Commission grills experts in hard-hit Nevada

LAS VEGAS – Nevada had unrealistic growth expectations before the nation’s financial meltdown battered the state’s tourism industry and erased billions of dollars in real estate equity, an economist told a federal commission examining the causes of the recession.

“The state was overbuilt and some 100,000 jobs were predicated on a level of growth and consumer spending that seemed to evaporate almost overnight,” Jeremy Aguero, an economist for Applied Analysis, told representatives of the 10-member Financial Crisis Inquiry Commission on Wednesday.

The group questioned bank executives, analysts and public officials during a daylong hearing at the University of Nevada, Las Vegas, as part of a series of public hearings to gather testimony for a formal report due Dec. 15.

Vice Chairman Bill Thomas, a Republican former congressman from California, said the commission created by Congress was seeking testimony to deliver to Wall Street bankers and others “who have no real on-the-ground knowledge of the suffering that goes on in a number of areas.”

“Laying the record is very important,” Thomas said.

The expert panels included sworn testimony from U.S. Attorney Daniel Bogden and others with expertise in the Silver State, where foreclosures, bankruptcy and joblessness pace ahead of every other state in the country.

When asked by commissioners why prosecuting mortgage fraud wasn’t a bigger priority in Nevada, Bogden’s answer echoed the sentiments of many who have struggled during this recession.

“We’ve tried to do the best we can with the resources we’ve got,” he said.

Phil Satre, chairman of both slot machine maker International Game Technology and utility NV Energy Inc., said he thinks Nevada is at the “bottom of the food chain” in terms of financial recovery, depending on other states such as California to drive tourism spending in Las Vegas and other destinations.

Satre was on a panel of business leaders who spoke about diversifying the industries in the state, which Thomas repeatedly referred to as “maturing” Nevada’s economy.

But William Martin, chief executive of Service 1st Bank of Nevada, said people have tried to diversify Nevada’s economy for decades, but the number of jobs created in other industries have paled in comparison with casino openings.