The first quarterly economic forecast of the year from the UCLA Anderson School of Management predicts sluggish growth nationwide, but not a recession, in 2008.
UCLA Anderson released the quarterly economic forecast Tuesday at a conference for academic, business and government leaders at the Millennium Biltmore Hotel in downtown Los Angeles.
Problems within real estate, such as the sub-prime lending mortgage crisis, continue to cause problems for the economy “as the home mortgage crisis becomes a credit crisis,” according to a university press release.
The economy has “become enveloped in an ever widening and deepening credit recession, as distinguished from an economic recession, that is working to constrict borrowing to all but the most credit-worthy borrowers,” said David Shulman, UCLA Anderson Forecast senior economist.
Due to recent credit losses of more than $150 billion, lenders are now hesitant to give loans.
Russell Goldsmith, CEO of City National Bank, one of the largest banks in Los Angeles, was the keynote speaker at the economic forecast conference.
Goldsmith said California is not getting its fair share from the federal government.
California gets 79 cents for every dollar sent to Washington, D.C., Goldsmith said.
Other states, such as Texas, are getting one dollar for every dollar sent, Goldsmith said.
If California received the same proportion that other states received, it would receive $50 to $52 billion more per year, which could be used to invest in improving and creating roads, levies, and bridges, Goldsmith said.
Goldsmith also said that Californians need to call for federal enforcement of intellectual property rights.
The lack of federal enforcement hurts California given its large technology and entertainment industries, Goldsmith said.
Lack of federal enforcement of intellectual property rights has decreased billions of dollars in trade revenue, Goldsmith said.
He also called for a second economic stimulus package to tackle more long-term issues that would be funded by taking away tax breaks for oil companies.
Goldsmith chaired the Los Angeles Economy and Jobs Committee formed by Mayor Antonio Villaraigosa to come up with recommendations to strengthen economic growth in Los Angeles.
He spoke about recommendations of the committee, which included improvements to Los Angeles International Airport, expanding the Port of Los Angeles and revitalizing South Los Angeles.
One recommended improvement to LAX would include adding one daily international flight, which would add $600 million in economic output and 3,000 jobs, Goldsmith said.
The committee recommends land in South Los Angeles be used for mixed-use development, including new retail space, warehouses, and small-business space.