Gambling and Tourism Won't Save the Economy

image: Little Cubs Field--a desperate attempt to generate tourism dollars

The most surprising thing about the recent announcement that one-quarter of the casinos in Atlantic City are shutting down is that anyone is really surprised by it. The article from nj.com I just linked provides the following explanation:

Since 2006, Atlantic City's casino revenue has plunged from a high of $5.2 billion to $2.86 billion last year. It has been beset by competition from Pennsylvania, which has surpassed it as the nation's No. 2 casino market after Nevada, and suffered further losses with additional casinos coming online in New York and Maryland.

Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton College, said the resort has been dealing with casino saturation for a while now.

"We know that the oversupply of gaming product is a regional issue, as we're seeing the effects of the pressure all around Atlantic City," he said.

So in other words, when every state and jurisdiction opens a casino to draw out-of-town visitors who'll spend the money that will then replace jobs and tax revenues being lost in other sectors, sooner or later they stop being an advantage for everybody. I'm not really sure just how dumb you have to be not to see that obvious fact, but the article states that economists predicted this inevitable occurrence as if it were some sort of blinding revelation.

This simple truism about gambling can also be applied to tourism in general. Many depressed locales have tried to reinvent themselves as prime tourist destinations, such as Cleveland did by landing the Rock'n'Roll Hall of Fame, handing out hundreds of millions of dollars to billionaire sports team owners for new stadiums and sprucing up its downtown area so visitors would feel safe walking the streets at night. So how did all of the that work out for Cleveland? Well, beyond the downtown's glitzy bright lights it is still almost as big a shit hole as Detroit--the kind of place where just being born there tags you as someone who has no hope of a future even remotely resembling the pie-in-the-sky American Dream.

Even my own hometown of Freeport, Illinois got into the act. Regular readers of this blog will recall that back during the last thoroughly discouraging and depressing presidential election, I wrote several posts about Romney's old pals at Bain Capital shutting down one of the local factories, transferring the jobs to China and having the unmitigated gall to ask the workers there to train their Chinese replacements.

Not coincidentally, Freeport made an effort a few years ago to try and combat the relentless loss of industrial jobs in the town by trying to generate tourism. Now, I can tell you from having spent the first two decades of my life there that a little rust belt city entirely surrounded by nothing much except cornfields has very little to recommend it as a tourist attraction. 156 years ago, one of the famous (assuming you know your American history) Lincoln-Douglas debates took place there. Nearly a quarter of a century later, a mentally unhinged Freeporter assassinated the President of the United States, but that probably isn't the sort of thing the local Chamber of Commerce is really interested in playing up. Since then? Um...I've got nothing.

So what did they finally decide to do to bring in hordes of visitors and their loose dollars? They, I shit you not, built a miniature replica of Wrigley Field. Never mind that the REAL Wrigley Field is only about a two hour drive away. Even sadder is how the website describes Freeport: "Freeport, Illinois, A Scenic And Historic Section Of Northwest Illinois Between Chicago And Galena." Because that's all Freeport really has going for it these days: history. And as I've pointed out above, there ain't really all that much of it.

Obviously, Little Cubs Field, as it is called, hasn't done much to save Freeport's economy, much as Atlantic City's casinos have ultimately proven a failure in lifting that unfortunate burg out of the postindustrial age mire. Just a couple of weeks ago my father, who was once employed by the local Goodyear factory, told me that the plant is cutting its work force again, and will be down to about one-tenth of the 2400 employees it had when he retired 20 years ago. Dad also expects the plant will be closed down for good in a few years, having existed for merely the entirety of his adult lifetime. But don't worry, I'm sure some of those laid off workers can get jobs this summer working at the concession stands at Little Cubs Field.

It's amazing to me that a country in which wages and benefits for most workers, especially paid vacation days, are being endlessly slashed and the word "staycation" has entered the popular lexicon, that any of the so-called "experts" who get paid to consult with state and local governments about how they might increase revenues and employment could with a straight face espouse the idea that an endless sea of tourism dollars is out there just waiting to be exploited. As it stands right now, the tourism industry is being propped up by more affluent older Americans who are downsizing their living arrangements (i.e: selling off their assets) in order to do at least a few of the things they wanted to do while they were still working. But when the country begins to run out of bucket-listers who still have a bucket to pee in, tourism is yet another industry facing an inevitable epic crash.

But hey, if you're interested, all events at Little Cubs Field feature free admission. And for this little bit of faux Americana, it's worth exactly what you pay for it.


Bonus: The problem these days, Bruce, is that the trouble ISN'T "busing in from out of state"

Strauss Discount Auto Shutting Down All 46 Stores

From North Jersey.com:

Strauss Discount Auto, the 93-year-old company founded in Newark, has filed for Chapter 11 bankruptcy protection for the fourth time, closing all 46 of its stores, including 24 in New Jersey.

The troubled auto-parts retailer formerly known as R&S Strauss abruptly shuttered its retail outlets - including two shops in Wayne, and others in Bergenfield, East Rutherford, Lodi and Passaic - and filed its petition in federal bankruptcy court in Newark Tuesday. The company also dismissed 580 employees, according to the Chapter 11 filing.

On Wednesday afternoon at the Strauss Auto store on Route 23 in Wayne, two signs on its doors said, "This store is closed." The signs also advised customers with inquiries to call 800-787-4554, Strauss's regular customer-service line.

The recording didn't mention the Chapter 11 filing. It merely said, "You have reached Strauss Auto ... We are on the line right now attending to other calls, but want to address your issue." It then asks customers to leave a message.

In Wayne, where the parking lot was empty and no one was inside, the signs also advised store managers to contact their "DM," district manager, and for store associates to contact their store manager.

In addition to its New Jersey shops, Strauss Discount Auto closed 19 stores in New York City metro area and three in Pennsylvania, according to the filing. Strauss president Joseph Catalano also explained some of the reasons for the company's latest financial woes.

"Increased power, gas and fuel costs have caused consumers to delay vehicle service and replacement expenditures," Catalano said in a filing. "Mild winter weather also resulted in a disappointing 2011-2012 winter selling season and a subsequent decline in spring business due to a lack of winter driving conditions."

One would think that with people not being able to afford to buy as many new cars and keeping their old ones longer that car repair would be a booming business. Not so much, however, if drivers are becoming financially tapped out. It's scary to think that many people are putting off vital maintenance and that their cars may thus be more likely to break down in heavy traffic. Chalk it up as yet another dire example of our crumbling transportation infrastructure.


Bonus: From my You Tube channel - another little ditty about driving

Desperately Seeking Tax Revenue, New Jersey Stoops To Stealing Gift Card Balances

First off, it must be pointed out just what a ridiculously bad deal gift cards are. By paying, say, $5 extra to purchase a $100 card, the buyer is basically handing free money right over to whatever company issued the card. So they were already not the smartest purchase a person could make, and if the State of New Jersey persists in its latest nefarious tax collection scheme, it's about to get a whole lot worse. Here is Huffington Post Money with the details:

Like many states on the hunt to fill in budget shortfalls, New Jersey is getting creative. The state is making a grab for its residents' gift cards.

If you live in New Jersey and wait more than two years to cash in on that Red Lobster gift card that your boss gave you, you'll be out of luck. Under a new state law, New Jersey will take control of funds on gift cards that have not been used for two years. The law could potentially translate into millions of dollars for the Garden State, which would hold the gift card money as "unclaimed funds." That means New Jersey will keep that money in state coffers rather than a consumer being able to access it through the card.

But gift card makers, unwilling to part with so much money in unredeemed funds, are fighting back, pulling out their wares from the state altogether. On Thursday, Blackhawk Network and InComm, the companies behind hundreds of major name-brand gift cards sold through thousands of vendors, said they are pulling their cards from New Jersey vendors starting on June 30 if not sooner. Earlier this week, American Express pulled its cards from New Jersey retailers.

The new law would make card sellers responsible for gathering from buyers certain personal information, such as a ZIP code. That information would then be used by New Jersey to collect the unused money on the cards into the state's unclaimed money fund 24 months after the last time these cards were used.

There are a couple of issues to consider here. First there is the invasion of privacy aspect of collecting customers' personal information. But that seems to be pretty much par for the course in America these days. Corporations and the government continually push the limits in that area, and as long as the vast majority of the public remains completely asleep at the switch about it, nothing is going to even put the brakes on that particular trend.

But more importantly, exactly what justification is there for this method of tax collection? It is so completely arbitrary as to have the appearance of out-and-out theft. Don't get me wrong, I am not an anti-tax reactionary. Government needs money to operate, and taxes are the price people pay for living in any society. But those taxes should be fairly and equitably assessed and there should at least be some articulable justification for them. This asshole move fails on both counts.

Heaven forbid that the Garden State might consider a more just and equitable tax to try and make up its budget shortfall, like maybe one on all of those financial sector scumbags who live in the state. Taxing a fucking asshole banker just for BEING a fucking asshole banker is every bit as arbitrary as confiscating people's gift card balances. And you know that one of the reasons this odious law passed is that millionaire bankers don't buy $100 Best Buy gift cards.

But wait, the state might argue, this action isn't REALLY theft because we have provided a fail safe:

Procrastinating residents could still obtain any remaining balances on the gift cards by contacting the state's unclaimed funds office.

Oh yes, that is just what I would want to do if my gift card balance got confiscated, wrestle with the state government's Orwellian bureaucracy trying to get my $100 back. How much do you want to bet that the office that would field calls about such inquiries will have the biggest nightmare of an automated telephone answering system ever installed in any government office? If you are ready to abandon all hope, please press 7.

But who is ultimately responsible for this abomination? Why, you are of course. And by "you," I mean the average dumbass American consumer:

Under federal law, gift cards must be usable for at least five years after purchase, though most do not have any expiration date. Consumer advocates have criticized gift cards because consumers often forget about them or leave balances unused.

Redemption rates are low for cards and as much as $41 billion in the United States went unspent on all gift cards from 2005 to 2011. In some cases, activation or dormancy fees can eat up small amounts of money left on cards. All these things have made them lucrative for card makers.

It kind of makes you wonder why stores even bother charging the $5 purchase fee in the first place, doesn't it? You would think that sales of the cards, and hence profitable unredeemed balances, would be even higher if they just gave them out for free.

What can you say about a society which is so wealthy yet addle-minded that its citizens can afford to piss $41 billion down the sewer for nothing? There are whole countries out there that don't have a GDP that large. To put that number in perspective, it equals over $100 for every man, woman and child in America. That means the average family of four has put over $400 onto unused gift cards and have just forgotten about them. No wonder so few people get upset and protest moves like one. It's not like they even noticed just how blatantly they were getting ripped off in the first place.


Bonus: The gift

Verizon lays off 336 N.J. Workers Because of Dropoff in Copper Line Customers

Still cleaning out the mass layoffs backlog. This one from last week was reported by New Jersey.com:

Verizon will lay off 336 New Jersey workers from jobs maintaining traditional copper wire networks because of dwindling demand for landline phones, the company said today.

"A little more than 10 years ago, Verizon served between 6.7 to 6.8 million phone lines in New Jersey," said Verizon spokesman Lee Gierczynski in an interview. "Today, the company serves 2.5 million phone lines, so the business has seen a dramatic drop...this is how the telecommunications industry has evolved in the last 10 years."

The workers, based in Boonton, Plainfield, Freehold, Ewing and Egg Harbor, will be cut from the payroll in the next 21 to 60 days. After the move only 20 employees will remain in the Verizon Connected Solutions unit, which worked on the company’s copper line network, Gierczynski said.

Not really a whole lot you can say about this one except that it would suck to be a copper line telecommunications specialist in today's wireless world.


Bonus: From a once ultra hip band, this song is now a throwback to another place and time

Wave of the Future: Everyone's a Temp

With the huge waves of unemployment that have struck the American economy these past few years, and the ongoing off-shoring of jobs overseas, the next logical step in destroying the already frayed job security of American workers would be to make everyone reapply for their own jobs every few years. In other words, make everyone a temp. Sadly, as reported by NPR this week, the idea is already being test driven by an Atlantic City casino:

A new casino set to open in Atlantic City, N.J., has announced it will set term limits for its front-line staff. When employees' terms run out, they'll have to go through the hiring process again. The casino says the policy will keep its service fresh. Others say the company is taking advantage of a tough job market.

From bellhops to dealers, employees of the new casino — called Revel — will be hired for terms from four to six years. After that, they have to reapply for their jobs and compete against other candidates.

Revel declined to make anyone available for an interview. In a written statement, the company asserts that its employment policy will help it "attract the most highly professional people who are inspired by a highly competitive work environment."

But it's an unusual way to go. Many who work in employment law or advocacy say they've never heard of anything like this before.

"What they've done here is set up a system that puts their good performers through a gauntlet of having to compete with people who have no record of performance," says Alice Ballard, a prominent employment attorney who works out of Philadelphia.

The motivation for the company to do such a thing really isn't so hard to spot:

Ballard thinks that "other reason" is probably age. To her, this reapplication process looks like a low-profile way for the casino to regularly weed out older employees.

And thus hold down wages in addition to not having to pay the higher medical costs that inevitably come with a more experienced work force.

At least one worker recognized what a social disaster it would be if this practice every became widespread:

"How can you buy a car if you don't know you're going to have a job?" Payne asks. "You want to refinance your home; you want to buy a home. I mean, these have always been decent jobs, good-paying jobs, sustaining jobs. But my concern is, you get this job — and then you have no job security."

But nevertheless, he expects there will be plenty of applicants:

Payne, a union member, says the new jobs aren't what were promised when gaming came to Atlantic City.

But a lot of people laid off from casinos in Atlantic City in the past few years still haven't found work. He says that even with Revel's tough hiring policy, those people probably will apply.

There's a cliched phrase in sportscasting that is appropriate here: "The Future is NOW!" In that spirit, welcome to the new dystopia.


Bonus: The trouble isn't busing in from out of state anymore...it's already in Atlantic City

States Doubling Down on Bad Gambling Bets

I've posted several stories here on TDS about recent decline of the gaming gambling industry in the United States as the throngs who used to fill the casinos find themselves unable to come up cash to throw away on the slots or at the Blackjack table. And yet despite all of the evidence that the industry is in deep trouble and no longer the cash cow it used top be, there are still plenty of localities lining up, hoping to boost tax revenues by overcoming their previous resistance to legalizing gambling and opening casinos of their own. MSNBC has the details:

A Malaysian company's plan to build a $4 billion convention center and big-time casino on the outskirts of New York City could be the biggest shot fired yet in a tourism arms race that has seen a growing number of Eastern states embrace gambling as a way to lure visitors and drum up revenue.

New York Gov. Andrew Cuomo announced last week that he would work with the Genting Group, one of the world's largest and most successful gambling companies, to transform the storied, but sleepy, Aqueduct horse track into a megaplex that would eventually include the nation's largest convention center, 3,000 hotel rooms, and a major expansion of a casino that began operating at the site in October.

The proposal came less than two months after once-puritanical Massachusetts passed a law allowing up to three resort casinos, plus a slot machine parlor, at locations around the state.

Ohio is poised to see its first commercial casinos open this year, after voters approved up to four gambling halls in 2009. Maryland's first casino opened last year, with more on the way. Pennsylvania's first casinos opened in 2006, and already the state is threatening to surpass Atlantic City as the nation's second-largest gambling market.

And in Florida, lawmakers are hotly debating a whopper of a bill that would allow up to three multibillion-dollar casinos, plus additional slot machines at dog and horse tracks. Genting appears confident the law will pass. It has already spent around $450 million to acquire waterfront property in Miami, where it wants to build a $3.8 billion complex that would include a casino, dozens of restaurants and a shopping mall.

States have embraced casinos, after years of trepidation about their societal costs, for two simple reasons: a promise of a rich new revenue source, plus the possibility of stimulating tourism.

The article itself actually does a very good job of raising questions as to whether this latest desperate revenue grab by the state governments is at all advisable:

Some experts, however, have questioned whether revenue bonanzas that large are realistic, and say states should be cautious about giving up too much to lure these projects. Competition for a limited pool of gambling and tourism dollars is already fierce, and recent years haven't been kind to casinos.

Nevada's larger casinos lost $4 billion in 2011, according to a report released this month by the state's Gaming Control Board, as the state continued to feel the effects of the global economic slump.

As gambling options have increased in the East, revenue has slid substantially at the pair of Indian tribe-owned casinos in Connecticut and declined by a dramatic 30 percent in Atlantic City, which has lost customers in droves to the new casinos in nearby Philadelphia, according to David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas.

So the latest players in the legalized gambling game plan to spend billions of dollars to spread the wealth that much thinner even as the slowly collapsing economy continues to squeeze the mass of players suckers they need to be able to make a profit.

How much more proof do you need that the so-called "leaders" of our society are completely out of ideas and have resorted to merely shuffling the deck chairs on the titanic?


Bonus: Wait a minute, is that music I hear on the promenade deck?

Chris Christie Courts the Anti-Snooki Vote--and Wall Street Cash in Presidential Bid

In my September 16th Friday Rant, "Yo, New Jersey, Y U B Giving Snooki a Tax Credit?" I called out New Jersey Governor Chris Cristie for saying he couldn't veto a $420,000 state tax credit for the utterly insipid reality teevee show, Jersey Shore, despite the fact that cities in his state have been laying off teachers and police officers in large numbers. Well, according to a report yesterday by Talking Points Memo, since then Christie apparently decided to grow a pair:

New Jersey Gov. Chris Christie (R) has vetoed a $420,000 "Jersey Shore" production credit that was criticized by local lawmakers as a "fake tanning" tax break and "a terrible, terrible and misguided waste."

"I have no interest in policing the content of such projects," Christie said in a press release. "However, as chief executive I am duty-bound to ensure that taxpayers are not footing a $420,000 bill for a project which does nothing more than perpetuate misconceptions about the State and its citizens."

Hmmm...why the change of heart all the sudden? You don't suppose...yep, that's right, someone is looking to throw his hat, as well as his considerable girth, into the President ring. Here is Talking Points Memo again:

There’s a lot of buzz around a Chris Christie run this week, thanks mostly to an all-out effort by big money Republicans to recruit him for a run.

So who are these guys? In July, Christie attended a meeting with a “who’s who A-list of successful fundraisers,” as FOX News put it to discuss a possible presidential bid. The group reportedly included several billionaires, including its host, Home Depot co-founder and venture capitalist Kenneth Langone, who appears to be the most enthusiastic driver of the Christie boomlet.

Langone, 76, has emerged over the last two years as one of the loudest critics of President Obama’s Wall St. vs. Main Street rhetoric. At a CNBC Town Hall last year, Obama himself was asked about Langone’s statement that the White House should stop making “people in business feel like we’re villains or criminal.” The President replied that he was “absolute not” vilifying the private sector, noting that he’s cut taxes on businesses repeatedly. Langone isn’t a total hardliner, however: he endorsed raising taxes on the rich during debt ceiling negotiations so long as the revenue was dedicated entirely to helping pay down the deficit.

New York hedge fund billionaire Paul Singer is also named by Politico as one of the leaders of the latest Draft Christie movement. Singer was a major fundraiser for both George W. Bush’s and Rudy Giuliani’s presidential campaigns. He also bankrolled an unsuccessful 2007 effort in California to try to pass a ballot measure ending the winner-takes-all system for California’s electoral votes, which would provide a massive boost to Republican presidential candidates. Like Langone, he has a moderate streak as well: he helped fund efforts to pass New York’s landmark law allowing same sex marriage this year.

Another key Christie backer: FOX News CEO Roger Ailes. According to New York Magazine, Ailes begged him to run before the presidential race got under way and brokered a meeting between Christie and Rush Limbaugh.

Oooh...it looks like the Republican faction of The Big Money Boys has quickly soured on the odious Rick Perry, who so convincingly proved himself to be Not Ready for Prime Time. So in their desperation to back anyone other than Mitt Romney, who is seriously disliked by social conservatives, they are now turning to the caustic, half-term governor of New Jersey.

Look no further for an example of just how broken our political system is than the repeated meteoric rises and crashes this presidential election cycle of candidate after candidate on the Republican side. At one time or another Sarah Palin, Donald Trump, Michelle Bachmann and Rick Perry were all touted as the "savior" of the party by conservatives, briefly led in the polls among likely Republican primary voters, and then crashed and burned once the media actually began to pay attention to the endless stream of stupid things coming out of their mouths.

Christie might fare a little bit better than the rest of them because he seems to be somewhat more politically adroit, as his conveniently-timed veto of the "Snooki Subsidy" shows. But by being so openly courted and touted by Wall Street players and by Fox News, it is obvious that no one who is not a millionaire of a billionaire should ever be duped into thinking he is on their side.

Friday Rant: Yo, New Jersey, Y U B Giving Snooki a Tax Break?

The state of New Jersey has been hit hard by the financial crisis. Like many other troubled states, it has struggled to reduce spending in state programs as tax revenues decline. Last spring, Governor Chris Christie battled publically with the state’s teacher’s unions over pay raises and layoffs. In January, the unfortunate city of Camden laid off HALF of its police force, with predictable results as reported by the Huffington Post:

New Jersey's most crime-ridden city has been even worse since nearly half the police force was laid off in January.

A Camden County Prosecutor's Office report obtained by The Courier-Post of Cherry Hill and the Philadelphia Inquirer shows there have been 79 aggravated assaults with a firearm this year in Camden, up from 22 during the same period in 2010. Shootings nearly doubled, increasing from 16 to 30.

Given the above, you would think that the “leaders” of the Garden State would be extra careful about not only about spending, but also who gets awarded any business tax credits. Well, as has happened so often before on this blog, your common sense assumption sadly hits well wide of the mark. Here is Talking Points Memo with the rather gruesome details:

A number of New Jersey lawmakers are outraged that the state has awarded a $420,000 production tax credit to the hit MTV reality show "Jersey Shore" because, as one GOPer put it, "I can't believe we are paying for fake tanning for 'Snooki' and 'The Situation', and I am not even sure $420,000 covers that."

On Wednesday, NJ.com reported that taxpayers would be paying the credit for the show's first season in 2009, as approved by the New Jersey Economic Development Authority.

But wait…before you run into your kitchen to retrieve a salad fork with which to stab out your own eyeballs, there’s more:

But, Christie's office said, "the Governor cannot veto EDA action that is in compliance with non-discretionary, existing law....The bottom line is that the governor has not been in favor of this tax credit, and this and other applications were in the pipeline from the prior administration.

Okay, now you can head for the kitchen. It’s all right; I’ll wait.

Because that is the only sane reaction one can possibly have upon reading this story. I just love how all the politicians in New Jersey are standing around with their thumbs up their asses pointing fingers at one another while claiming there is nothing they can do to stop this particular fiscal abortion. Gubbner Christie was a acting like a big ol' tough guy last spring, throwing his not inconsiderable weight around and calling the leaders of the teacher’s unions thugs and whatnot. But apparently all Snooki has to do is flex her bicep and bat a fake eyelash and suddenly he turns into a tub of goo.

Memo to Chris Christie: the last time I checked, that little “R” that appears after your name stands for Republican. And exactly when did the party whose most recent President once infamously referred to the Constitution as a “damn piece of paper” start giving a flying fuck about the rule of law? We can hold prisoners indefinitely at Guantanamo without trial, but you say you can’t veto a business tax credit for an utterly dim-witted reality television show? Give me a fucking break already. Even President Hopey-Changey had the balls to tell Congress to go fuck themselves when they started moaning on about the War Powers Act during the Libyan bombing campaign.

Could this be any more of a glaring example of just how far out of whack the priorities are in this country today? It was bad enough when Rutgers University used student tuition funds to pay a speaker’s fee for Snookie to come and give a talk on campus, but now we find out that apparently the entire New Jersey state government is made up of Rutgers alumni. Where is Tony Soprano and his crew when you need them? THAT guy was one Jersey dude who wouldn’t have been intimidated by the likes of Snooki.

(Editor’s Note: the title of this post is a tribute to the late author and blogger Joe Bageant, whose last ever blog entry before he succumbed to cancer early this year was so memorably titled, “America, Y Ur Peeps Be So Dum” We miss you, Joe.)