Kate Marshall and Elliott Parker discuss their new book about Nevada in the downturn and (hopefully) beyond
UNR economist Elliott Parker likes to tell this joke:
Doctor: I’m very sorry, but you only have six months to live.
Patient: Oh my gosh, what should I do?
Doctor: Marry an economist.
Patient: Will that help me live longer?
Doctor: No, but those six months will feel like an eternity.
Parker certainly didn’t want reading his first book, Nevada’s Great Recession (University of Nevada Press, scheduled for release this month), to feel like an eternity. So he wisely recruited his wife and former Nevada treasurer, Kate Marshall, to spice up his economic treatise on the 2008-2010 economic crisis with her first-person accounts of turmoil and damage control in Carson City.
The result is unexpectedly emotional, an invitation to see the recession from the perspective of two people who fervently believed they knew what needed to be done, but, despite their positions of relative knowledge and power, watched — often helplessly, like the rest of us — as the freight train of foreclosure and unemployment flattened their state. It doesn’t hurt, from a literary standpoint anyway, that the economic story coincides with the Marshall-Parker relationship story. In the wake of the mortgage meltdown, the state treasurer began consulting the economist (among others) for urgently needed budget and finance advice. But, over the course of the book, and the recession, the two divorcees become friends and eventually marry.
They visited Nevada Public Radio in June to talk about the book, how it came about, who it’s for, and why it’s still an important read.
The book goes back 10 years and traces events up to last year, often through your own previous writing. What inspired you to gather it all into one work?
Parker: Kate and I wrote a series of 12 to 14 columns in 2015, after the debacle of the 2014 election, and then I wrote a couple more on my own that year. I felt like there was a coherent story we were telling in these columns. And that alone made me start thinking about the book.
Then in considering what matters for Nevada, I thought the Great Recession was a very interesting story, because Nevada suffered more than any other state, and the recession was very difficult for us to get out of.
So the columns that I had written were addressed to the people of Nevada and the legislators of Nevada to help them understand. I thought they could be made into a coherent story, so I approached a few publishers and got lucky very soon.
Reading the book, I got a feeling similar to the one I got watching the movie The Big Short: nausea. I wondered if you thought about that — that people might be adverse to reliving this horrible time.
Marshall: I think we felt that if we didn’t reflect on what had happened, then what’s a small state to do? You’re in the throes of a worldwide crisis. How can you manage the state to its best for its citizens when there is a lot you can’t control? We talked a lot about what other countries were doing. What did Ireland do? What did Israel do? What did Belgium do? What did other states do? How come there were other states that grew faster and quicker out of this than we did? So if you’re getting the brunt of the financial crisis bearing down on you, what can you do? That’s what we were trying to address, and the only way to address it is to begin to ask, What are the parts that made up that crisis that bore down on us?
You don’t present the story of Nevada’s recession in standard economic history form. For instance, the main narrative is punctuated with what you call “treasurer’s vignettes,” first-person reflections full of dialogue. Where did those come from?
Parker: Yes. During the Great Recession, over a period of four to five years, I had written a number of articles on a certain number of themes, as Kate said. We talked about the housing markets, and budgets, and economic growth, and other issues that economists care about. There are nine chapters in the book, and the first six are all mine, in terms of the basic structure. I took my columns and put them into these categories: the overall view of Nevada, higher education, the budget, what’s going on at the federal level, etcetera. But Kate had all of these experiences about what was happening at that time, so she would write a story about something she told me about or that we talked about — sometimes I was totally surprised by what she wrote — and we would insert that as a vignette. And then we would write an introductory section for each chapter about where we are now, what it looks like from 2016.
Did you settle on this arrangement, with these personal, sometimes dramatic episodes, to make it interesting?
Marshall: I think people think finances are boring. And I have to tell you, I thought the state treasurer’s office would be a quiet office — not heavily political, not on the front pages, not on the front lines. But then the crisis came, and it was anything but quiet.
In my favorite vignette, Kate describes an interview that she did with NPR’s Melissa Block. You had just gotten a call that morning about Lehman Brothers filing for bankruptcy, but it wasn’t widely known yet. So all you could think about was the impending implosion of the U.S. economy, and all Block wants to talk about is the 2008 election and Sarah Palin. Your frustration and dread are palpable.
Parker: Yes, (Kate’s) stories make it real. It’s easy for me as an academic to talk about things at a 30,000-foot level. But when you come down to Earth ... there were real people hurt by this.
Marshall: Real consequences.
Parker: I still remember October of 2008, and I felt like I was looking over a deep cliff that had no bottom. And thank God that people who were in office at that time were in office. At least there are some people who understood they needed to do certain things. We escaped from a terrible catastrophe.
Elliott, was there a story Kate had told you that you knew you absolutely had to include in the book?
Parker: There were several like that. There was certainly one that was a dialogue between her and an unnamed reporter in Carson City. It was mostly just playful, but I had to edit it so that people didn’t read too much into it, but making sure it was still true. I had so much fun with that one, because it showed that playful banter back and forth.
Can you recap that one, Kate?
Marshall: So, this reporter just comes in (my office), and I say I have a meeting, and he says, “No, you don’t.” I had lost a special election (to Mark Amodei, for Congress, in 2011), and I just felt like, “Oh my God, people think I’m useless.” … And he was like, “You aren’t useless; you’re just not good at being a politician!”
The reporters who are in the capitol are very knowledgeable, perhaps more knowledgeable than a lot of the elected officials, on the budget and how the state works, so he knew from what we had done during the crisis that I had a plan in my back pocket. And his view was (that I should) let the Legislature do its job and not bail them out.
What did you want to do?
Marshall: My instinct was, we need to deliberate, so I will find a way to give you some financial breathing room so you can deliberate. And after a few special sessions there was also a view, which I think was also an incredible view, that people are going to have to acknowledge just how bad it is, and they are going to have to address it.
Parker: What she’s talking about, in terms of coming up with ideas, is the story of the refrigerator breaking down.
Which is …?
Marshall: Our minds work differently. Elliott is an economist, so his mind works in graphs. My mind works in narrative and (by asking), “How do you put things in a frame that one can grasp?”
One time, my refrigerator broke down, so I had to go to the store. The guy said that in 20 days the refrigerators were going on this massive sale. I thought, “I don’t need the refrigerator; I need refrigeration.” So I just went to the store and bought large blocks of ice and put them in the refrigerator for the 20 days, so I could then get the refrigerator on sale.
In the economic crisis, I thought what the Legislature needed was to get it into regular session and have 120 days to deal with it long-term. All I needed to do was to get the budget to that regular session. I needed to put it on ice. Which I did.
In the book, you don’t shy away from talking about the development of your relationship, from professional advisors to friends to spouses.
Parker: Yeah, I thought it helped to make us real, the experiences that we had, because dealing with a crisis like this is not just this abstract thing that you do with one part of your brain. There are also letters I wrote to Governor (Jim) Gibbons and Governor (Brian) Sandoval. Yes, I published the letters (in newspapers at the time), but I also wrote them because I was hoping I could persuade them, because I was watching damage being done and wasn’t enjoying it. There’s a human part of this story; it’s not just an abstract thing.
So, what was going on with us? I did have to push Kate to tell the story of how we met. I remember it better than she did, but we had this purely professional relationship until after she got divorced and then ran for Congress. I had already been divorced, and if she won that election, I wouldn’t have asked her out, but because she lost I had the courage to ask her out, and it worked out really well.
Elliott, you referred to your letters to Gibbons and Sandoval, and Kate, at one point in the book, you discuss emergency decisions that you had to make after the mortgage bubble burst, saying you were scared because you had a governor at the time who wasn’t the greatest decision-maker.
Marshall: That’s right.
And then there is a foreword by then-U.S. Senator Harry Reid, and, of course, you’ve held public office as a Democrat. Were you concerned about the book taking a partisan political view of history?
Marshall: We didn’t want it to be partisan. We wanted to tell a true story that affected everyone.
Parker: I try — I don’t always succeed, but I try — to be respectful to people and acknowledge those I disagree with. Maybe I acknowledge where they are right and where they have good reason for believing what they believe, but that doesn’t always necessarily mean they’re correct. Kate tried very hard not to name names. She didn’t want to make this a personal issue. There is no one that we wanted to attack. It is hard not to imply some criticism of some decisions made at that time, and the people who were in charge. That doesn’t necessarily mean they’re bad people. We want to be respectful as much as we can, but yes, there has to be a political undertone, because all of this took place in a political context.
Kate, you ran for Congress. You served two terms as treasurer. Does the release of the book now foreshadow something? Are you going to run for office again?
Marshall: At the time we wrote the book, no, I was not thinking about that at all.
Parker: I want to answer that a slightly different way. At the time we wrote the book, Kate had been nominated by President Obama for a position on the federal Election Assistance Commission, and we were expecting Senate confirmation. It was supposed to be a noncontroversial, nonpartisan position, because there are two Democrats named and two Republicans, and there was another Republican nominated at the same time as Kate. … So we thought Kate was going to Washington to be a commissioner.
Now, having said that, writing and thinking about these things makes you realize there are still things that you wish people would fix because you care about the state of Nevada, and if they don’t (get fixed), sometimes you feel it’s your responsibility to step up and try. She is not a natural-born politician, but she is certainly a much better politician than I am, and she has this ability to inspire me. When she says things could happen, it’s hard to put that totally aside. I just wanted to clarify that this book wasn’t written with any of that in mind. It was written in a time where we thought her path was decided.
Marshall: I also think that too often people are nervous about leaving footprints or taking difficult positions, and I think in this crisis at some level the public is yearning for people to take a position, stake out a view, and support that view — (or in our case) write about what was really going on. They want an honest answer. They may agree, they may not agree, but they would like to hear how you feel about something and why you feel that way, with no spin. So in the last chapter, I really tried to say, “Look, this is how I view this going forward. Here’s where I think we are. Here’s what I think the American people deserve.” And in a straightforward way, not trying to couch it in terms that are well-polled.
Elliott, you begin the book by saying you were appalled by some of the misinformation you were hearing about what was going on. I wonder if you are thinking that now, too, in the current environment.
Parker: I am much less appalled by what’s going on at the state level. The national level, on the other hand, I can’t even begin to tell you how appalling that is. Everything I believe as an economist, everything I learned, is thrown up in the air.
Can you give a couple of examples?
Parker: I just wrote a column for The Nevada Independent about the president’s budget. It, more or less, makes up a growth number with no substantiation and that most economists think can’t happen, makes budget projections on assumptions that are beyond heroic and have no basis.
Marshall: In the book we talk about whether you are going to try to achieve economic growth from the top down, or organically, from the bottom up, and the book comes out strongly in saying top-down is not going to get you there. It’s not going to create less inequality, it is not going to create more opportunity, it’s not going to strengthen the American Dream, and the pieces that make up the American Dream for working-class and middle-class people. So to the extent the current administration believes in a budget that’s all top-down — large tax cuts for a very well-off subset of individuals in this country — you’re not going to get the opportunity and the abilities that will help America’s working class reach the goals they want to reach for themselves and their families.
Parker: Kate and I agree that a focus on the plight of both the working man and woman — their wages stagnating and technology undermining their ability to get a good job, and how global trade-related issues have made that a little worse — is a good thing. … I just don’t currently see anything coming out of D.C. that has a policy to actually address that.
Aren’t those typically Democratic values anyway?
Parker: Yes, but Trump did a good job tapping into them, and I think Democrats sometimes forget about this, not just as part of their base, but also the fact this focus on the middle and working class is important to the country as a whole. … Another dialogue that came up with (2016 presidential candidate) Senator (Bernie) Sanders is the focus on inequality. We talk about inequality and poverty in Nevada in the book. Getting the conversation focused on that issue was a good thing. But the policies right now coming out of D.C. are the complete antithesis of anything that helps working men and women who are dealing with inequality and poverty.
There’s a lot in the book about the size of the state government, what the state lacks, and how that hinders the recovery. Since the book was written, a Republican governor backed a tax increase to improve education. Democrat majorities in the Assembly and Senate got funding for scholarships for low-income kids to go to private schools. Marijuana taxes will beef up the state’s rainy-day fund. Has your view shifted?
Parker: The numbers say we are just treading water. We have a tax base that is declining — because it was primarily based on sales taxes and the gambling tax — relative to our overall economy. The taxes we do have, the commerce tax for example, have just enabled us to keep steady. It’s not like we’re going back to some grand, glorious state or even trying to be like an average state. We are still at the bottom. It’s prevented us from shrinking any more. But we still have the smallest state budget. For a state our size, we should have a lot more.
Marshall: I think in the state administration, including the Legislature and the governor, there is an acknowledgment that education is important. Workforce development is important. We are behind compared to our neighbors. … The administration knows what the priorities are. I think they struggle with how to put in a long-term plan, because you’re not going to turn it around in one session.
How do we put in place a long-term plan and get to where Utah is when we’re grappling with the structures that we’ve outgrown? … Nevadans value things that are lean and efficient, and sometimes they get caught up in this language of small. Small is not lean. Small is not efficient. You can be small and inefficient. They get caught up in smoke and mirrors and oppose a structure that is going to work for them, that’s going to cost them the least and that’s going to be the most efficient for them.
Why should people read this book?
Marshall: To try to understand their state, what it went through, what its opportunities are, and what its path forward can be.
Parker: It’s possible we will have a recession again, and we ought not to have to reinvent the wheel.