JOHN L. SMITH: We all knew we were in a recession; only NV Energy still doesn't get it - News

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Dec. 02, 2008
Copyright © Las Vegas Review-Journal

JOHN L. SMITH: We all knew we were in a recession; only NV Energy still doesn't get it

JOHN L. SMITH
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Like the blind wise men who finally get around to correctly identifying the elephant, the National Bureau of Economic Research declared Monday that the U.S. economy is in recession -- and has been since last December.

Of course, millions of Americans knew with certainty the nation was in recession on Feb. 28. That's the day hapless President George W. Bush kept intact his perfect record of failed prognostication when he said, "I don't think we're headed to recession. But no question, we're in a slowdown."

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Headlines across the country echoed Bush's fully informed misjudgment of undeniably alarming current events. Canaries were keeling over throughout the American economic coal mine, but Bush was oblivious. (As an aside, I'd like to have the "Bush was oblivious" T-shirt concession. Talk about a way to beat the recession.) There was an ongoing presidential campaign, and the Bush administration downplayed the warning signs and foundering economic indicators.

To hear the right-wing media and political demagogues tell the story, all talk of recession was a figment of the Democrats' imagination. Rising unemployment figures, record mortgage foreclosures, rocketing gasoline and grocery prices, and free-falling housing construction starts were all part of some sinister Democratic campaign strategy.

When historians finish studying Campaign '08, they'll note that the GOP's "Deny the Undeniable" economic strategy made U.S. Sen. John McCain look hopelessly out of touch with working people everywhere. And he suffered a body blow when his top economic adviser, Phil Gramm, arrogantly postured in July, "You've heard of mental depression; this is a mental recession. We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline ..."

But economists back in February said they believed the country was in or close to recession. It wasn't a question of whining; it was a matter of job loss, rising gasoline and bread prices, and crushing home foreclosures. Now the academic experts from the Bureau of Economic Research, a private, nonprofit research outfit, have weighed in and measured the recession's official statistical start time.

It's something most Nevadans could have pegged without the benefit of an advanced degree.

Unemployment last month rose to 7.6 percent statewide, according to the Nevada Department of Employment, Training and Rehabilitation. But the trouble signs are darker still. The once high-rolling construction industry is sputtering badly. In this state, the health of the building trade is directly linked to the health of the economy.

While housing sales in Nevada might appear to some experts to have bottomed out, the challenge is separating the standard sales from the distressed sale of foreclosed properties. Home Builders Research reported in November that new home sales were down 46 percent.

Nationally, building permits to date in 2008 dropped 14.5 percent, the biggest tumble in 24 years. Locally, a mere 329 building permits were issued in Southern Nevada in October.

But you don't need an armload of statistics to know you're in recession. And it's an insult to working people to split hairs on the subject.

When you start using your credit cards to cover basic necessities, you're officially in the neighborhood of recession. I hear from people every week who survive by robbing Visa to pay MasterCard.

When you wake up one morning tossed from your home or find your residence flanked by empty houses, you don't need someone with an economics Ph.D to tell you this is a large, long-term problem. When it comes to finding a solution to our economic quagmire, neither side of the political aisle has much credibility.

The "official recession" story wasn't Monday's only news flash. We also learned that NV Energy, formerly Nevada Power, is seeking a 14.9 percent rate increase overall, which would amount to a 17.5 percent increase for residents. This request comes in the face of the worst economy in decades at a time when many thousands of Nevadans are barely holding on and thousands more are slipping under.

As of June 2007, the company's CEO and chairman at the time, Walt Higgins, received $4.9 million in salary and other compensation. Senior Vice Presidents Donald "Pat" Shalmy, Roberto Denis and Jeffrey Ceccarelli received $1.4 million each.

Now that we're officially in a recession, someone in authority should tell NV Energy to get stuffed.

"Tell NV Energy to get stuffed."

That slogan is sure to sell some T-shirts, too.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith/.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Terryray wrote on December 11, 2008 07:11 AM: RJ certainly did cover Smith's bankruptcy http://www.lvrj.com/news/10499382.html and Smith wrote about it a few times in his column too. And let's see your fiscal responsibility after you face the fiscal onslaughts Smith has faced. Still, Smith does take some stupid cheap shots in the column above, with silly anti-intellectual snobbery contrasting of stats with anecdotal stories about poor downtrotten workers. Predictable column of the sort I've seen hundred times. smithisbankrupt wrote on December 03, 2008 02:02 PM: Thank you, Terri. Mr. Smith has made a career telling the stories of other people; both the 'good and the bad.' So a little public display about Mr. Smith's peronal experiences is cetainly fair. It is very interesting that I don't recall reading anything in the RJ about his bankruptcy, but they sure make a note about other prominent citizens' money problems (for example the recent Molasky bankruptcy filing). And I hope you recognize your ignorance, or perhaps just plain stupidity, in pointing out my lack of social graces makes you 'rude and inconsiderate'too. no one important wrote on December 02, 2008 08:29 PM: We need to have PEOPLE respond to this filing, in person, via internet and phone. They will approve this if we don't fight through "their" regulatory channels! "Tell NV Energy to get stuffed." We'll start an on-line petitition by Friday, 11/05, and post on new LVRJ article. The t- and sweat-shirts are an excellent idea! My suggestion is 17.5% increase on the front (huge question mark) and when was the last time your raise was 17.5% on the back... Alternative (personal attack) is 17.5%? That's 10 years employment at a fortune 500 corp (or 2.5 as CEO)... Done for tonight... greedattheexpenseofratepayers wrote on December 02, 2008 07:48 PM: If the commission approve a rate increase for this company then shame on them. Here they had the funds to pay themselves the high salaries, use these fund to pay for their increase in cose of doing business, why she the users have to pay for these high raises and salaries. If this rate increase is approved then shame on the commission for allowing it at our expense. really wrote on December 02, 2008 03:44 PM: Maybe the CEOs of the company should work for a dollar for the next five years, just to help pay for the new power stations! Besides I think that the housing boom in Vegas is done, so where are they building them and what for??? Mamamia wrote on December 02, 2008 02:26 PM: Mr. Smith, Sir, Thank you for saying what so many of us wish we could say to the idiots of the Nevada Electric Company, or to use their new name, NV Energy. Wonder how much it cost to change their name? I bet it was in the millions! Of our money no doubt! Talk of robber barons! Carol Dripps wrote on December 02, 2008 01:53 PM: I'd buy, sell and wear the get stuffed tee shirts. It would be a great money maker for childrens charities. What's in a name? wrote on December 02, 2008 01:35 PM: NV Power likes to think they are the smartest people in the room. Ultimately, if you think they give a rats ... about the customer, your giving them character they don't have. NV Power has the worst reputation in the power industry, across the country, but specifically on the west coast. This company is still exhibiting Kenneth Lay business philosophies. It's all about money, and to heck with the environment and customers. I object to the PUC constantly enabling this organization, without regard to to the rate payor. Nobody talks about that elephant in the room. Terri wrote on December 02, 2008 01:21 PM: Smithisbankrupt: You are rude and inconsiderate. Smithisbankrupt wrote on December 02, 2008 01:11 PM: Wow, fiscal commentary from a guy who filed bankruptcy.... Read All Comments