SLOTTED FOR FAILURE

In the mid-1980s I was driving through the British Midlands—the Birmingham, Leeds, Liverpool, Manchester postindustrial wasteland of public housing, social problems, and deferred dreams. I turned to my wife and said, “Behold, the future of the United States.” At the time most Americans were too busy wallowing in the self-congratulatory excesses of Reaganomics to allow sober reality to intrude. Reagan prosperity ended up being a myth constructed from reckless borrowing, selling American assets to foreign venture capitalists, and a temporary consumerist orgy from elites with windfall tax savings to spend.

I was reminded of this when I read that Massachusetts Treasurer Timothy Cahill is touting slot parlors as a way to generate $3 billion of yearly revenue for the Commonwealth. Gambling is always a form of regressive taxation in that it encourages those with the fewest resources to spend non-disposable income. That aside, Cahill’s plan is slotted for failure because it’s the same smoke-and-mirrors trick as Reaganomics—it’s a symptom of a wrecked economy, not the solution for it. Like Reaganomics, any benefit it brings will be temporary and illusory.

Slots and all other one-size solutions are the economic equivalent of diet pills—easy-fix frauds that delay taking the arduous steps necessary to repair damages resulting from long-term abuse. How many easy answer flops do we need to witness before we realize that diversified restructuring is needed? Or that service industries cannot be sustained unless the economy actually produces material goods to sustain it? Remember the 1970s when Quincy Market was touted as the template for rescuing inner cities? Or how 1980s high-tech corridors would be the engine of the “new economy?” Or the Clinton-era emphasis on tourism? Each was an all-eggs-in-one-basket plan that failed. And lest we forget, lotteries such as the one Massachusetts enacted in 1972 were supposed to make states solvent in perpetuity.

It took decades of bumbling to ruin the American economy. Correcting it will require patience, diligence, and the resolve to reject false hopes. We can either begin that task now or fly to the Midlands to see the future.--Lars Vigo