DENNIS MYERS Against the Grain Advertisement

A week after the Nevada Legislature went home last month, Gov. Jim Gibbons held a news conference to predict that he would have to call the lawmakers back into special session before the next regular session in 2011.

"If the Legislature had cut spending, there would be no need for a special session," Gibbons said. "I don't want one." He complained about the tax burden on business when, in fact, most Nevada businesses got a tax cut.

Hard times are when taxpayers put out of work by recession expect their government to be ready to help. "When times are tough, business loses customers," said Richard Bryan when he became Nevada governor in 1983. "When times are tough, government gains customers, and they are customers who cannot take their business elsewhere."

If workers pay their taxes in good times and discover the government they have funded isn't there for them when they need it, they would have a right to be outraged -- the kind of outrage Gibbons is good at affecting, supposedly on their behalf.

Nevada once had a history of being "recession proof." The casinos liked to take credit for it, but in fact it was the state's terrific population growth rate that was responsible. Nevada was not really recession proof. It experienced downturns during recessions like every other state. But where this meant a recession in, say, North Dakota, in Nevada it meant a slowing of the RATE of growth -- but growth continued nonetheless. "It was more like what we call a growth recession, which is not an actual decline in employment but a slowdown in growth," said economist Tom Cargill last week.

Construction, one of the engines of Nevada's economy, slowed during recessions but did not shut down.

That's one of the things that makes this recession different in Nevada. This state is suffering the highest mortgage foreclosure rate in the nation. Building is way, way down. Government-funded construction -- municipal bus depots, schools, water treatment plants, etc. -- is becoming more important than ever.

There's another factor that is slowing Nevada's economy. The state has depended on another engine: rapid population growth, which is not as assured as it once was. The state has fallen out of its traditional ranking as the fastest growing state in the nation. Nevada's role as a Mecca for retired people is being undercut. "Who's going to be coming to Las Vegas if their portfolio is down, and their house price is dropping, and gas prices are going up?" asks economist Glen Atkinson.

And one of those engines (construction) depended for its power on the other (rapid population growth).

What many of these experts like Atkinson and Cargill seem to be suggesting is that Nevada's problems may continue and deepen after the state recovers from the recession. The things that gave Nevada such remarkable prosperity for so long may not be coming back.

That means the state will have to make fundamental decisions about its economy. When mining faded as a major portion of the state's economy, it found gambling and quickie divorce. When it lost the divorce industry, casinos and population growth kept the state prosperous. With the casino industry in decline from tribal competition, what's next for Nevada?

The legislature has enacted legislation to try to make the state competitive in green industries. This may work, or it may work no better than the state's 1980s effort to become "the next Silicon Valley."

What is essential is competent leadership. Which is what makes the thought of a governor's cackling expectation that Nevada's economy will fail to recover in order to give him political points so dismaying. Competence is not generally accompanied by pettiness.

In January, Gibbons submitted budget recommendations to the legislature that did not balance. Weeks before the stimulus was enacted, he depended on imaginary federal money to balance the budget. Then when the federal stimulus legislation was enacted, he threatened to reject the money. He also balanced his budget with money from a room tax hike, then indecisively went back and forth on whether to sign the room tax legislation. Along the way he alienated the business community and economic development officials.

With decisions of great import for the state economy in the offing in the years ahead, is this what competence looks like?