Saturday, September 17, 2005

Las Vegas Will Be Next

After Katrina there was a lot of people looking at New Orleans, saying "what a place to put a city, what were they thinking"? And now our President promises to spend unspecified hundereds of billions of dollars to re-build it. Well we can only hope that a safer city can be built. Above sea level at least. But New Orleans is not the only American city placed in the bullseye of catastrophe. Look at the American southwest, and most ludicrous of all, Las Vegas.

This post has been brewing in my mind ever since the hurricane, but was suddenly spurred by the news that MGM Mirage is planning "a $5 billion mixed-use monster on the Las Vegas Strip that will boast 18 million square feet of casino, hotel, condominium and retail space."

I know that it is easy to take pot shots at Vegas. But this is insane (read it here). Vegas will dry up and die, Bellagio, New York New York, all of it. It will not die in 3 days by flood, but it will happen over the span of 2 years, by fuel shortage, drought and monetary collapse. I'll try to stay calm and itemize my outrage and objections.

1) Being a resort town, everyone coming to Vegas has to fly across the desert. Did anyone notice that two more airlines just went bankrupt? Flying around the country will not be so simple soon. No one will hop on a plane for a spontaneous weekend of gambling.

2) Las Vegas' high rise hotels must be some of the most intensive energy and water use buildings ever. Fuel, electricity, and water will soon become prohibitive. The American southwest is dangerously drought prone. Global warming will bring drought to the southwest just as surely as it brings catastrophic hurricanes to the Gulf of Mississippi. There will be no source of water: all alternatives require large amounts of energy. Of course a drought and energy shortage will not affect only Las Vegas. Every city, from LA to San Diego, Phoenix, Santa Fe, and Denver, will suffer.

3) From a macro economic perspective, casinos don't add anything to the economy. They produce no value. They take money, albeit in an highly entertaining manner, they don't actually make it. When the Fed is spraying cheap dollars everywhere, you can benefit with a quarter million line of credit from your house. Then, sure it sounds like fun to go to Vegas and throw hundred away dollar bills while the lights flash and bells ring. But Americans won't have those throw-away dollars anymore. They will be spending it all on filling their gas tanks, paying health insurance, electricity and grocery bills.

So where will all those people, the actual citizens of Las Vegas, go? I think our federal and state governments should start preparing for mass migrations. The dust bowl all over again.

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