Las Vegas in spotlight of national economic commission

By Buck Wargo

Fri, Sep 17, 2010 (3 a.m.)

Two Las Vegas residents are helping garner national attention for Southern Nevada’s economic woes that resulted after the nation’s financial collapse.

Las Vegas attorney Byron Georgiou and Heather Murren, co-founder of the Nevada Cancer Institute, are two members of the bipartisan Financial Crisis Inquiry Commission.

The two were behind getting Las Vegas as a venue last week for one of four national hearings on the local effects of the recession.

Congress created the commission in 2009 to examine the cause of the financial meltdown in 2008 that prompted a federal bailout of banks and Wall Street firms.

In the past year, the commission has held hearings in Washington, D.C., and New York to examine the causes of the global crisis. It has dealt with issues such as subprime lending practices, financial derivatives, credit rating agencies and the concept of banks being “too big to fail.”

“The purpose of this hearing was to focus on the local Nevada impacts on the financial crisis from the business community and bankers to those in gaming and tourism,” Georgiou said.

The Las Vegas meeting will be included in a December report. Georgiou said he hopes Congress and President Barack Obama will heed its recommendations.

Even though Congress has approved financial reform legislation, Georgiou said more improvements and changes can be made to prevent a reoccurrence of the meltdown.

“There is plenty of blame to be shared by the people we relied on to keep our economy safe and secure,” Georgiou said.

Testimony has ranged from admissions of errors that led to the crisis to the crisis coming up like a storm, with those testifying on the storm aspect claiming they didn’t have any responsibility, Georgiou said.

“We have heard from executives in charge of the Wall Street financial institutions that failed or would have failed but for the bipartisan infusion of extraordinary assistance from our government to avoid the even more severe consequences to our economic system that could have occurred if we failed to provide the assistance.”

Georgiou said the local hearings such as the one in Las Vegas focused attention on ordinary Americans who bore no responsibility for the creation of the crisis, but suffered its consequences.

That fallout includes the decline of the Las Vegas housing and commercial real estate markets that triggered foreclosures, lowered prices and brought construction to a near halt. It has made it difficult for businesses to obtain loans and resulted in fewer people visiting Nevada and less money spent here.

“Our economy depends heavily on tourists from all over the world coming to enjoy our many attractions, we have been particularly impacted by this crisis, which has pinched worldwide pocketbooks, leading to fewer people being able to afford to visit and reduced spending by those who can afford to come.”

Murren said it was important to include Las Vegas in the schedule because there’s no substitute from hearing from those most affected.

“We’ve seen the backside of that significant impact from the slowdown in the national economy on our region,” said Murren, who added it will help formulate a better report.

“I think we’re going to probably identify five or six broad causes and contributing factors,” Murren said. “The deteriorating lending standards played a serious rule in the crisis.”

Murren said the seeds of the crisis were sown many years ago, leading to the housing bubble and collapse.

Las Vegas deserved to have the spotlight put on it because not all housing markets saw the run-up in prices and busts such as Southern Nevada’s, Murren said. That was one reason the fallout was felt so severely in Las Vegas.

“Individuals and businesses had some overly optimistic assumptions about the future and our market,” Murren said. “There were a lot of fraudulent elements in the mortgage market that led people to homes they can’t afford.”

Even though financial reform legislation has passed, Murren said that hasn’t closed the book on the issue because regulations have to be made to enforce that legislation.

Tax credits and other measures to stimulate businesses will also be discussed, she said.

In other news

The North Las Vegas Chamber of Commerce has announced its lineup for its Directions 2010 — Strategies for Tomorrow, an economic forecasting event at 8:30 a.m. Oct. 14 at Texas Station. John Restrepo, principal of Restrepo Consulting Group will give his economic outlook. Other speakers include Jeffrey Geihs, vice president and chief operating officer of the Public Education Foundation; Jamie Naughton, cruise ship captain for zappos.com, and Mark Mix, president of the National Right to Work Committee.