MY COLUMN: The economy is getting better, but the fundamentals and the politics are not

News item: Nevada’s unemployment rate falls to 7.7 percent, the lowest it has been in six years. Nevada ranks second in the country for the percentage change in its jobless rate over the last year – 2.3 percent

Modern Nevada was built on a fantasy, so it’s no surprise that the recovery, or “comeback” as Gov. Brian Sandoval calls it, has been based on an illusion.

Among the magicians who have become expert at the sleight of hand necessary are lawmakers, especially Democrats, who have posed as the loyal opposition while being complicit in executing the subterfuge.

The latest economic numbers are like those signs touting 97 percent slot payouts: It’s technically accurate but the truth behind the advertisement reveals a much different reality and exposes what suckers most people are.

Nevada leaders, as they have for decades, treat the state’s residents as patrons in a casino, plying them with intoxicating promises (Economic development is here! We will fix the tax structure!) in the hopes they will keep playing the same game with poor odds and inevitable results.

This is a state where incrementalism is de rigueur, where long-range vision is oxymoronic, where the past is always, always, prologue. Just once, I’d like to be surprised, to declare, “Wow. I didn’t see that coming.”

Economic booms. Painful recessions. Tax studies. Gubernatorial/legislative promises. Lather, rinse, repeat.

To be fair, the economy is improving. To be honest, it had nowhere to go but up.

Here's a statistic that doesn't lie: Nevada's jobless rate puts the state at third highest in the country. Don't ask any of your elected leaders to tell you that one.

Gubernatorial Chief of Staff Mike Willden ticks off positive economic indicators, including that jobs have been added for 42 consecutive months and that the state has added 46,200 jobs in the last year.

“I believe we are making great progress as a state,” Willden, channeling his radiant boss, said. “The economy is improving…more jobs are available…more jobs will become available… we are diversifying our economy.”

That last point is not just debatable; it seems wishful thinking. And as for the jobs, Nevada remains 100,000 below the pre-recession peak, with the new ones mostly low-wage, hardly evidence of a protean economy.

But Jeremy Aguero, the numbers man who has been analyzing these trends for many years, points out that while the unemployment rate is not the most illustrative number of an economy’s health, “Arguably more important than the drop in the jobless rate, the labor force remained relative stable dropping by only 0.2 percent during the past 12 months. This is consistent with expectations, as many older workers age out of workforce. At the same time, industrial-based employment was up 3.8 percent with every major sector of the economy reporting increases, save mining and information. Construction, which has been the laggard and is clearly a reflection of investment activity was up 9.8 percent. This, combined with the fact that unemployment insurance claims fell again in June (-3 percent) and have fallen for 19 straight months only underscores the economy’s marked improvement.”

Yes, as John and Paul might have said, things are getting better all the time. But as John McCain should have said, the fundamentals of the economy are not sound. Or at least they are relatively unchanged.

In an otherwise sunny statement, Gov. Brian Sandoval warned, “Although this positive news is welcomed, we must remain vigilant in our economic development efforts to continue moving Nevada forward.”

This is where I draw the line.

Make no mistake: The governor’s economic development czar, Steve Hill, has assembled a remarkable team, and they have been sounding the right notes, finding some quality emigrants.

But Nevada remains relatively immutable when you dig down to the basics: A state overwhelmingly based on a gaming economy that is now, more and more, looking for opportunities in places with foreign or IP addresses.

And as the last recession confirmed, so long as the state remains dependent essentially on one sector of the economy for its future, the cycle simply will continue to repeat itself.

Sandoval’s commitment to economic diversification and his willingness to wrest control of the state’s apparatus while fundamentally restructuring it makes sense. But he has yet to implement any transformational policies beyond bringing his immense personal charm and welcoming nature to bear.

The underlying numbers for the economy, like the ones they don’t tell you about those clanging slots, are not robust. Quite the contrary.

“Over the medium- to long-term the unemployment rate means something when comparing to job growth. It doesn’t mean much in the short term,” another experienced economist, John Restrepo said. “The 'U-6' rate which includes forced part time workers and discouraged workers, at the of Q1 2014 was 17.4 percent. Since Las Vegas represents the lion’s share of jobs and population, we can reasonably assume that U-6 for LV is north of 12 percent.”

And, Restrepo added, “Job growth is getting better but the equally important indicator of wages and income is still stagnant, after adjusting for inflation, for the 99 percent.”

That is, the economy has not only not been transformed by mythical economic development changes, it is the same as it ever was. And not going anywhere fast.

The counter to this – also quite hoary – is that the governor and his 63 handmaidens need to be steady hands on the tiller, not veering off an estabished route so the ship of state doesn’t wind up on the shoals. Doing little is doing well. But a captain and crew who follow the same, circular route over and over inevitably will end up where they begun, wondering why they never went anywhere.

Most governors and Legislatures have applied the Hippocratic Oath’s core to state economic policy. But “do no harm” is myopic and, yes, damaging.

Frankly, patience is no longer a virtue for those who have seen the same problems for decades and not acted boldly and decisively. And I fear the incentive is not there for Sandoval, who clearly wants to leave a legacy of dramatically changing the state’s course but has yet to address the underlying structural deficit in the state’s economy.

The Democrats did not challenge Sandoval during the 2013 session and have left him with only a Goodman rather than a good man or woman in 2014. (Historical note: By the time Sandoval leaves, it will have been 20 years since the Democrats had one of their own in the mansion. They have earned the wilderness.)

Without any opponents in government or on the campaign trail, Sandoval will not talk about the one-dimensional tax structure or force a discussion of the state’s lack of a culture that appreciates the value of lower and higher education. It will be the vacuous “Continue the Comeback,” which right now is a return to nowhere.

The Democrats have capitulated, allowing Sandoval to crush them, by opposing The Education Initiative and presenting the same idea they always do: Wait ‘til next session! So Sandoval, benefitting from a recovering economy that as much as any state ebbs and flows with the vicissitudes of the national economy, gets credit for baby steps such as policies affecting teacher hiring and firing and $50 million to help, but hardly solve, the state’s great education challenge: the surging population of English Language Learner students in the early grades.

Hey, it’s s start! Indeed. But where is the finish?

This is why cynics through the years have lamented the lack of a real political debate, homogenized by a one-party system, whether you call it The Gaming Party, The Establishment Party or The Do-Nothing Party.

As usual, I hear the whispers of a possible bipartisan tax deal in the next session, where both sides will come together to chart a more stable course for the future and the governor may even be a part of it.  I’ve seen this movie before and I know how it ends: Policies of incrementalism, shrill anti-voices given too much credence, faux action instead of real progress.

I still have hope, perhaps the definition of insanity. I believe Sandoval might be more open-minded than people think and that a few key lawmakers really want to risk their jobs to change business as usual.

A few days before Sandoval is re-elected and most of the same folks are returned to Carson City, Nevada will mark its sesquicentennial. Wouldn’t it be nice after 150 years to be able to celebrate something real?

(Image from