RUNNING THE NUMBERS: THE LOTTERY, PART 2

Posted in Rants on April 17th, 2012 by Ed

OK, so we know that lotteries are machines designed to extract money from the poor and redistribute it to the middle and upper classes in the form of property tax relief, school funds, and merit-based scholarships. This is the point at which one of our friends on the right reliably steps in to remind us that no one points a gun at the poor and forces them to buy lottery tickets. This is indisputable. It also leaves us with the question of why people willingly participate in something that siphons off income they can scarcely afford to spare in exchange for catastrophically lousy odds of striking it rich. Anyone who is poor, has been poor, has close friends or family who are poor, or works in close contact with the poor understands that long term financial planning and rational money management are not traits the poor possess in great quantity. Accordingly many people simply conclude that the poor are not smart enough to behave in their own rational self interest. This is a common way of reaching our preferred conclusion that the poor have only themselves to blame for their predicament. In reality, of course, the poor know very well that state lotteries are screwing them. That doesn't stop them because the experience of being poor in the United States is little more than getting screwed repeatedly ad infinitum until all parties are completely desensitized to the act.

Lotteries are the descendents of older, informal, private-sector prize systems like "policy wheels" (often run by neighborhood merchants as a way of distributing money people would then use to shop) or numbers games (usually run by organized crime). It wasn't until the 1960s – New Hampshire in 1964, to be specific – that states legalized, and then dove headlong into, the lotto business. The key difference for consumers when control shifted from the black market to the public sector was that the odds got a lot worse and the payoffs got much larger. Oh, and the winners got the honor of paying taxes on their prizes. Yes, lotteries actually got more exploitative when the mob stopped running them. The theory behind state control was and is simple: find a way to boost flagging revenues without taxing people who vote, and since gambling and playing the numbers are going to happen anyway (as Pennsylvania Governor Rendell so animatedly pointed out on TV recently) the state might as well get some tribute out of it. That the same logic could be applied to drugs and other illegal vices escapes most of our elected officials.

But I digress. On the original point, poor people play the lottery because they have one all-consuming goal: to be not-poor. It does not matter if the odds are ten to one or a billion to one; if the possibility exists that a given poor person can wake up the next day and instantly not be poor, he or she is going to take that chance. I have known poor and borderline poor people who play $100+ on the lottery every week. I have tried (and failed, of course) to explain that saving the $100 every week would give them over $5000 at the end of just one year. But he and I think differently about these things. The inability to save money or plan for the future are classic stupid habits we develop when we're poor, and it has the added bonus of guaranteeing that you will stay poor as well.

Blowing that $20 every day on scratch-off tickets is just one of the dozens of ways that the poor get reamed on the regular, and it's actually one of the few that offers any upside (even at long odds). They're treated unsympathetically (at best) by the police and courts. They can't afford the food that won't make them fat and sick, and they can't get to the grocery stores that sell it anyway (Not to worry! The neighborhood has a liquor/convenience store on every corner). Their own neighbors rob them and push the most addictive drugs on them. Predatory lenders offer usurious short term loans and, increasingly, credit cards and mortgages. They live among the waste products of the dirtiest, most polluting industries in their area. Politicians and planners use them as experimental subjects, shuffling them through one hare-brained Urban Renewal Plan after another. What few jobs are available are usually backbreaking and low paid – although that never stops The System from regularly reminding them that they work too little and make too much. Most of all, though, they are regularly ripped off by scam artists selling hope – the for-profit education industry, evangelists, politicians, banks, casinos, and, yes, lotteries.

Taking money from people who have little and are powerless against even the slightest chance of escaping poverty is the kind of activity usually associated with the Mafia and street gangs. State governments are more than happy to play the part though, and they've gone far beyond anything organized crime ever did in terms of exploiting the desperation of the poor and selling them false hope with terrible odds. Lotteries that take their money for the explicit purpose of giving it to people who are financially better off is evidence of how completely our governments – particularly here in the South – have abandoned even the pretense of holding the moral high ground. They've identified the victims of an exploitative system and chosen to use that to their advantage. The poor, for their part, are all too willing to play along. Spending $20 on the lotto every day may not appear to make sense until we realize that to the poor, there's no point in saving that $20 – someone or something else is just going to come along and swindle them anyway. Might as well blow that money on what might be, but never is, their literal ticket out of a life of grinding poverty.