The Path to Sustainable Prosperity

Executive Summary

Executive Summary

Nevadans crave economic recovery. The Great Recession has affected no state worse than Nevada. For nearly five years its unemployment rates have been in double digits, while it has consistently suffered from the nation’s highest rates of home foreclosure and personal bankruptcy. The state’s historically rapid population growth has ground to a near-halt as fewer people today see Nevada as their land of opportunity.

Evidence of recession is pervasive. Tarps on the Las Vegas Strip today cover what were once symbols of Nevada’s seemingly endless prosperity. Now they no longer symbolize success, but failure.

Few observers have correctly diagnosed the causes of this failure. Too many have assumed that the suffering of Nevada’s citizens resulted from an unregulated market run amuck with too little oversight or control from government officials. This narrative has prompted Nevada’s leaders to call for more government control over the marketplace. Now, Nevadans are told that politicians will take responsibility for creating tens of thousands of new jobs and that the industrial path of the future will be meticulously planned out by studious government bureaucrats.

This prescription springs from a misdiagnosis of Nevada’s ills and will only exacerbate the troubles of its citizens. The true causes of the Great Recession are a series of government policy failings in the monetary and regulatory spheres that created perverse incentives within the marketplace and biased investment and purchasing decisions in detrimental ways.

The path to economic recovery, then, lies not in granting even more control to political entities. Economic progress has always resulted from the free exercise of individual initiative and private enterprise.

Despite a public meme that Nevada is a business-friendly state, this report demonstrates how Nevada is actually among the states most hostile to entrepreneurship. While per-capita tax levels are near the national median, the state suffers from some of the nation’s harshest licensing and filing requirements, labor-market strictures and regulatory frameworks.

This report details each of the steps through which entrepreneurs must pass when attempting to establish a new business — and how these artificial barriers to entrepreneurship accumulate to discourage small-business growth. Nevada could become more business-friendly by eliminating state business subsidies, reducing or eliminating state and local licensing fees and filing requirements, easing restrictions on labor and streamlining the state’s regulatory structure.

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