The American Dilemma and How We Can Fix It

TAKE A CHANCE

This past week I was surprised at how many friends, neighbors and acquaintances made a pilgrimage.  No, this was not a religious outing in pursuit of a higher Lenten experience nor in preparation for Passover.  It was a quest to buy lottery tickets for last week’s largest-ever jackpot of $640 million which ultimately was divided among three lucky winners.

These folks, in pursuit of a chance at a lifetime of ease and financial security, drove to outlets in Arizona or California so they could stand in line to spend their money purchasing tickets.  They were participating in the “new American Dream” which suggests that the two ways to achieve success are either to “Win the Lottery” or “File a Law Suit.”

Games of chance have been around since man learned how to carve bones into dice cubes.  But all games of chance, whether they use dice, cards, lotteries or slot machines have one underlying principle.  They are designed to re-distribute wealth among the game participants.

It surprises me how so many people who live here in Las Vegas, a city that has been built on gambling, are unaware of the true fundamentals of gambling.  They go to the casino, play slots or video poker and occasionally win – sometimes big and are delighted that they “beat the casino”.  Many more times they return home with less money than they started and complain that “the casino beat them”.  The fact is that neither of these statements is true.

Their winning episodes were the result of their taking home the money of other players who had previously played that particular machine.  And their losing episodes will allow those who play that machine after they have made their donation to walk away with some or all of their money.  The casino is a mere intermediary – collecting a percentage of all the monies that have been fed into that particular machine.  In essence, they are little more than a banking facility – charging a fee for their services to cover overhead and earn a profit.

Gambling, unlike capitalism, neither creates nor destroys wealth.  It merely moves it around.  A friendly home game of poker will demonstrate the concept.  Each of six players invests one hundred dollars in the game and at the end of the evening when the game breaks, six hundred dollars remains on the table.  Some players will have more and some less than their original starting investment.  No wealth has been either created or destroyed – merely re-arranged among the participants.

Most of us would feel that if we went over to a friend’s house and saw one hundred dollars lying on the coffee table it would be wrong to pick it up and put it in our pocket.  In essence that is exactly what happens when we gamble in a casino – and in that venue we seem to feel that “winning” is perfectly acceptable.  However, it is little different than the example of picking up our neighbor’s money – only in this case the “neighbor” is a nameless and anonymous person.

The purpose of this post is not to discuss the virtues or lack of virtues of gambling but to draw a parallel between it and the fundamental principle underlying the present administration’s view of how to “fix” the American economy – through wealth re-distribution.  It is a fundamental talking point that President Obama has made a cornerstone of his platform and seems to be a basis of his economic philosophy.

It is the same concept which Karl Marx espoused in “Das Kapital”.  It is an economic system that a significant portion of the world adopted and subsequently abandoned for one simple reason – it doesn’t work and never will as long as some of us are willing to work harder and longer than others to achieve their economic dreams.

The prudent among us would not develop a financial plan based on the outcome of a game of chance.  It’s unfortunate that those in elected office don’t understand this.  Perhaps they were among the many in line buying lottery tickets last week.

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Comments on: "TAKE A CHANCE" (10)

  1. Reblogged this on nebraskaenergyobserver and commented:
    Check your Mega-Millions tickets yet? Here’s why its a lousy way to run the country.

  2. Unfortunately politicians in every country are not concerned about the lot of the common man, it’s all about the desire for power and the handouts (redistribution of wealth in your terms) we receive are in effect bribes to ensure they continue on in power. Capitalism is superior to Communism not because it is conceptually better, but because it panders to our natural humanistic greed. We work because we want to find benefit for ourself first, then our family members then society, and the idea that we would work for the benefit of others is generally unappealing. That’s primarily why Communism failed. When we do see people whose sole motivation is to be of service to others it takes us by surprise and we tend to look for hidden motives.

    • You are certainly correct about the motivation of politicians across the globe. There is one condition under which communism would succeed as an economic system. If we each had an identical scholastic capability; if we each were willing to work with the same efficiency as everyone else and for the same amount of hours; i. e. if we were all clones – then communism would work. But then, we wouldn’t need the government to re-distribute wealth as we would all have as much or as little as everyone else. Obviously, that’s not the way the world has evolved.

  3. Unfortunately the ethics and morality of gambling and capitalism are one and the same:

    Here’s how capitalism republican style works: Material cost to make widget is fifty cents + labor cost to make widget is fifty cents yet widget retails for ten dollars. Hence the wealth generated from this widget required the re-distribution of millions of dollars from the consumers who bought it while the producer of the widget both overcharged his unsuspecting customers while underpaying his workers.

    Apple made $400,000.00 per employee yet the majority of Apple’s workforce lives in China where its products are made, its Chinese workforce is required to live in a heavily guarded compound and live in crowded dorm rooms while making less then $17.00 per day. Apple could have made its products here in the US and still made a substantial profit while providing jobs for its customers. Yet intentionally chose to make their products in a country where they can violate the human rights of their employees at will in order to maximize their profits.

    Which is why I don’t buy Apple products and never will. For just as those who vote for the lesser of the two evils are just as responsible for the evil committed by their leaders. Those who buy products from companies who willfully make their products in countries that allow the human rights of their citizens to be violated are just as guilty of those violations themselves.

    That is also why I don’t buy ebooks from mainline authors when the publishers rip off their customers by charging as much for the for ebook {which costs far less to produce} as they do the hardback version instead of passing along the savings to the consumers.

    • I thoroughly endorse your philosophy of withholding your dollars from companies whose products, practices and philosophies do not meet your expectations or standards. It is for that reason that I have not been to a McDonald’s for nearly twenty-six years as I view them as a major contributor to the explosion in obesity with its many health complications here in America.

      With respect to your “widget” example, I would like to make two points First, your analysis overlooked the fact that most products do not come to market directly from any given manufacturer. They are normally distributed to a wholesaler who marks up the product to pay his employees and overhead and earn a profit, then to a retailer who does the same and finally to the ultimate retail purchaser of the product. Along the way there is the cost of advertising the product, and if the product is successful, a reserve for the payment of income taxes on the profit it generates. Second, the alert consumer, such as yourself, has the option of choosing not to purchase the product if he considers the price unfair. Ultimately, this lack of interest, if sufficiently wide-spread, will cause the manufacturer to change its pricing strategy or may result in its abandoning the particular product totally with a consequent loss of the jobs that it had created to manufacture the widget.

      “For just as those who vote for the lesser of the two evils are just as responsible for the evil committed by their leaders.”

      You have used this or a similar phrase in several comments. In an ideal world, we would always have the choice of choosing between two candidates for every office who represent truth, justice and virtue – in which case a vote for either of them would be a selection about which we would feel good. However, we both know that is not the way the political world works. I infer from your statement that if a voter is unhappy with both candidates the appropriate action is to choose not to vote – which in essence ultimately means he voted for whichever candidate ultimately wins. I’m not sure how that liberates him from any degree of “guilt” in the election process and in the governance of the country.

      • The difference in an individual who abstains from voting for the lesser of two evils instead of following the herd off the cliff by voting for a known evil {whether lesser or greater makes no difference as evil is evil}. Is 1) a clear conscience when called to account by the Father Above and 2) whether one is a Christian in reality who stays true to their convictions formed by studying the Word of God – the Bible – the only standard of truth for a Christian. Or 2) being in reality a Christian in name only whose ethics and morals changes direction with the wind.

  4. Those who neglect and intentionally ignore the lessons of history always repeat the mistakes of the past over and over again. The American revolution was as much a revolt against the financial abuses of a corporation {East India Company} as it was a political revolution. Which makes it ironic that today’s conservatives promote an ideology that puts that power back into the hands of those who run the corporations; by weakening the only institution that can restrain them from financially abusing their employees, customers, and competitors as well as prevent them from degrading and destroying the environment.

    • “Those who neglect and intentionally ignore the lessons of history always repeat the mistakes of the past over and over again.” I have used the original Santayana quote in several posts and couldn’t agree with you more.

      We should explain that to the two-thirds of American High School seniors (most of whom are educated in public – i.e., government run schools) who are unaware of the fact that George Washington was the first President of the United States.

      • Even more ironic is the fact that those appointed by Nixon, Ford and Carter to oversee the economy were believers in milton friedman’s economic theory and managed to wreck the economy during these administrations when applying conservative economy theory. Just as Greenspan did during his turn at the helm when he both helped to create and oversaw the conditions that led to the implosion of the economy in 2008.

        It seems that just as liberals are bound and determined to deny the personhood of the unborn in their defense of abortion. Conservatives are just as willfully blind to the “Salient Fact” that the economic policies they promote always lead to boom and bust cycles that enrich the few {1%} at the expense of the many – 99%.

  5. As always, you blow me away with your story analogies & how you relate them to politics, morality, etc. This is truly a gift you have – one that consistently draws me to your site for a brand of wisdom that entertains, enlightens and never fails to leave me in deep thought long after I leave. I am truly glad you started this blog. 🙂

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