Turning point

The World Bank now estimates that for the first time since World War II, the global economy will shrink this year. The slow down that began in December 2007 in the United States has now become what the head of the International Monetary Fund is calling "The Great Recession."

American eyes are fixated on Washington where each week plans costing billions and even trillions are launched or modified. But as the L.A. Times Business section noted this morning, "The $787-billion stimulus package that President Obama signed into law is a drop in the bucket for a world economy that produces $78 trillion in goods and services each year."

That turns out to be the flip side of the bounty of globalization which kept down inflation and brought all of us access to big screen televisions. As Thomas Friedman wrote this week, "We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese … We can't do this anymore."

If Friedman is right, the economic downturn is not a cyclical event that we will "recover" from in a year or two. It is a fundamental shift away from a debt-fueled consumer economy to . . . well, it is a little early to tell.

Here in Ventura, we remain insulated from the harshest signs of the economy "falling off a cliff" as Warren Buffet observed this week. But we are deeply affected by the unfolding crisis. Today, we delivered to the City Council our "Redesign Plan" for creating a "leaner and greener organization" to deliver the results that matter most to Ventura residents. It is a two-year budget plan for operating within available resources. The plan reduces expenses by $11.4 million through reducing compensation, staff and services to the community. It puts highest priority on protecting public safety and proposes sweeping changes in the way we do business. One of the most significant changes involves looking ahead to a more sustainable model for prosperity. For too long, cities have chased sales tax dollars in fierce and expensive competition with neighboring communities. But we can't do this anymore. We need to refocus our attention to the high wage, high value jobs that generate the wealth that supports the retail sector. Ventura's Redesign Plan reorganizes and refocuses our efforts to meet the challenges of the new economy. Given the high cost of doing business in coastal California, we must take advantage of the assets we have. Last year, Fortune Small Business"scoured the country for towns that combine a great business environment with alluring leisure offerings" and put Ventura on their "Top 100 Places to Live and Launch." Can globally competitive companies thrive in this environment? Look at Patagonia, recently featured on the cover of Fortune as "The Coolest Company on the Planet." Sales last year? Nearly $300 million worldwide. Not bad for a Ventura-based company whose mission is to "Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis." Can their success inspire others? It already has -- including companies like Walmart and GE whose top corporate officers have made pilgrimages to the company's headquarters to learn more about their policies and practices. And it can inspire a different approach to economic development -- looking forward toward an emerging economy instead of backward at the one now in deep crisis.