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Where Were You in '79? Chances Are Your Life Was a Little Simpler 20 Years Ago, Though Not Everything Was Rosy in the Era of Inflation and the Ayatollah

After just opening his public relations agency in 1979, Ron Rogers got a new client who had just acquired a candy factory.

Inspired by the movie "Willy Wonka and the Chocolate Factory." Rogers dressed the new owner in a blue velvet suit and top hat, and arranged to have him take kids on tours through the factory.

Today, the very thought of such a gambit makes Rogers cringe.

A kid on such a tour might get snatched by a kidnapper, or slip and fall. A factory worker might get distracted and get a hand caught in a conveyor belt. The producer of "Willy Wonka" might sue for copyfight infringement. An unscrupulous parent might sue the factory owner, claiming that his or her child was sickened by eating some bad candy. A fringe group might claim blue velvet suits are representative of a particular lifestyle, similar to that attributed to a certain "Teletubbies" character.

These threats might seem remote, even ridiculous. But they are sufficient to give people like Rogers pause. And that demonstrates the extent to which our world has changed over the past two decades.

"There's a lot more crazies out there today," Rogers said. "Today, you're looking at much more of the down side of doing things as you are the up side."

A simpler time

In 1979, we did not know how easy it could be or how hard it would get. We did not have the convenience of personal computers or cell phones. We had no Internet, no e-mail, no voicemail, no laptops, no Palm Pilots. We faxed some, but mostly we wrote letters and used couriers.

If communication took several days, we waited. What could go wrong? The economy - built on manufacturing, aerospace and finance - was strong. Of course there were mega-mergers 20 years ago, but not for anything approaching today's valuations and usually not resulting in wrenching consolidations. Business relationships lasted decades, if not lifetimes. If a lender quoted you a financing rate, it was firm, and it stayed firm for years. Savings and loans were trustworthy.

"Life was simpler," said Walter Beran, retired chairman of Ernst & Young. "The pace was not quite as fast. Everybody had a little more time for their community and to be friendly and neighborly. And everybody was optimistic."

The local economy was, indeed, a source of great optimism. In 1979, L.A. unemployment was running at 5.53 percent, down from 6.85 percent in 1978 (and roughly where it stands today). Per-capita annual income had climbed to more than $10,883 from $9,535 in the previous year. Real estate values, after a troubling recession between 1974 and 1976, were soaring.

"There was a huge demand to buy real estate as a hedge against inflation," said Jerry Katell, president of Katell Properties, who remembers projecting monthly rental rates of 75 cents per square foot for properties he was developing, only to have the buildings yield rentals of $1 by the time they were done. "We were off to the races," Katell said. "Literally, my whole net worth was made right around then."

The development frenzy that began in 1979 laid the groundwork for the devastating collapse of the real estate market that lasted through the first half of the next decade and beyond. But in 1979, the events that would bring L.A.'s economy to a screeching halt had yet to surface. Los Angeles had a thriving retail economy fueled not by national chains, but by local bulwarks, like Bullock's and The Broadway. The banking community was intact, including such heavyweights as Home Savings of America, Security Pacific National Bank, Glendale Federal and First Interstate. Aerospace also was soaring. In 1979, Hughes Aircraft Co. announced plans to build a new plant in El Segundo.

But all was not idyllic.

The downside

The troubles in Iran had found their way to the local community when student protesters storming the residence of Shah's sister set brush fires through Beverly Hills. Gasoline was expensive. Inflation was running at 9 percent nationally and 6.9 percent in Los Angeles County, and home mortgage rates had soared as high as 11 percent.

Even so, no one thought about sexual harassment in the workplace. Smokers could light up wherever they pleased, including airplanes, and radio traffic reports ended at 6:59 p.m. each weeknight. The Bee Gees were on the top 10 music charts. "Rocky II" played in the movie theaters. And the raciest thing on TV was a young Brooke Shields cooing about what doesn't come between her and her Calvin Klein jeans.

There was no appearance of AIDS.

Even crime had a different cast. While gang- and drug-related violence was becoming a staple, police in 1979 were also chasing the likes of Disco Dan, a bank robber so named for his attire and his habit of hailing cabs to make his getaways - a far cry from the North Hollywood bank robbery bloodbath of 1998.

"It was an age of more innocence," said Mike Zugsmith, chairman of Capital Commercial/NAI, which opened its doors in 1979.

Less hassles, less to learn

Business was easier - in a "build it and they will come" sort of way. The sophistication, access to capital and management acumen crucial to launching a business today was virtually unheard of in 1979.

Real estate brokers trying to establish themselves could operate out of their car trunks. They could reach decision-makers directly, just by cold calling. "We had what you referred to as the threshold theory," said Bill Lee, who started up his brokerage, Lee & Associates, in 1979. "You didn't make presentations to clients. You didn't have engagement letters like you do today. If you took (prospective tenants) through the threshold into the space, you were the broker of record."

Developers did not have to grapple with environmental issues. Entitlements were easier to get. Land was plentiful and cheap - running at about $4 a square foot. Jerry Snyder, president of J.H. Snyder & Co., paid $16 million for Museum square on Wilshire Boulevard, including 10 acres of land. For another $4 million, he bought an additional eight acres where he developed the Wilshire Courtyard complex. "It wasn't a prime neighborhood," Snyder recalled. "A lot of lenders wouldn't lend there."

Banks did not have to concern themselves with foreign currencies or international letters of credit. Apparel was made right here in town. Those manufacturers who did source goods from elsewhere still operated within the confines of the domestic marketplace. "Twenty years ago, only a handful of our clients sourced their goods from abroad, where today a much larger percentage of our clients are doing business beyond our borders," said Norman Creighton, vice chairman and chief executive at Imperial Bank. "We have to have a very active foreign exchange and international department to facilitate the movement of goods."

Fewer technological Innovations

There was little need to keep up with the latest technology, because there wasn't a whole lot. Brokers made maps for clients by taking a Thomas Bros. guide to the Xerox copier, and then putting orange stickers on the appropriate locations. Everyone called Ma Bell for phone systems and service. "The funny thing about selling a phone system back then was, the biggest obstacle was making sure people knew that what we were doing was legal," said Mark Cramberlin, director of national accounts at Inter-Tel Technologies Inc., an independent phone systems vendor.

Banks and other giant corporations leased time on mainframe computers from companies that provided such services. If you were lucky and sophisticated enough to have a personal computer, it was not likely to be of much help. Just ask Larry Kimbell, professor of business economics at UCLA's Anderson School and co-director of the Anderson forecast until he retired last month.

Kimbell recalls that in those days there were three PCs in the entire school of business management. He had one of them, a North Star that cost $5,000 without the monitor (which he bought separately for another $1,300). "The poorest screen imaginable today is much better than that was, and it had 32,000 bytes of memory, which is probably less than a Barbie doll," Kimbell said.

Attorneys dictated letters into dictaphones. Secretaries (they were not executive assistants and there was one for each attorney) typed and retyped correspondence several times until it was correct. "The correcting Selectric typewriter was the height of technology," said Christopher Bisgaard, managing partner at Lewis, D'Amato, Brisbois & Bisgaard LLP.

If technology was far less sophisticated, so were we. We made a lot less money and we spent it differently. There were very few six-figure salaries. Attorneys started at about $16,000 a year. Successful real estate brokers were pulling down, on average, about $50,000.