Monday, March 19, 2012

Will Sandoval's Bet Pay Off (for Obama)?

One line often used by Brian Sandoval's administration when asked about the state budget is that "we'll grow our way out", suggesting that future economic recovery and growth will fill up state coffers enough to avoid future program cuts or tax increases. Did Moody's just confirm what "Governor Sunny" has been saying all along?

Hotel numbers in particular are looking better, Moody's said in a report Monday titled "Las Vegas Strip Gaming Recovery Brightens."

The report notes several improving trends in 2011, including a 4.3 percent rise in Las Vegas visitor volume from 2010 thanks largely to the improving U.S. economy. Nearly 40 million people visited Las Vegas in 2011, close to the city's 2007 peak.

Moody's noted that in 2011 there was a 3.5 percent increase in slot machine revenue and a citywide 3.4 percentage point increase in hotel occupancy, to 83.8 percent, the first increase since 2007. [...]

''The improvements are supported by low growth in hotel room supply [since no new hotel-casino projects are set to open any time soon], which gives (existing hotel) operators more pricing power,'' Moody's said in its report.

"After suffering through a deep trough during the recession when visitor volume declined as new capacity came online, the Las Vegas recovery is under way," Peggy Holloway, a Moody's vice president - senior credit officer, said in a statement. "Hotels are benefiting from increased visitor numbers that permit higher room rates, while gaming revenues are recovering, albeit more slowly."

And the good news isn't limited to The Strip. Las Vegas' oldest hotel is apparently feeling confident enough about Las Vegas' comeback to make a big investment Downtown.



And since Clark County contributes 80% of what goes into the state budget, Sandoval's inner circle must be doing the happy dance today. After all, their scheme budget plan depends on strong economic recovery. They need strong economic recovery to avoid another budget shortfall that could rip apart Sandoval's delicate plan.

However, whoever's monitoring Nevada for the RNC should hold off on doing any happy dance. Remember, gaming and tourism numbers on The Strip rise and fall with the state of the overall American economy. And remember who will be blamed/credited most with the state of the overall American economy.

Well, we know what the economy is escaping from: the Republican commitment to make America fail. And we are approaching escape velocity because of the captain of this ship: President Barack Obama. How do I know that this is not just a coincidence? Look at the sectors of the economy that added the most jobs.

The president invested in students by expanding Pell grants and student loans, and people could go to school to get skills. The president did everything in his power get consumers back to buying - through his American opportunity tax credit, the payroll tax cut and prior to that the Making Work Pay tax credit, and by guiding the economy through the worst times since the Great Depression. Consumers are buying again, and businesses are hiring again for various professional services is growing. The economy added 82,000 jobs in business and professional services last month, and 1.4 million since September 2009.

Consumer confidence is helping people do other things, too: like eat out more, go on vacations more, etc. The food services and hospitality industries added 44,000 jobs in February. Since its low point in February 2010, food services has added over a half a million jobs.

The president's health care reform invested in training health care professionals and providing health care facilities and providers with the incentive to focus on patients instead of just profits. Health care reform created incentives for utilizing primary care. Last month, health care and social assistance jobs grew by 61,000. Over the last year, health care employment has grown by 361,000.

And last, but perhaps most significantly, manufacturing. In an economy where manufacturing is growing for the first time since 1997, American manufacturers added 31,000 jobs in February, bringing the total manufacturing jobs growth over the last two years to 444,000.

In the mean time, the people who would love for the economy to turn back are doing everything they can to tear it down. Mitt Romney is flip flopping on - and is now against - raising the minimum wage. You know, because Heaven forbid the working poor have more money that they can spend in the economy, thus accelerating growth even more. John Boehner is busy lying about "tax increases" and trying to spin the jobs recovery into not-good-enough-ism. Yet more Republicans are beating the one-trick-pony of drill, baby, drill, while domestic production is up, foreign oil dependence is down, and energy independence is within greater reach thanks to President Obama.

Funny enough, Governor Brian Sandoval (R) may have President Barack Obama (D) to thank the most for the turnaround in Nevada's gaming and tourism numbers. Thanks to the Recovery Act, the payroll tax cut, the Affordable Care Act, and the expansion of student financial aid, which were all policies President Obama championed and the bulk of G-O-TEA Congresscritters crapped upon, the national economy is improving. And as the national economy continues to improve, more Americans in other parts of the country will have more disposable income available to spend on a Las Vegas vacation.

So strangely enough, Brian Sandoval's good fortune is turning out to be Mitt Romney's bad luck. And both Mittens' campaign and the RNC are still trying to find a way to stop us from noticing the improving economy.

[...F]rom the moment Obama took office, the GOP seemed intent on stressing one theme: He made [the economy] worse. This was an easy one for them. Even though Obama took over during a crisis that began under his Republican predecessor, it was only a matter of time before voters held him accountable for their economic anxiety. That’s just how it works for presidents, who get too much credit for strong economies and too much blame for weak ones. And given the depths of the crisis he inherited, there was no way Obama was going to be presiding over a healthy economy for most of his first term.

This allowed Republicans to spend 2009, 2010 and 2011 shaking their heads while pointing to one discouraging piece of economic news after another, lamenting how Obama’s “failed” policies had ruined the country. As cynical as this was, it was basically effective, as the 2010 midterms showed.

But the past few months have produced the best economic headlines of Obama’s presidency. Since September, unemployment has declined ever month, and it now sits at its lowest level since Obama’s first full month in office. And this week, the Dow crossed 13,000 and the Nasdaq reached a 12-year high. The hopeful signs have had a clear effect on Obama’s popularity, with his approval rating and standing against potential Republican opponents improving along with the economy.

Increasingly, Obama’s message has shifted from promising that his policies will eventually work to bragging that they are working, while Republicans have been forced to deemphasize “He made it worse!” and adopt “It could be better!” as their mantra. The recovery is tenuous (and so are Obama’s polling gains), but for the moment, the roles have been reversed and it’s Obama who now has the stronger message on the economy.

So perhaps Brian Sandoval ultimately will be at least let off the hook somewhat as The Las Vegas Strip roars back to life... But he can't escape the fact that he at least owes some credit to President Obama and his policies that aided the national economic recovery. So Nevada Republicans shouldn't get too giddy just yet (even as Nevada Democrats try to figure out just how feasible running against Sandoval will be in the next two years).

1 comment:

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