The money vacuum at 7-Eleven
It’s July 20, 2022. Here’s the rundown:
Clearly, inflation is millennials’ fault
The lottery: A giant money vacuum
Numbers, links, and more
Clearly, millennials are to blame for inflation
Millennials have killed everything, and now, one guy wants to blame them for inflation.
Image source: Twitter
I hate that we have a ceaseless desire to point the finger. We’re always looking for someone to blame. We’re facing big issues, and instead of saying “here’s what I plan to do about it,” or, “let’s put our heads together and come up with a solution,” we put a lot more effort into ensuring that somebody else is held responsible.
Look no further than our former and current presidents for an example. If Trump could be distilled down to a single quote, it would be “I don’t take responsibility at all.” More recently, Biden has been trying to blame Vladimir Putin for inflation-related issues (“Putin’s Price Hike” — come on, man). While Putin’s war in Ukraine has played a role, there are many other things to actually blame.
But for seemingly 25 years, it’s been fashionable to blame one group for just about everything: Millennials. Millennials have racked up a kill count that would make Gary Ridgeway envious — we’ve killed Applebee’s, Macy’s, the nuclear family, and much more.
This past week, we (I say “we” because I, too, am a bloodthirsty millennial) were blamed for inflation, too. That’s right, those damn kids — who are now 40 years old — are the ones causing inflation.
That’s what Bill Smead, chief investment officer at Smead Capital Management, told CNBC last week.
“See, what everyone is not including in the conversation is what really causes inflation, which is too many people with too much money chasing too few goods,” Smead said, somehow ignoring the thing that everyone is including in the conversation about what really causes inflation.
His premise is this: there are 92 million millennials in the U.S., and now they’re all buying stuff like cars and houses and having kids — since they couldn’t afford to until now. All that demand is driving prices up.
Of course, inflation is occurring all over the world, where pesky American millennials don’t have much sway, but of course, it’s easy to blame them anyway. After all, inflation is a hard topic to explain, and there are a hundred different factors that are causing it. The pandemic is the biggest.
But why bother arguing? We’re in a “blame-who-you-want” type of world these days, so go smack the avocado toast out of some 36-year-old’s hand and shake your finger at them for wanting a house.
Hate money? Play the lottery!
Pictured above: Not you, not me.
We all want to win the lottery. But few, if any of us, actually will — and that may be a good thing, because hitting the jackpot tends to ruin the lives of many lottery winners. Or end them, in one case.
Okay — winning the lottery is probably a good thing. But let’s face it: It’s probably not a good use of many people’s very limited resources to be buying lottery tickets, scratch-offs, or pull-tabs. You can play the lottery in almost every state, too.
Image: La Fleur’s 2021 World Lottery Almanac shows the years each state adopted its lottery. (Jenna Cohen/Howard Center for Investigative Journalism)
And while there may be some bare-bones financial reasons not to play — like instead saving your money to pay for lunch or a tank of gas — the findings of a recent investigation show that there’s another reason to abstain.
State lotteries serve as money vacuums, transferring billions of dollars out of poor communities, and into the coffers of giant corporations.
The investigation, conducted by journalists from the Howard Center for Investigative Journalism at the University of Maryland and Boston University, found that lottery retailers tend to be clustered in low-income areas in most states, and that most people making purchases at those stores are from those same communities. As such, most of the people buying lottery tickets are from low-income backgrounds.
Here’s the meat: People spend $82 billion every year playing the lottery, and lose $29 billion. From one of the stories stemming from the investigation:
“Of course, you know, I’m expecting to get my money back,” Standifer said. “But if I don’t, it’s just fine. I’m still gonna buy it.”
Standifer’s spending is one small part of the $82 billion now spent annually by lottery players, the first input in a nearly nationwide system that brings state-sponsored gambling directly into a majority of U.S. neighborhoods through more than 200,000 retail stores.
Standifer — and millions of players like her across the country — get about 65 cents on the dollar back as winnings. Put another way, they lose about 35 cents for every dollar they spend. Those losses are why the lottery exists.
“Yesterday I spent like $130 and I won like $85,” Standifer said on that snowy April day.
The $45 Standifer lost will leave this neighborhood north of Detroit, just a sliver of the $29 billion lost annually by players in the 45 states (plus Washington, D.C.) that have a lottery. Those losses fund government programs and enrich others, such as a Canadian private equity billionaire and a Japanese convenience-store conglomerate that profits from more than 10,000 U.S. lottery retailers.
In the popular imagination, the lottery is funded by people who spend a few dollars on a Powerball ticket when the jackpot gets big. This is not reality.
So, effectively, people are losing $0.35 for every dollar they spend each and every time. In all, lottery tickets are easy carrots to dangle in front of low-income people, while they fantasize about what they’d do with the winnings. They’ll never win, of course, and millions will keep buying more and more tickets. They may win $50 here and there, but they’re putting a hell of a lot more money in than they are getting out.
The big question: Where’s all the money going?
Obvious answer: Not you or I. Or the people playing. The $29 billion in profit goes to a number of parties, including stores that sell tickets, lottery operations companies, advertisers, media companies, governments, and more. While some of the proceeds fund government programs, billions are siphoned off by private companies (which is the whole point), and the monopolistic and parasitic nature of lottery sales in low-income communities serves as a money pipeline from those who have little, and who are desperate, to those who already have a lot.
Of course, nobody’s holding a gun to anyone’s head and making them buy scratch tickets. But it’s clear that this whole system has been optimized and put into place to take advantage of certain people.
There’s no harm in buying a scratch ticket here and there, assuming you can pay rent and not starve. And this investigation may not be digging up anything all that surprising — but the extent to which lotteries prey upon people is, to me, surprising.
A common refrain is that the lottery is a “fool’s tax” or “idiot tax,” and there may be some truth to that, as callous as it is. But lotteries are also designed to make people think that they have a chance, and that, to some extent, it’d be foolish NOT to play — there’s so much at stake, after all, and a ticket only costs $1 or so.
To sum it up, playing the lottery isn’t a good financial decision. It can be fun, sure, so long as you don’t go overboard. But the revelation of just how predatory lotteries are should have us all rethinking playing at all.
Numbers, links, and more
42%: Percentage of Americans that actively avoid the news at least some of the time. (Reuters Institute)
80%: Percentage of the baked bean market owned by Bush’s, which just inked a three-year deal to be the official beans of the Southeastern Conference. Big Bean is crushing the little guy. (Sports Business Journal)
12%: The percentage of new car payments that are more than $1,000 per month. (Car and Driver)
“Does growth ever become uneconomic?”: A good god damned question. (The New York Times Magazine)
“Just a rock”: Turns out that gold isn’t a safe haven during times of inflation. It’s just a rock. (All Star Charts)
As someone who just made it into the tail end of the Boomer generation, I personally find it embarrassing when I hear other old guys (and girls) pompously blaming everything on millennials. Really?
Who was in charge during the Great Recession and the other calamities that destroyed the economy and made life miserable for them? Who told them (when they were teenagers) to take out massive student loans because they would get great jobs paying enough to pay them off? I could go on, but you get my point.
Besides the blame the millennials game reminds me of those TV preachers who blame earthquakes and tornadoes on gay people. If you really believe gays have the power to control the weather and cause the earth to shake then I think I’d be really really nice to them. Same with millennials.
No one is talking about too many dollars chasing too few goods except for this guy???? Can you have a conversation about inflation without talking about just that? It is most definitely the millennials fault.