Not Leaving Las Vegas

Unemployment in Nevada is now 14.4 percent, the highest in the nation and a stark contrast to the 3.8 percent unemployment rate here just 10 years ago; in Las Vegas, it is 14.7 percent.

August was the 44th consecutive month in which Nevada led the nation in housing foreclosures.

The article is here and it details other grim aspects of the city's economy.  This is a simple yet effective example of the current non-separability of aggregate demand and structural problems.  Demand in Las Vegas is ailing and businesses are complaining of low sales.  Yet this is a sectoral shift as well, resulting from especially bad local housing problems, lower travel demand from outsiders, and a growing desire for investment safety rather than gambling risk.  Las Vegas needs for the United States to have higher real asset values, not just higher nominal aggregate demand.

It is a mistake to require that the sectoral aspect of the explanation postulate an offsetting boom in some other city or some other non-travel, non-gambling sector; that is one sectoral theory but not the one which applies today.


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