We Could Be Losing Our Place in the Sun.

Bush's New West, South emerge as leaders of growth

Two decades ago -- to the horror of the liberal establishment in L.A. and elsewhere -- a conservative administration took command as the nation headed into recession.

The new leaders undertook a bold program featuring tax cuts, boosts in the defense budget and reductions in social spending. The result was one of the greatest economic booms ever experienced, particularly here in Southern California.

However, the pending right-wing revival in Washington may have more mixed blessings. Unlike Ronald Reagan and his California conservatism -- with its heavy emphasis on defense spending and curtailed government -- the new conservative regime under George W. Bush reflects more of a Texas sunbelt mentality that is often hostile, or at best indifferent, to the concerns of California.

But what has changed the most is not the nature of conservatism, but Southern California itself. Two decades ago, we were still the linchpin of the sunbelt, the mecca of entrepreneurial capitalism, and home to the two great, conservative leaders of the late 20th century, Richard Nixon and Ronald Reagan. Southern California was not solidly Republican, but it was still a critical piece of the GOP's electoral strategy.

And back then, a broader sunbelt growth ideology transcended party designations. Unlike today, many Democratic legislators, as well as virtually all Republicans, were pro-military, since so much of our economy depended on Pentagon largesse. Good union jobs were at stake at the defense plants, and many Democrats also worried about other blue-collar jobs, such as those in construction, which impacted their views on some workplace and environmental issues.

And, we were part of a fast-growing region in a fast-growing state. Both the old Confederacy -- Texas, Florida, North Carolina and Virginia -- and the emerging New West on the other side of the Sierras looked naturally to California for leadership and role models. Today, depending on their politics, those regions are more likely to look at us as hopelessly immoral, corrupt or just dysfunctional.

On a statistical basis, certainly we have faded in comparison with the two other regions. As economist David Friedman has pointed out, the base of Bush's tiny political majority lies in states -- both in the old sunbelt and the New West -- that have grown far more rapidly than California.

In the 1990s, he points out, Texas, Florida, North Carolina, Colorado, Nevada and Arizona, all Bush states, outgrew California in terms of job production by 50 percent or more.

Of course, some of this growth, one can argue, was in low-wage jobs, particularly in tourism dependent Nevada and Florida. Yet the South and the New West today are no longer economic or technical backwaters. In fact, these regions have enjoyed some of the most robust high-tech growth in the last decade.

Indeed, although California has recovered from the doldrums of the early 1990s, it has not recovered the momentum that characterized the state and region during the Reagan era. That's particularly true here in L.A.

The greatest growth in high-tech jobs during the decade, for example, took place not in the Golden State but in Texas, Georgia and Colorado.

These states are now players in the new economy in a way they were not in the 1980s. They are no longer resource-driven backwaters -- dependent on oil, tobacco or peanuts -- as in the past. They have become leaders in many high-tech fields, from biomedical research to computer hardware and software.

More importantly, high-end workers are migrating to these regions. Three of the top 10 regions in terms of per capita: software employment -- Raleigh-Durham, Huntsville, Ala., and Austin, Texas - are in the Old Confederacy. Two others, Boulder and Colorado Springs, Cob., are in the New West. None of the top 25 are in Southern California.

This emerging high-tech South and New West are the real powers behind Bush. Oil, energy and agriculture interests may have been most fervent for him, but they were joined by people like Michael Dell and the rest of the powerful Texas tech community. Al Gore may have won some support from Silicon Valley sophisticos, but outside of California and the Northeast, high-tech went heavy for Bush.

For Southern California, adjusting to this reality suggests a need for attitude adjustment. We have to understand that the new regime is not a bunch of Bible-thumping bumpkins but rather quite sophisticated about economic growth and technological development. Their real power base does not really care as much about prayer in school, cotton or tobacco subsidies, as about improving school scores, landing the prime research contracts for new defense projects, and getting the bulk of new commercial high-tech jobs.

If California wants to coexist or thrive under this new administration, we will have to decide whether we are still part of the sunbelt. Increasingly, in our political and economic structure, as economist Friedman has. pointed out, we increasingly resemble not the growth parts of the country but the Northeast.

This can be seen in everything from a highly bifurcated labor force -- divided increasingly between high-end and low-end service workers -- to economic and environmental policies that are distinctly anti-business and anti-growth.

The problem with Southern California becoming like the Northeast is that in critical ways we are not like them. We are still growing demographically, and we cannot afford the kind of elitist steady state economy that might be able to sustain low-growth states like Massachusetts, New York or Pennsylvania We desperately need new infrastructure and capacity, as is being painfully demonstrated by the current energy crisis.

In some senses, the Bush victory gives us a chance to build an economy that can sustain our population growth, particularly among Latinos. And tax cuts, if focused heavily on working and middle-class people as opposed to the elites], could help us get past a recession and provide needed stimulus for our tired entrepreneurial economy.

You don't have to be a Republican, and I am not one, to look at the Bush regime as an opportunity. We can seize the day and rejoin the sunbelt boom, or simply rue the new day and wait for the Democrats to take over in five years. But in the process we may find ourselves increasingly relegated, as many Texans and others would wish, to the fringes of the American growth economy.

Joel Kotkin is a senior fellow at the Davenport Institute for Public Policy at Pepperdine University and research fellow at the Reason Public Policy Institute.