Friday, July 21, 2006

A Real Chance of Winning Big... NOT!

I saw a commercial the other day. I wasn't paying particular attention to it--just your usual lottery commercial--at least until it claimed that you have a "real" chance of winning.

Really? Has there ever been a single lottery that gives people a "real" chance of winning? Aren't they designed to suck money out of your pocket faster than Las Vegas? Just because there are $26 million up for grabs doesn't mean the cost of 'winning' it is substantially more than that.

Besides giving people a false sense of hope, I have a special bone to pick on state lotteries. They're the absolute worst form of gambling--the largest state-sponsered fraud of all time. Las Vegas has payback ratios in excess of 95%. You see the ads all the time about the 'loosest slots' and even some with payback ratios of 98%. So for every one dollar you gamble, you'll likely get back 98 cents. The casinos still have the odds stacked in their favor, but they cash in when you go back and bet the 98 cents, then come out with 96 cents. Then try your luck again with 96 cents and come back with 94 cents. And so forth.

Those state lotteries, though--those are the worst. They typically payback about 50% of what you bet. Your odds of winning are significantly better by going to Las Vegas and doing your gambling there. Think about that. Those magnificent casinos were built off of the common man's gambling losses.

The worst part about state lotteries isn't the lousy payouts, though. No, the absolute worst part is that because so many states have become so reliant on the income lotteries generate, they actually encourage their citizens to play. A tax on stupid people, as it's called. Our state governments, which should be protecting us, are doing everything in their power to destroy the fiscal responsibilities of their constituents. They have lots of convincing reasons to throw your money out the window.

For instance, proceeds from the lottery help fund schools. It helps justify the state raping you. "Yeah, they took all my money, but at least it's going towards a good cause!" You know what happens when you take money from the lottery and give it to schools? Schools become very dependent on that money. The state may not fund the schools as much from general tax revenue--and why should they? The lottery is paying for it! Net gain for the schools: Absolutely nothing. When you hear about all this money the lottery provides for schools, ask yourself: Why have so many of them sold out to Coke or Pepsi? Why have so many of them started selling food from Pizza Hut and other fast-food locations? They aren't doing it "for the kids." They're doing it for the money. That such a terrible conflict of interest would be allowed to exist is astounding.

Now I'm not really qualified to say if schools are getting their fair share of money or not--I don't have kids nor is the total amount of money going to schools my beef--but rather, if we want to fund schools, I'd rather it come from the general tax revenue instead of putting schools into the awkward situation of promoting other businesses (lottery, fast food, or anything else for that matter) that, in the long run, can have an extraordinarily bad influence on the kids its supposed to be helping.

Lotteries are a terribly inefficient way to collect taxes. Satistically, it's the poorest people who fall for it--the very people who can least afford it. What would you do if a politician comes up for reelection after promoting a tax on the poorest of the poor?

Just say no to lotteries!

Monday, July 17, 2006

Turning Green?

I was in the library the other day and couldn't help but notice the cover of Newsweek. It was green. The whole cover. You'd have thought it was St. Patricks Day or something, but no, the headline on the cover said something about how "green" was in. Which was kind of surprising for a couple of reasons.

First, I thought being environmentally conscious had been "in" for quite a number of years now. When I was a kid, I don't ever recycling anything. It wasn't exactly yesterday recycling became "in". Probably the early 90s, I'd imagine, but don't quote me on that. My point being that it wasn't exactly yesterday, and there's already a whole generation of young adults today who probably don't even remember the time before recycling was a fashion statement.

My second thought was, "Bullshit!." Few people have had a sudden change of heart to save the environment. Nobody cared about hybrids when gas was selling at a dollar per gallon--they wanted SUVs. They didn't care about using double-paned windows to keep heat in and the cold out during the winter--electricity was cheap so they didn't care about conserving it. Few people worried about 'energy-efficient' appliances, carpooling, or public transportation.

The sudden change of heart has nothing to do with saving the environment--it's the wallet, stupid. People want more full-efficient cars to save money. They want to stop heat from leaking out the windows during the winter to save on heating costs. They want energy-efficient appliances to save on the electric bill, and washing machines that use less water to save on that water bill.

Give someone a million bucks and I'll bet you most of them will 'upgrade' their vehicle to something a bit less fuel efficient. Millionaires don't worry about the price of gas, after all. Drive down electric prices and people will start wondering if less expensive appliances that use more electricity might be the way to go.

It's the pocketbook, the almighty pocketbook. Sure, saving the environment is a nice bonus, but who are we kidding? High energy prices might save this planet yet. =)

*** This just in! ****

I just ran a spell check on this article, and it complained about the word 'carpooling'. I'm pretty sure I spelled it right and the spell checker just doesn't know the term--not a very green spell checker, is it? Or is it...? The first suggestion it offered as a correction was "corpulence". Make that a lesson--get out and walk whenever you can! Carpooling is good, but walking, riding a bike, or riding the public bus is even better. ;o)

Saturday, July 08, 2006

Prospering is a good thing.... right?

Some people like to read People magazine. Me? I like to read BusinessWeek. It took me awhile to find this publication. I wasn't really looking for it, though--I had frequent flyer miles with Continental Airlines but, alas, I wasn't flying frequently enough. After three years, they sent me a letter saying I had to have *some* sort of activity on my account or they'd close it. But, to help me out, God bless them, they included a form so I could subscribe to lots of magazines and use those miles that were sitting around doing nothing. Plus, since that would make my account 'active', they wouldn't close it for another three years.

I looked over the list and the more lusty magazines didn't seem to be offered, so instead I selected Smithsonian, BusinessWeek, Backpacker, Outside, and probably a couple of others I now forget. Anyhow, I had no idea that I'd become a BusinessWeek addict. First of all, it comes every single week! I really enjoy the other magazines. Smithsonian is amazing and I feel a certain degree of fondness for if for no other reason than introducing America to letterboxing. Who knew that such a little article could ultimately change the course of my entire life. The biggest irony of all was that I never did read that original article! =)

But it comes once a month. I get really into the magazine, finish it from cover to cover, wishing there were more. And a week later, the feeling's gone. "What? Smithsonian?" I think a month later when the next issue comes. "Did I subscribe to that?"

But BusinessWeek--oh, they hook you. Every single week. =) It's great. It has scandals! Sex! Shocking turns of events! The greatest of successes and the greatest of failures. Fascinating stuff.

The last issue I read had a small article about website that bring people who need money together with people who have money. Person-to-person loans. And it mentioned a website:

I'm fascinated by this idea. Cut out the middleman (i.e. banks). In theory, those lending money can get better rates than they would by giving it to a bank, and those needing money can get better rates than they could get from a bank--if they can get a loan from a bank in the first place. In a nutshell, borrowers list the loan they need, then lenders bid on the loan until the borrower can get the best rate possible. So I went to and checked out the site in question.

I was hooked. I read late into the night. What kind of interest rates was it for someone with an AA credit rating? What about a D or E rating? Who were these people that borrowed money from other people on the web? Who were these people that lent money to other people on the web?

I never did learn much about the people lending money, but if you check out the front page of you'll see a list of "Featured Loan Listings". When I visited, there was a woman in her early 20s wanting a $20,000 loan to start a consulting business. Another person was trying to consolidate credit card debt into a low, or rather, lower cost loan. He itemized all of his monetary expenses and listed his monthy income to show he could reliably pay off the loan.

I'm not sure there's anyone actually verifying all the information they put online, and certainly the borrowers have a good reason to make themselves look like better borrowers than they might be, but it's fascinating how much personal--very personal--information they've put online.

It was well after midnight when Amanda walked in on me. "What are you doing?"

"Uhh....." I looked ashamed. "I was surfing the web."

So I explained what the site was about, then clicked on the loan for the woman who wanted $20,000 for a consulting business. Amanda gasped. "It's porn!"

"No it's not! It's just someone who needs a loan!"

"It's financial porn!"

And I knew she was right. It is financial porn. I couldn't pull myself away. I wanted to read about other hardship stories. People with medical problems and the large debts they incurred because of it. Students trying to pay for their next semester of college. I kept clicking and clicking, unable to pull myself away from the monitor.

I'm still fascinated by the idea, and I keep going back to the site to read about newly listed loans. Right now, there's a woman with an E credit rating asking for $2,550 at 24.99%. A real tear-jerker of a story with a spouse that abused her and ruined her life, but she's digging out right now. I'm not really sure I believe the story--it could be true, but she seems a little too desperate for money. I'm not convinced she'd actually pay it all back. I wish her the best of luck, but as an investment, I'd stay away from her.

The next person needs $1,500 at 18% for nursing school. She has a D credit rating with a debt/income ratio of 11%. Not stellar, but definitely could be worse. I think this might be a good investment. Nurses are in high demand, and with baby boomers getting older the demand is bound to continue increasing. I like the fact she's in her 40s. Most of those kids in their 20s seem like irresponsible idiots, while most of the people I knew in school who were in their 40s really wanted to better their lives. This loan is actually already 100% funded by 13 different people, but the bidding doesn't finish for another 6 days, 15 hours, and 27 minutes. I could still get in on the bidding, but I'd have to offer something lower than 18% (as does anyone else who choose to bid on this loan).

I'm not going to bid on this loan--I've sent no money to to do any bidding--but I'm glad this person's loan is already fully funded. It sounds like she'll likely get a much better rate than the 18% she was asking for, and I want her to do well. This is a story, I think, that will have a happy ending. =)

Financial porn. Love it or hate it, it's here to stay.

Tuesday, July 04, 2006

Flag Burning

What better day to post about flag burning than Independence Day. The day our small, little colonies decided to get together and cast off the heavy glove of King George.

Since the dawn of time, flags have had a patriotic value, are cheap to make, and easy to burn. Thus, flag burning as a form of protest came about. Quite simple, really, and oh so controversial. The house passed a constitutional amendment to bad flag burning, but the senate did not. Even if the senate passed it, fully three-fourths of the states would have also had to agree to it. It's not easy getting a constitution amendment passed, which might be the reason it's happened only about two dozen times in over 200 years since our independence. The first ten you can't really count since it was a requirement to get the colonies to agree to the constitution in the first place.

People have spent a lot of time, money, and effort trying to protect or ban flag burning as a right to free speech which I think is the biggest tragedy of all. Of all the problems in this world to get worked up about, of all the millions of people around the globe who are starving, sick with AIDS, or tortured for having an opinion about their government, why the hell would anyone spend two minutes worrying about whether someone else can burn a flag or not?

Let's say we did ban it. What then? People who are so upset at the government to burn the American flag probably aren't going to let a little civil disobedience stop them. Never has before--civil disobedience has been a very popular option over the years for those who wish to protest, and making it illegal would just give those guys another way to attract even more attention than before. I sure as heck don't want to PAY money to keep such hardened, flag-burning criminals in jail. And when push comes to shove, they'll still show their disrespect for our country. Perhaps they'll buy little figurines of an eagle and drive over them.

But banning the flag burning--where does it end? Should we outlaw all forms of protest that might be considered disrespectful to our national symbols? What if we want to throw an anti-war protest and include a burning effigy of President Bush? After all, he's the face of the American government at the moment, and protesting him or anything he does could be considered anti-American.

Now, I'm not a flag burner myself. I'm pretty fond of this country I live in--despite the terrible things this country has done in the past from allowing slavery to the near extinction of the Native Americans. I don't know about the rest of you, but it seems to me that they've earned the right to burn the American flag in spades for the way we've treated them.

What if the shoe were on the other foot? What if you lived in Cuba and Castro decided to make flag burning illegal? Would that be terribly bad? Ruthless dictatorships don't really deserve much respect, in my humble opinion. The irony, of course, is they can ban flag burning far more easily than a free country such as ourselves.

If you don't like flag burning--try something new. Ignore them. Don't give those people the time of day and when they realize their message isn't getting across, they'll stop and do something else.