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Ed Driscoll

Old Jack City

March 31st, 2012 - 5:18 pm

A couple of interesting financial stats popped up today, and we’ll see if we can tie them together in our usual tendentious fashion in just a moment. But first, found via blogger/financial author Christopher Fountain, Henry Blodget of Business Insider.com notes that “Households Earning Less Than $13,000 A Year Spend 9% Of Their Income On Lottery Tickets.” Having worked for a time during school vacations selling them, that stat doesn’t surprise me at all:

It has often been said that lotteries are a tax on the poor.

And that’s a fair description.

Joe Weisenthal pointed out yesterday that poor people regularly buy lottery tickets, while rich people only buy them when the jackpots have gotten huge.

What’s less commonly realized is just how much money poor people spend on lottery tickets.

According to a 2008 study, reported by PBS, households that earn less than $13,000 a year spend a staggering 9% of their income on lottery tickets. (via Scott Heiferman).

That’s 9% of an income that is presumably extraordinarily hard to live on to begin with.

Rich, educated people tend to ridicule lottery players because the odds against winning are so astronomical.

[UPDATE (4/1/12): A reader notes in the comments below that Business Insider is now questioning that percentage, though I've seen plenty of people spend a small fortune -- and good percentage of their income -- on lottery tickets.]

Meanwhile, at the other end of the spectrum, “Good Grief. 12% of US Millionaires Are Educators,” Jim Hoft writes at Gateway Pundit. Jim links to a Wall Street Journal article and a clip from Fox News on the topic. Keep that stat in mind next time someone (more often than a not a teacher, it seems) complains about how unfair it is that the latest superstar athlete is earning a multimillion dollar salary.*

Initially, I was going to link to these stats with an SDA-style “juxtapose” riff, or with a reference to either Jungian or Sting-ian Synchronicity. But how they’re related is, in one sense, pretty obvious, as Richard Fernandez writes at the Belmont Club. They’re both byproducts of the excesses of what Walter Russell Mead would call the Blue State model, which, after a century, and after particularly rapid growth in the last few years, is rapidly fraying at the edges:

The chief problem with money, as Walter Russell Mead observes, is that the Blue Model is running out of it. Once upon a time the money was just out there. The dollars were mooing and lowing like the buffalo on the Great Plains. The only problem was divvying it up. But now that it’s getting harder to come by, a whole host of professions based on the dollar hunting and skinning business is becoming endangered. Mead describes the situation in his vivid prose:

The dream machines of the blue social engineers don’t sail serenely across the azure sky anymore. Think of the various carbon exchanges and environmental planetary schemes; think of high speed rail proposals like California’s $100 billion train to bankruptcy; think of Obamacare. These days the experts, “social entrepreneurs” and smart young blue twenty somethings fresh out of the Ivy League whomp up social programs with as much verve and dedication as their New Deal and Great Society predecessors, but the new Dreamliners don’t take off. At most they roll around the runway, emitting clouds of noxious smoke; wings fall off, windows pop out, turbines misfire and the tires go flat.

The Big Tent is the house that  jack built. And jack has left town.

But for the foreseeable future, the distorting effects of the Blue State model will be very much in existence, to the point where they can cause a noted educator, former terrorist and buddy to the most corporatist-obsessed president in recent decades to say things such as this:

I get up every morning thinking today I’m going to make a difference. Today I’m going to end capitalism. Today I’m going to make a revolution. I go to bed every night disappointed but…I’m back again tomorrow.

Dude, FDR beat you to the punch ages ago.

* Not really apropos to this post, but as a photo essay at Yahoo Sports noted, a fair number of the superstar, highly-compensated athletes often end up in grave financial difficulties by the time they hit middle-age, for reasons that John Hawkins explores elsewhere at PJM.

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