I really thought I knew how to play poker. Then I went to Vegas. It was just 10 days ago now. I sat at the lowest-stakes table in the casino ($1/$2 Texas Hold ’em). I should have known I was in trouble when half the guys at the table started shuffling their sizable stacks of chips with one hand, a sure sign that this was not their first game of poker. It didn’t start well, didn’t end well, and wasn’t so great in the middle. Where at home I am used to cleaning up with a couple of buddies, about 60 minutes in I had taken enough punishment to prove the point. “Excuse me fellas,” I said. “I’m going to go over to the blackjack tables so I can lose money a little more slowly.” And that I did.
After playing 21 for a couple of hours, I just wandered around for a while before calling it a night. All I could hear was the giant sucking sound of people losing money. Systematically, hour after hour. This has got to be the stupidest thing I have ever seen, I thought to myself. Most of the people I watched forking over hundred dollar bill after hundred dollar bill really didn’t look like they could afford a cup of coffee.
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Massachusetts, like most states, is in financial ruin. State lotteries are not enough. Nor is income tax. So my home state, perhaps the most liberal in the country, has approved three new casinos, one for each region of the commonwealth, to raise pay the government’s bills.
In Florida, the state also has been considering casinos. But then Disney got into the act, making clear that taking tourist dollars away from Magic Kingdom would never fly in a state built on Mickey Mouse.
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I watched the Ken Burns documentary about prohibition. I found the description of male drunkenness astounding. And the role of women fascinating. But what nearly knocked me over was the role of the U.S. government economically. Before prohibition the whole federal government was supported by taxes on booze. We never had an income tax until Prohibition. The income tax was created to replace the liquor tax.
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Cigarrettes kill even more people than booze. The Federal government in 2009 raised the tax to $1.01 per pack. Local and state governments levy heavy taxes. Phillip Morris currently lists all taxes, including federal, state, local, and sales taxes, as 56.6% of the total cost of a pack of cigarettes.
Like booze and now gambling, tobacco is a major source of economic viability for state and federal governments. We need people to drink, smoke, and gamble to pay our bills. And we are not ashamed to promote those activities to do so despite the lethal consequences and the highly regressive nature of their impact in terms of income levels.
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I was sitting with a brilliant investor who happens to be one of the most politically conservative guys I know. He likes to lecture me because he knows I am a liberal democrat. He’s the kind of guy who doesn’t think the dollar is going to hold up much longer, has stockpiles of gold, and got upset with his wife when she went out to buy massive quantities of food for the coming riots because she got frozen rather than canned goods (when the shit hits the fan, there will be no electricity either).
“The U.S. government is just the Cosa Nostra with a bigger army,” he started up with me.
“What do you mean?” I said, playing dumb.
“The government makes more off booze and cigarrettes than the guys making those products,” he pointed out. “And back when the mob was running numbers on every street corner at least you got decent odds. The state lottery is a sham. It’s just stealing. Same with all these casinos.”
He had begun winning me over by that point, despite myself. Then he brought down the hammer.
“The mob would enforce their rules by breaking your leg or shooting you in the head. The U.S. government is much more sophisticated. They have an armed police force to round you up and throw you in jail.”
I had to admit that his argument made some sense when even the most liberal politicians have started to support an increase in formerly illicit activities, purely as a business proposition for their governments to try desperately to save themselves from mounting debt. It’s not like Governor Patrick thinks casinos are an inherently good idea or helpful to Massachusetts citizens. It’s purely about one thing: the money.
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As I have written elsewhere (“Legalize Sex and Everything Else“) I am not for prohibition or criminalization of our sins. Quite the opposite. If it were up to me I would legalize everything: sex, drugs, gambling of all forms (including online poker which was just banned again for no good reason), booze, tobacco, and just about any other way you want to ruin your life. But, I would do it specifically to make it as safe as an inherently insane behavior can be made. Give prostitutes medical care. Allow drug addicts clean needle exchange. Make gambling so readily available that no one has a monopoly. Eliminate street drugs and the drug cartels who deal in violence. Ensure that anyone taking drugs actually knows what they are ingesting instead of playing Russian roulette with a product that has changed hands a dozen times before the clandestine buy.
But here’s the real point: don’t allow government at any level to get in the business of–to actively make money from–killing people through drugs, alcohol, and tobacco or the systematic economic robbery of the poor through gambling. We shouldn’t be balancing our budgets, or paying for our schools, based on our economic participation in those activities. If we do we are no better than the mob. And potentially even worse. At least they were honest about being bad guys.
Yes! Yes! Yes! A thousand times yes. The Government is corrupt.
Second only to corporate America… which puts us regular folks in a bind, since government is our only recourse for keeping the robber barons at bay.
Lmao – you are going to have one hell of a hard time convincing me that the government is NOT the mob. Just because they now wear ties and live in better neighborhoods doesn’t mean they are not engaged in criminal activities all day, every day. Don’t steal, the government hates competition………..There may be a few honest politicians but throwing a good apple into a barrel of rotten ones will not cure the rot; It will destroy the good apple. Systemantics should be required reading for every citizen old enough to vote.
Commuter Traffic enforcement laws have been crafted to ensure a profitable outcome for local and state governments. Through a combination of playing on people’s ignorance and procrastination, regulations are constantly in flux resulting in increased revenue each quarter for city and state coffers. I see no reason why corrupt practices wouldn’t be just as pervasive if prostitution and recreational drug use were legalized. I also have doubts whether protections would be implemented in to keep recreational drug users from harming others. That would require more government oversight which in turn means more government workers which conservatives would never approve legislatively.… Read more »
All ya have to do is look at California who has been trying to get recreational marijuana legalized for years. As it is, they have the “medical” marijuana industry going strong. There is only one reason they want it legalized and that is to get the tax dollars making claim that some of those dollars will go toward drug treatment. Sad thing is in my state, one of the first programs to be affected by it’s financial struggles is the rehab industry. My company closed one residential facility and two out patient centers.
“Like booze and now gambling, tobacco is a major source of economic viability for state and federal governments. We need people to drink, smoke, and gamble to pay our bills. And we are not ashamed to promote those activities to do so despite the lethal consequences and the highly regressive nature of their impact in terms of income levels.” Ok, not sure about the US, but here that money is levied to offset the cost to the state of providing lung cancer treatment. Also theres laws heavily restricting the promotion of cigarettes (and ones in the work for booze). I… Read more »
This is a valid argument if one assumes that elderly people living twenty years longer than those evil smokers never get cancer or other expensive medical conditions, never require full time care, never drive up house prices, etc, etc. Yes, clearly it’s a bad thing economically if people die before the end of their working life; but this is a extremely rare occurance. With the ever-increasing age of parents and thus grandparents in those areas of society where children actually have a full set, it would also be nice if those grandparents lived long enough to know their grandkids. Do… Read more »
This seems like an extraordinarily naive argument; last I checked, the mob didn’t offer medicare. From my standpoint, I don’t really see a problem for asking people to pay for the services that their activities mandate. Nearly 1/3rd of all traffic fatalities are still alcohol related. The amount of money that smokers have cost medicare, medicaid, and anyone with insurance (as hospitals shift costs from the uninsured to the insured, and smokers are disproportionately uninsured) is astronomically huge. As for gambling, when I lived in Chicago there were near daily reports of shootings that resulted from neighborhood dice games, last… Read more »
“Why should people who don’t smoke, drink, or gamble have to pay for any of this?”
Why should people who drink alcohol but don’t cause any traffic fatalities have to pay for it? Why should smokers who live shorter lives have to pay as much in Social Security and therefore collect less of it in old age? Why should gamblers who are not involved in shootings have to pay for them?
Kirsten, your points on alcohol and gambling are overstatements because there is no way to determine in advance who will and will not cause the negative externalities. We cannot foresee the future, and so we cannot tell which drinkers will drive. But we can say with certainty that alcohol sales contribute to drinking and driving, and so the most efficient method of taxation is simply to tax the sale of alcohol itself. If we could see the future, maybe you would have a point, but we cannot and so we are left with the most pragmatic option: taxing the related… Read more »
Cool, I say that they should pay for it but then use these tax dollars to pay for services related to the affects of their behaviors. But they don’t, they pay for roads, schools and many other services provided by federal, state and local governments. Now, take those tax dollars out of the general funds, where ya gonna get the billions of dollars you’ve now lost? We’ve gone way beyond the taxation of these behaviors. We are now looking at higher taxes for fast food, soft drinks, and in Chicago, they even talked about taxing bottled water. Speaking of Illinois,… Read more »
Tom, this argument doesn’t really make sense. The fact of the matter is that the tax dollars collected on cigarettes, alcohol, and gambling usually go into the general fund of the state and/or federal governments. Those same general funds then pay for medical care, police, and emergency services. The harm caused by these products uses up medical care, police, and emergency services. Thus these items are paying for what they are using up. You attempt to differentiate out “roads, schools, and services” ignores the reality that the biggest part of any budget is going to be medical, police, and emergency… Read more »
Mike my point is not that booze, sex, drug and gambling trades aren’t harmful only that by participating economically we are benefitting from the harm. If you get all this stuff out where you can see it and then work on reducing the harm through regulation and education. Don’t make drug addicts use dirty needles, give them clean ones for goodness sakes. If drunk driving is the issue get a lot tougher on enforcement. Don’t make money of the people dying. Don’t allow trafficking of minors, make sure prostitutes have proper medical care.
Your idea of legalizing everything sounds good in theory. There’s just one flaw in your plan. Your depending on the same lying and corrupt government enforcement thats gottten us into this mess. Here in New York I remember 1966 or so, New york passed a 2% sales tax we were told to pay off the note from the 1964 Worlds Fair. Today it sits at 8 3/4 %. The lottery was going to help fund education. I personally don’t know of anyone whos school taxes have ever gone down . I could write more but I’m due for an auto… Read more »
And Tom, my point is that these things ALL cost society money. Harm reduction is great, but in the meantime we still need to pay for medicare, medicaid, ambulance, and police services. What’s wrong with tying taxes to those products that drive up demand for all those services?
Tom, I can’t immediately supply data to prove it but I’d bet good money that the profit to certain individuals and groups resulting from keeping these things illegal is greater by far than the taxes that would result from changing the law. I hate to be so cynical but “follow the money” seems appropriate
You have a good point about government pushing gambling.
However, cigarettes? I don’t think so. If you want to see what a country that shamelessly pushes cigarettes looks like, go to China. Smoking is patriotic duty in China. And it shows.
And hilarious state lotteries- they have two, one which is earmarked to fund amateur sporting events, one which tops up pensions. The first one makes a bunch more money.
That’s actually an insult to the Mob. Even they have more principles than any government.
It’s like my Papi use to say, “The only difference between the Government and the Mafia is copy right infringement”