Optimism, tempered by realism at Preview Las Vegas

By Alexandra Berzon

Friday, Jan. 30, 2009 | 2 a.m.

At last year’s Chamber of Commerce cheerleading session known as Preview Las Vegas, local business leaders suggested the looming recession could be prevented by pretending it didn’t exist.

“If we keep saying ‘recession,’ then we’ll have a recession,” said Rossi Ralenkotter, president and chief executive of the Las Vegas Convention & Visitors Authority, jokingly adding that the word should be banned.

This year the worsening downturn was well documented and impossible to ignore.

Local economic consultant Jeremy Aguero paced the Thomas & Mack Center stage, rapidly repeating the numbers.

Half of all homes in the Las Vegas Valley are worth less than their mortgage and it will take more than two years to work through the region’s inventory of short-sale homes. To make up Nevada’s budget shortfall without raising taxes, Aguero added, the state could eliminate its entire higher education system and still need to cut hundreds of millions of dollars more.

“These are real times and they are difficult times. This financial crisis is affecting us here as much as anywhere,” he said.

While organizers of this year’s event tried to evoke the neon-lit illusion of cheer Las Vegas does so well, those addressing the roughly 500 people gathered Thursday sounded at times as if they were leading a group therapy session.

“We’re going to get through this,” Ralenkotter said. “We’re going to make sure we market our way through this. We are going to stay No. 1. We are positive and we are the best.”

Look on the bright side, Ralenkotter and others said. Sure, tourist spending is down. But there will still be 295,000 visitors in town for the Super Bowl. It’s as if the entire population of Omaha, Neb., were to visit Las Vegas this weekend.

Aguero also sought to cast some of the sobering numbers in a positive light.

Sure, 9 percent of the state’s workforce is unemployed, but that means 91 percent still have jobs. It’s true 15,000 of our homes are owned by banks, but 730,000 are still owned by residents.

“When we close our eyes and imagine where it is we would rather be ... it’s worth remembering our growth,” Aguero said. “We have lost growth that other communities never had.”

The LVCVA’s latest challenge is selling a product — a destination — synonymous with good times, when times are not good.

“One thing we’re finding is the consumers are not using the ‘vacation’ word,” Ralenkotter said. “ ‘Vacation’ is something people really don’t want to say. They don’t want to be accused of conspicuous consumption when their cousin or neighbor is laid off and they may be worried about losing their own job.

“What they’re saying is they want to take a break. What we’re going to do is give them permission to take a break.”

Locals should do their part, too, Ralenkotter said, by taking a weekend getaway to a local resort.

“You can be your own economic stimulus,” Ralenkotter said. “We need to have a positive attitude going forward.”

But by the time the stage was turned over to UC Berkeley professor of public policy Robert Reich to explain the national economic picture, a positive attitude was a stretch.

The labor secretary under President Bill Clinton ran through his analysis of the root causes of the financial crisis, laying much of the blame on former Federal Reserve Chairman Alan Greenspan and pointing to the decreasing wages of middle class Americans and the encouragement to consume that caused so many to fall into debt.

“I don’t want to be gloom and doom,” Reich said. “I’m going to be very cheerful as I say this: The problem now is we’re in a vicious cycle. As people lose their jobs, they don’t have the money they need to buy anything, and as more people don’t have money to buy goods and services, that means less and less demand and more layoffs. And you can see the vicious cycle getting worse and worse.”

Reich was careful to end on a positive note, predicting that with federal economic stimulus the economy will begin to rebound in a little over a year or so.

“Let me close on optimistic words,” he said. “I can tell you’re almost suicidal.” The good news, he said, is that there has never been a better time to reevaluate life and priorities.

“The silver lining here is that many people are saying to themselves, ‘Maybe I have to take a look at my life and really ask myself what I want to do. Do I need all this stuff?’

“Maybe this is a chance to really think about where I am. The economy is really not the most important thing in the world. It’s our families, our sense of integrity, our enjoyment of life.”

Plus, Reich said, there’s always this article of faith: “Everything that goes down eventually goes up.”