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| Margaret Carlson: Bankers should shoot craps in Vegas |
| Margaret Carlson / May 17, 2009, 00:33 IST |
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What happened in Washington stayed in Washington as Las Vegas came to dig itself out of the hole President Barack Obama dug for the city earlier this year.
About the time the scoundrels of Wall Street were getting billions in bailout money yet continuing to meet with clients in the luxurious ways to which they had become accustomed, Obama warned the bankers not to go to Las Vegas “on the taxpayers’ dime.”
If you put aside collateral damage to a city already suffering from a 29 per cent drop in convention business, Obama was providing excellent advice. Any banker who wants to hold a convention at a casino is more clueless than we imagined. After being deregulated, banks could easily be mistaken for the Golden Nugget, only with a rate of return slightly worse than that of your average craps player.
Problem is while giving up Las Vegas might help the rehabilitation of bankers, it is bad for the temple of showgirls, the 24-hour all-you-can-eat buffet and Wayne Newton. Obama’s remark goes to the paradox of the economic crisis: It looks ugly to be spending money when people are suffering, but money has to be spent to stimulate the economy if the suffering is to eventually be alleviated.
SALTING THE WOUND
For Las Vegas, Obama’s warning was salt on an open wound. Tens of thousands of hotel reservations have been cancelled in a city where unemployment was already at 10 per cent. Citigroup Inc and Wells Fargo & Co abandoned plans for meetings there. Goldman Sachs Group Inc, sensitive enough to appearances that it now forces many employees to stay at an Embassy Suites, moved a planned technology conference to San Francisco. After Obama’s comment, 402 meetings were called off at a cost of $166 million to the city, according to the tourism authority.
Las Vegas Mayor Oscar Goodman who played himself in Martin Scorsese’s movie “Casino” and doubles as chairman of the city’s industry tourism board, called the president’s statement “outrageous” and demanded an apology.
He got one of sorts from Obama’s press secretary, Robert Gibbs, who said, “I don’t think the president said, ‘Don’t go to Las Vegas,’” and from senior adviser Valerie Jarrett, who met with the owners of the Strip’s biggest hotels and took them in for a quick meeting with the president. Obama even plans to go to Las Vegas himself later this month to attend a fundraiser for Senate Majority Leader Harry Reid, a Nevada Democrat.
VEGAS ON HILL
Yesterday, Las Vegas went to Capitol Hill to plead its case before Senate commerce tourism subcommittee Chairwoman Amy Klobuchar. It’s hard to conjure sympathy for a group that bleeds its customers dry in the best of times. Still, there are all those people who moved to Nevada in search of the American Dream, which turned out to be a double-shift at the Sands and a house an hour away in the desert. Some 16,000 people working in tourism in Nevada have lost their jobs, foreclosures are everywhere, and some employers are fighting to stay solvent.
While Goodman couldn’t come, he sent the chief executive officer of the Las Vegas Convention & Visitors Authority, Rossi Ralenkotter. Determined to show that what’s good for Las Vegas is good for America, Ralenkotter argued for his city to be taken off the Do Not Visit list if those companies getting federal assistance were to comply with “federal meetings guidelines,” which define what are “excessive” and “luxury” expenditures for those getting taxpayer aid.
Here’s the conundrum: Innocent victims of the recklessness of Wall Street will lose again as wretched excess gives way to budget motels, Chinese takeout and middle seats in coach to a non-resort destination, killing jobs in travel and lodging.
RECLAIM THE GLORY
The solution is to let Las Vegas reclaim economic glory with conventions of doctors and salesmen. And let the once-rich and powerful bankers meet at a Holiday Inn near Hoboken.
The only way the architects of credit-default swaps should get to Las Vegas is as part of a job-retraining programme. Let Timothy Geithner call them on their constant threats to leave and take jobs elsewhere if they don’t get their multimillion-dollar bonuses.
What better way to apply skills acquired gambling away billions of the public’s money than as croupiers.
The only thing they will have to learn is what it’s like to be regulated. Enforcement on the Strip is a lot tougher than anything in Washington.
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