Monday, February 19, 2007

Our Kids Lose, Too!

A lot has been discussed on the sale of the Texas Lottery to a private firm. I wanted to chime in on this for awhile and was waiting for the right time.

It’s the right time.

This article which appeared in The Chron really gets me. Senators aren’t worried about the fact that sale of the Lottery, and use of the proceeds to invest in publicly traded stocks, bonds, and whatever, toachieve a highly questionable 9% rate of return is risky business.

Having been in the stock market for awhile now, I can personally attest that long-term profits in any given portfolio do not come close to 9%. If they did the banks would be out of business. Rick Perry makes the claim that a private company will be able to be smarter than the folks currently running the lottery, who, apparently, are of only mediocre intelligence. But in tandem with having mediocre lottery commission employees, evidently the state employs brilliant capitol investment bankers who can pull off what people at Shearson-Lehman, E.F Hutton and Smith-Barney cannot do.

What are Texas State Senators worried about? That the private lottery firm will expand its business into other venues like video slots.

Says State Senator Troy Fraser (R-Horseshoe Bay):
"My concern is is that this is opening the door to the mentality of slots in 7-Elevens. I don't want slot machines in 7-Elevens."
And why not? This isn’t a communist state is it? Isn’t a company entitled to maximize its profits? It’s called free enterprise. Here we have it again. We don’t want to expand gambling because it’s the work of Satan (and Indians).

Do I want slot machines in 7-Elevens? Of course not. I just wanted to point out the hypocrisy of the senator's viewpoint.

Selling the state lottery is a bad, bad, bad idea. It’s an idea akin to privatizing Social Security. But instead of putting millions of peoples retirement accounts at risk, we are risking the education of our children. Putting public education funding at the mercy of a toss of the dice – because there are no sure things in the world of investments – is ludicrous in every aspect.

So ludicrous that you have to wonder what is really behind this.

I was not living in Texas when the constitution was amended to establish the lottery commission, but I bet I know how voters were swayed into approving this. I’ll bet there was an ad campaign that used the words “Hey! Our kids win, too!”

Well you can add something else to that if Perry gets his way and the lottery is sold for his paltry $14 billion. After the next stock market “correction” we can all shout out loud and proud “Hey! Our kids lose, too!”

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