Column: Powerball Fever
Mr. Thompson is the author of the new Gambling in America: An Encyclopedia (2001).
Wow! Powerball fever. Mass traffic jams on freeways into Connecticut and Arizona. Nothing like it ever before. Get real. Mass hysteria is nothing new. Cases of collective panic behavior have been well documented and analyzed by social psychologists for quite some time. Studies have shown that Orson Welles's radio drama,"Invasion from Mars," reached six million listeners in 1938 and induced panic activity in over one million people. When the truth was revealed, people cried out that the government should not allow such programs.
Economic studies reveal how tulipmania dominated Holland between 1634 and 1637. Tulips were newly imported from Turkey and they became the"rage." So investors bid for bulbs and future crops, and the price just kept going up, up, up. Soon trading activity gripped the entire financial community as investors paid totally absurd amounts for a single tulip bulb. Some paid the price of a house in the hopes that the next person would purchase the bulb from them for even more. Then the bubble burst, fortunes were lost, and the government moved in to regulate market speculation on commodities and other investments. Other studies have assessed rampant fears that the king's armies were attacking civilians in France in 1789; only government action could slow the mania. And there have been mass contagions of anxiety about rumors of devil babies, doctors spreading poison gases, and witches spreading diseases. Again, as the panics set in, the public looked to their public leaders for answers.
Georgia college lottery scholarships go only to B average (high school) students and these include rich and poor alike. But to get a scholarship, the student must show that he or she CANNOT get a federal scholarship (Pell Grant, etc.). Georgia isn't stupid, it still wants those federal dollars.
So it appears that Powerball-mania has its precedents. And given the past, why would we expect any different behavior from a public, after all, now we have radio, television, newspapers and even cable television networks (and e-networks) spreading the news--there is a third of a billion dollars out there to be grabbed. All it takes in a one dollar ticket. The trouble is that this time there is no government that can protect us from the panic. THE GOVERNMENT IS CAUSING THE PANIC. The panic of Powerball-mania is the result of the natural advancement of marketing of state government lottery programs in our post modern computer age. If we love what we have seen our fellow citizens going through over the past month, great, because more is sure to come.
It was one thing to have a private stock exchange playing pyramid games with tulips, it was one thing to have a clever actor scare listeners of a radio show, it is quite something else to have governments spending one billion dollars a year to advertise and promote lottery games that put the collective population of our land into a panic. Is this what government is about? Is this what Jefferson meant when he said"that government is best which governs least?" When Henry Clay proclaimed that"Government is a trust, and the officers of government are trustees?" Lincoln offered that government exists to do those necessary things that the people cannot do for themselves. Rufus Choate told us that"The final end of government is to do good." Is this what governments are doing by having lotteries--doing good, doing necessary things we can't do for ourselves, governing only where necessary, exercising the public trust? Ah! But one may suggest,"the government is giving us a bit of happiness with our lotteries." This the purpose of government? NOT! I agree with William Ellery Channing who wrote"The office of government is not to confer happiness [upon the people], but to give opportunity to work out happiness for themselves" (Note: Quotations are from Bartletts' Quotations).
Powerball and other lottery games have as their purpose the creation of super millionaires. Is this the purpose of government to elevate by the laws of chance certain people among us to be super millionaires? To become super millionaires without doing one solitary productive activity. It is quite bothersome that among us there is one party that rails against"the rich." One party that sees all politics as a pitted battle between"the rich" and the"poor." And of course, that party speaks for the poor. Yet that is the party that tells us that we must fund government by having orgies such as our recent Powerball experience. In the last round of elections that party elected two governors (in Alabama and South Carolina) specifically and almost solely on the platform that they would bring a lottery to their states. And that party keeps telling me that"W" only favors the rich with tax cuts, but"Oh where is his compassion for the poor."
The support of the Democrats for the lottery is a disconnect. I can understand why some Republicans also support the lottery--they are at least consistent as the lottery takes money from the poor and gives it to the rich--the new super millionaire winners, the large corporations that manufacture the tickets and then get a healthy commission for selling the tickets, and the beneficiaries of programs supported by lottery revenues. I sure can't suggest that the Democrats are Marxist on this one. Marx was against gambling because it was an activity of the idle rich, an activity that was non-productive, and an activity when placed in front of the poor was exploitive. Indeed, not only is lottery gambling non-productive, it wastes productive energies as it saps resources in its otherwise sterile money exchange. Outside of the exchange of ticket prices for prizes and government revenues it wastes over one billion dollars in promotions--one billion that could go to much better uses in society.
Contrary to what some may like us to believe no lottery ever created money, every lottery operates by taking existing money away from people. To elaborate: the lottery as a government fund-raising mechanism constitutes a very regressive tax. Study after study shows that poor people buy more tickets than others (per capita) and that the purchases represent a much bigger share of their wealth than the wealth of more affluent ticket purchasers. States purposely put sales outlets into poor neighborhoods. Lottery officials offer excuses such as"well they are the best customers," or"that's where the gas stations are."
The lottery officials also remind us that Jefferson--who vacillated considerably on the issue--did call lotteries"a painless tax, only paid by the willing." When governments spend over one billion dollars a year (3%+ of $38 billion in ticket sales) to advertise and push their product, I dissent to the notion that all purchases are"voluntary." I also dissent to the notion that the people (poor or rich)"demand" the lottery when lottery products utilize one billion dollars to do their"Vance Packard" sales gimmicks to suck in the customers.
The winners are not poor. But, say the lottery advocates, money goes for good causes--typically for education, and in the most innovative lottery state--Georgia--for college scholarships. Again, it is exploitation of the poor to benefit the affluent. Georgia college lottery scholarships go only to B average (high school) students and these include rich and poor alike. But to get a scholarship, the student must show that he or she CANNOT get a federal scholarship (Pell Grant, etc.). Georgia isn't stupid, it still wants those federal dollars. Who can't get the federal scholarships--those who cannot show need--the affluent. Who gets the lottery scholarships: a disproportionate share go to the affluent. Money also goes to K-12 schools to buy computers (The Al Gore solution to the education crisis). Computer companies raise prices (supply and demand, you know), and more rich people benefit. By the way, the schools do not have trained staff to utilize all the equipment and teach computer skills to the children.
But the lottery supporters suggest, how else can a poor person make it in society? The lottery is the only answer. Hogwash.
The lottery's implicit message that"this is the way to get ahead" is ironically the most anti-education message in society today, and the government is using one billion dollars to send the message out. Imagine instead of this message we had one billion dollars telling young people:"be literate, stay in school, graduate from high school, go to college." That's the formula to get ahead. Nine of ten who follow that formula will get jobs that will support them for life ("teach a person to fish..."), and in Las Vegas we call nine of ten,"a sure thing" like Tyson versus Butterbean. And five of the ten will become affluent with the formula, and one in ten will become rich (ergo have a six figure income). The recent powerball lottery gave the poor person a one in eighty million shot--not exactly your sure thing odds.
But where if not the lottery can the poor get money for college? Take the average regular lottery player. He or she spends $250 a year on tickets (more in the District of Columbia). Instead if a couple put $500 a year aside in a college fund for 20 years (I know this means delayed gratifications and its tricky pushing religion), they would have enough money to pay the tuition of three children for four year degrees at public colleges and universities. And this is not gambling. Powerball-mania, madness, panic, or whatever you called it: for the public interest it is powerball stupidity, and governments should not be in this business. Better they stick to what we need, better medical care, and filled potholes in our roads.
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David Hulbert - 8/28/2001
I succumbed to the Powerball frenzy for the first time a week ago,and bought ten tickets.With two Powerball numbers and one winning number,I got seven of my ten bucks back,but took seven tickets instead of the cash.Nobody had won the monster prize yet.
After reading your piece on the Powerball-my ambition now is not to win a jackpot-but to keep from spending $250 a year on lottery tickets.