Vegas Rolls Snake Eyes

June 18, 2010

by Al Doyle

In a cratering economy where excessive spending combined with falling tax revenues has led to serious financial troubles for local, state and federal governments, one city stands out for its manic boom to bust cycle.

Las Vegas - the capital of gaudiness and vulgarity - may be the ultimate metaphor ofwhat America has become. Imagine an area with an economy based entirely on gambling, recreation and vice, and you have Vegas.

Little more than a bump in the road in the 1930s, Vegas grew and flourished following World War II. The city's steady expansion came as affluence and the financial capability to go on vacations became a way of life for the growing middle and upper-middle class.

Setting the moral implications aside for a moment, it's understandable how a nation can support one Las Vegas-style town with an economy that produces nothing of lasting value. What happens when America's wealth-producing industrial segment is deliberately destroyed by treasonous deals such as NAFTA and GATT and mounds of bureaucratic regulation?

Other cities and states decided to follow the Vegas model and legalized their own casinos as factory and foundry jobs went overseas. Commentators logically predicted the decline of Vegas, as everyone understood that only so much money could be spent on gambling.

Just the opposite happened. The smaller casinos served as a minor league feeder system of sorts for Vegas, as the smaller venues whetted the appetites of a new and larger generation of gamblers. The city and the bottom lines of Nevada casinos grew faster than ever.

Former factory and assembly line workers from other states poured into Las Vegas for work. Laid-off machinists and other skilled tradesmen became card dealers, while their wives and girlfriends served drinks or (in some instances) worked as strippers. Was America better off making things of value or hitting on 16 in blackjack and watching poker tournaments grow into a national obsession?

The boom in casino building - so grand that $1 billion projects were considered mundane - was accompanied by an insanely speculative housing bubble. Keep in mind that soaring costs for homes was being paid by those in the lower-paying service sector, and the seeds for a collapse of monumental proportions were being planted and watered.

Where is Vegas today? Numerous half-built casinos and resorts sit abandoned on desert acreage. If anything, the housing sector is as bad or even worse.

Nevada now has the highest percentage of homeless residents of all 50 U.S. states. Official unemployment of 14.2 percent in Vegas (and 13.7 percent overall in Nevada) vastly understates the problem, as those numbers don't include the many long-term unemployed legal workers who are no longer eligible for unemployment payments and the tens of thousands of illegal aliens who passed out flyers for X-rated clubs and other low-wage jobs.

The official rate for the percentage of homes with a negative equity is 65 percent, but some estimates sayless than 20 percent of the homeowners in Vegas have any stake in their properties. The zombie is gushing blood and staggering, but he refuses to admit his impending demise.

One Vegas resident who chooses to remain anonymous described the situation in the city of make believe and24-hour vice. He said, "Las Vegas is a goner. The homeless population is out of control. Real estate is far worse than I have seen in the media. The towers of condos are 95 percent vacant with zero activity.

"When I ride the streets, they are deserted, a big change from 2006. Rooms and restaurants have been closing for years even as they finished the new projects. The entire town is a skeleton staff providing substandard service and decaying properties. I still work for one of the majors. When the next wave hits, there is nowhere to cut."

It's all too easy to heap scorn on sleazy Las Vegas as it wallows in economic ruin, but the gambling capital of the world isn't dramatically different than the rest of America. If anything, Vegas is just a forerunner for what is coming on a broader scale.