LITTLE EXAMPLE OF THE DIFFICULTIES LOCAL GOVERNMENTS ARE GOING TO FACE. SAY IN ANAHEIM, FOR EXAMPLE. IT'S TAKEN A VERY, VERY HEAVY HIT FROM A LOSS OF TRANSIT OCCUPANCY TAX FOR HOTEL ROOMS AND THEIR BUDGET IS HEAVILY DEPENDENT ON THAT. AT THE SAME TIME, THEY'RE GOING TO BENEFIT BECAUSE BOEING, FOR EXAMPLE, HAS OPERATIONS THERE WHICH ARE GOING TO SEE INCREASED DEFENSE EXPENDITURES.

BUT THE PROBLEM FROM LOCAL GOVERNMENT'S POINT OF VIEW IS THAT, EVEN THOUGH THAT MIGHT BE A WASH, TOURISM DOWN, AEROSPACE UP, LOCAL GOVERNMENT CAN'T CAPTURE THE REVENUES BECAUSE MOST OF THEIR REVENUES COME JUST FROM THAT ONE SECTOR, OKAY? SO SAN DIEGO IS GOING TO FACE THAT PROBLEM, CITIES LIKE ANAHEIM, AND ALL THE WAY UP ON THE COAST. THEN, OF COURSE, NORTHERN CALIFORNIA IS GOING TO DO MUCH WORSE BECAUSE THEY'RE DOT COM-DEPENDENT AND THEY'RE MUCH MORE TOURIST-DEPENDENT.

JESS>> THE TOURISM FACTOR BECAUSE OF -- THERE ARE CITIES SUCH AS DANA POINT WHERE I LIVE WHERE A THIRD OF THE CITY'S BUDGET IS BASED ON ROOM TAX, HOTEL ROOM TAX, SO THAT'S --

MARK PISANO>> -- JESS, WHAT PETER HAS SAID AND YOUR OBSERVATION IS ON TARGET AND WE'VE INDICATED -- I MEAN, THIS REPORT POINTS OUT THAT THE AMOUNT OF INCOME FROM TAXES IS GOING TO BE REDUCED FROM ABOUT TEN PERCENT TO THREE PERCENT THIS YEAR.

VAL>> WOW, THAT'S HUGE.

MARK PISANO>> WELL, THOSE ARE VERY SUBSTANTIAL REDUCTIONS AND THESE REPORTS DO INDICATE THAT DECLINE. WHAT THEY ARE NOT ABLE TO EXPLICITLY FACTOR IN IS THE KINDS OF CHANGES THAT PETER IS TALKING ABOUT. HE CALLS IT THE TERRORISM TAX. OTHERS HAVE CALLED IT THE TRANSACTION COSTS. IT TAKES US MORE TIME AND IT COSTS MORE MONEY TO MOVE A PERSON OR A PIECE OF GOODS. HOW THAT GETS REFLECTED INTO THE ECONOMIC STRUCTURE, WE DON'T KNOW YET. THEREFORE, THESE REPORTS INDICATE THAT WE'RE NOT LIKELY IN THIS REGION TO FALL INTO A RECESSION. THEY STILL INDICATE WE MAY HAVE GROWTHS, BUT THE OBSERVATION THAT PETER IS MAKING IS THAT THAT GROWTH MAY NOT BE AS LARGE AS WE'RE TALKING ABOUT.

THE IMPORTANT PART ABOUT THESE REPORTS ARE THAT SOUTHERN CALIFORNIA'S ECONOMY, BECAUSE WE DIVERSIFIED IT SO MUCH, WHEN WE WENT THROUGH THE DEFENSE DOWNSIZING, WE HAVE SO MANY DIFFERENT SECTORS THAT WE AREN'T RELIANT ON ANY SINGLE SECTOR FOR OUR ECONOMIC GROWTH. EVEN THOUGH GOVERNMENT EMPLOYEES HAVE BEEN PART OF THE REASON FOR OUR GROWTH, THEY'RE NOT GOING TO BE THE REASONS OVER THE NEXT SEVERAL YEARS. IN THE LOCAL BUDGETS AND THE STATE BUDGETS, WE'RE GOING TO SEE LESS GOVERNMENT SPENDING LOCALLY, BUT WE MAY SEE MORE FEDERAL SPENDING, SO SOME OF THESE THINGS BALANCE OUT.

JESS>> GENTLEMEN, VERY INTERESTING.

PETER NAVARRO>> IT'S A PLEASURE.

JESS>> MARK PISANO, PETER NAVARRO, THANK YOU BOTH FOR BEING WITH US.

VAL>> THANKS SO MUCH. THAT'S OUR PROGRAM FOR THIS EVENING. THANK YOU SO MUCH FOR WATCHING.

JESS>> NOW FOR ALL OF US HERE AT LIFE AND TIMES, HAVE A GREAT WEEKEND.

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