Not Even Easing Will Be Easy

The media has been speculating that the Federal Reserve may soon undertake a third round of quantitative easing—or QE3, in economist-speak. The Fed would buy about $500 billion worth of 10-year treasury bonds—with freshly printed money—from banks and other financial businesses. The hope is that after selling off these bonds to the government, the banks will turn around and lend more money for business expansion and consumer credit purchases at historically low interest rates.

What would this mean for the Great Recession’s most famous punching bag, Las Vegas? Unfortunately, QE3 is unlikely to spur much lending or new economic activity here, says UNLV economist Stephen Brown. Regardless of how much money is pumped into the system and however low interest rates go, it’s still a bad lending environment. Brown’s surveys have found that banks and business owners lack confidence in the economy’s ability to support investments.

“That’s somewhat true on a national level,” he says. “But not nearly as true as it is here in Southern Nevada.”

It’s something of a psycho-economic vicious circle: Until we believe in the economy, all attempts to improve it will face steep odds. Las Vegas once had boundless faith in its ability to rebound from pretty much anything; after the last half-decade, even the Fed will have a hard time buying that confidence back.

Suggested Next Read

Pigskin Country

Pigskin Country

The nearest professional team is almost 300 miles away. The local college team, with its one winning season since 1995 and its ghost town of a stadium, might as well be, too. And yet at this time every year, Las Vegas is flush with football fever—so much so that you can reasonably argue ours ranks among the most passionate football communities in America. Rather than Cheeseheads and Terrible Towels, our football heritage is distinguished by parlay cards and betting tickets. So for our 2012 Football Issue, we're embracing our culture with a behind-the-scenes glimpse into the wagering world. Meet the men behind the counter who set the odds, as well as the men on the other side of the counter who try to beat those odds—and they offer tips on how you can, too. And as for our Rebels, we've got some ideas on how to fill up the stadium—and the win column.