It's sort of difficult to quantify the importance of the "paisley underground" scene of early-80s Southern California. It seemed as though most of the associated groups released a terrific debut and then lost the plot, putting out records that were neither artistically nor commercially successful. (The exception being the Bangles who slicked up their sound and became pop stars.) However, this small scene's influence on independent rock was crucial. In the early 80s, the year-zero, destroy-everything mentality of punk was still prominent. Post-punk artists were loath to trust any music made before the Ramones debut, especially if it had the taint of "hippie." Bands like the Dream Syndicate and Rain Parade showed by example how to embrace the music of the 60s without retrogressive trappings, thus expanding the sonic palette of indie rock. It's arguable that the mid-decade breakthroughs by R.E.M., Hüsker Dü and the Replacements would not have been possible had the paisley underground bands not set precedent. It's even been said that J Mascis listened to a lot of True West in between Deep Wound and Dinosaur.
On the other hand, there's a direct lineage from the paisley underground to alt-country, so nobody's perfect.
The Rainy Day album is not the best artifact of the scene (see the Dream Syndicate's Days of Wine and Roses for that) but it's a neat one. Spearheaded by David Roback of Rain Parade and Opal (and later of Mazzy Star), the album was a "super session" of various members of paisley underground groups paying direct homage to their influences, covering songs by Bob Dylan, Buffalo Springfield, the Who, Hendrix, the Velvet Underground and 70s ringer Big Star as well as "covers of covers" by way of the Beach Boys and the Byrds. Not all of the performances are top notch but all are enjoyable and the Bangles' Susanna Hoffs' take on Dylan's "I'll Keep It With Mine" might be the definitive version.
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