Las Vegans Recall Fear, Uncertainty When Economy Crashed In 2008

The Great Recession wasn't the only economic downturn in Las Vegas this century.

Tourists and conventioneers stopped traveling after the Sept. 11, 2001, terror attacks, and Strip resorts shed workers by the thousands.

Less than a year later the economy had rebounded, kicking off a boom halted only by the deep recession that began in 2007.

Lauri S. Thompson, a longtime Southern Nevadan and attorney with the firm Greenberg Traurig, said the quick recovery from Sept. 11 made many on the Strip think shrewd management could smooth the economic cycle.

“While we were not physically hurt by 9/11, it did seriously hurt our economy,” said Thompson, who practices entertainment and intellectual property law. “Our recovery from 9/11 was remarkable.

“I think we were all surprised by our ability to regroup and grow stronger. This gave us confidence, and that confidence made it harder to recognize our vulnerability. “

What turned out to be a false sense of security came crashing down a decade ago, when the financial crisis turned into the worst economic downturn since the Depression.

Las Vegas was ground zero in the recession, leading the nation in joblessness and foreclosures.

But economic numbers are collections of individual stories, and for many in Las Vegas, the wounds of the recession still remain raw.

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Dan O'Shea worked for the Carpenters Union at the time. He remembered that in one day 700 construction workers were let go at the Eschelon project, which is now the Resorts World Las Vegas project.

"It was almost like it wasn’t real," he said, recalling the line around the block to get into the union hall. "It was not a good time to be in the construction industry."

O'Shea said the construction industry got hit first and that soon trickled down to the rest of Las Vegas.

One of the big problems for the construction industry was the credit crunch. Banks pulled back on all kinds of construction loans and since the money wasn't flowing the work stopped.

O'Shea said now contractors are much smarter about how they get financing and are more conservative. 

"We were drunk on success for 20 years," he said of Las Vegas in the boom years. There was a feeling that nothing could go wrong but when it started to fall apart, "it felt like Las Vegas was full of doom and gloom," he said.

And O'Shea said the downturn impacted everyone from construction workers to the service industry.

Jamie Yoshizawa was one of those people deeply impacted by the tough economic times. She was a real estate developer and she lost everything. She said when real estate started to get a little shaky she didn't think it was going to be a disaster.

"I was actually experiencing the change probably in the late 2007 and 2008, where construction loans were harder to get ahold of, and draws were slowing down," she said, "But at the same time, I just thought that was a speed bump. I never thought we were falling off a cliff."

Yoshizawa lost everything: the businesses she had been building for 20 years, her properties, her employees. She hit the bottom of the well as she calls it when she was scrounging to pay rent to her friend so she could live in the back bedroom.

While it sounds like a terrible place to be, Yoshizawa sees it differently.

"It was the bottom of well, which is actually a good point," she said, "But at that point, it's not like you're looking down the well not knowing how far you're going to drop. You've got a good foothold because you're at the bottom of the well. When you're at the bottom of the well, there is nowhere you can go but up."

It is that kind of attitude that helped many people get through the financial crisis and housing meltdown, Dr. Norton Roitman told KNPR's State of Nevada.

He said that people had to make mental adjustments and find a new dream to go forward after the crisis.

“Economics is very closely linked to emotions because it has to do with security and future and one’s personal identity," he said.

He counseled lots of people during and after the crisis. One person he talked with felt that his family would be better off with the insurance money they would get if he died than with him actually being alive.

It took a lot of convincing to get him to see that finances did not matter as much as him being with them.

Roitman said people who had a "strong spiritual" core and had a strong connection to a support system and the community weathered the financial storm better than those who felt isolated and who had fixated on a future dream.

Bruce Isaacson saw the impact of the recession not just on his own life but most dramatically on his father's life. 

Isaacson is the former Clark County poet laureate but he was also in the commercial real estate at the time of the recession. He noticed something was wrong when he realized he hadn't made any money on his ventures over the last year.

But it was his father who suffered the most, Isaacson said. He describes his father as a builder and developer, who took great pride in his work.

When housing prices started to fall, his father's house was underwater and his finances were wiped out. While Isaacson admits his father had medical issues before he believes what happened during the recession are the things that really killed him.

His father died in 2009.

"The recession has human consequences that we all find difficult perhaps to relate exactly but are very concrete afterward as you look back on what happened," he said.

Isaacson is writing a book about the recession and the toll it took on Southern Nevada. He believes it is still with us and is the defining event of the century so far.

One of the buzzwords that came out of recession was "diversification." There are now government offices dedicated to making sure Nevada isn't as reliant on tourism and construction. 

Debbie Somers actually weathered the recession because her furniture rental business had been hit after the 9/11 terrorist attacks. 

After convention business - her primary source of income - ground to halt following the attacks, she and her team decided to start making furniture and selling it to the up-and-coming nightclub market.

That effort taught her a valuable lesson and helped her company make it through the downturn.

"You can never put all of your eggs in one basket," she said, "We now have four divisions running out of the company and that's what you have to do because the first one may not work but you have to have a Plan B."


Dr . Norton Roitman, Las Vegas psychiatrist; Dan O’Shea, construction executive; Jaimee Yoshizawa, real estate developer; Debbi Somers, CEO and founder of Somers Furniture; Bruce Isaacson, former Clark County poet laureate

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