Andy Rooneey Comment

There's only so much money in the world and if it's lost at a gambling table, it's money that isn't spent on things America makes. I mean who's best for this country - a machinist at an automobile plant in Detroit or a blackjack dealer in Las Vegas?

There's only so much money in the world

Is he kidding? I mean Economics 101 says there is no fixed amount of money in the world. Does all this money we are spending on digital information (movies, television, software, etc.) mean that there is less money for automobiles. Car manufacturers have only made a profit on financing their cars for more than a decade.

The Wiz is already discussing this in his blog.

I'm not sure why he decided to put it in a blog rather than the forum, but, whatever.

There are several replies.

Wizard's Andy Rooney blog entry

I lived years in the Steel Belt when it was thriving and I have to tell you I absorbed the thinking that was going on in those places. Folks preached the benefits of Manufacturing and made it sound very essential. You could include Farming, but they made it sound like Services in general were totally dependent upon an underlying means of producing something first.

I have never been able to totally shake this kind of thinking and I do see it pop up other places sometimes, as in the Rooney comments. I can believe "there is no fixed amount of money in the world" and I certainly recognize there is no need to sit around worrying about the whole business as Rooney is doing [comments in the Wizard's blog agreeing]. Nonetheless he is not coming up with this kind of thinking out of whole cloth. My 2 cents.

Well there is truth to the point that a society must produce something with intrinisc value to create wealth. This could be either a product or a service. I think its reasonable to assume that entertainment venues don't create wealth, they just transfer it from one group to another.

That doesn't mean service-based industry doesn't create wealth. A lot of services allow producers to increase productivity, so they thereby create wealth. Doc made this point better than I in the blog.

I don't know why I made my opinions about Andy Ronney's opinions on gambling a blog entry. That was a bad decision on my part.

Regarding the point at hand, there is no shame in providing a service that is enjoyed by the public. Those in service-based jobs should not be shamed because they are not contributing to the growth of the economy, but rather grinding it down. I don't think society should be judged by the size of its economy, but rather by how happy its members are. A good economy will bring happiness, but that is not the only thing that can. If I mow your lawn, and you cut my hair in exchange, that may be an economically neutral transaction, but not happiness neutral. Hopefully both parties performed a service they enjoyed doing, and received a service they enjoyed receiving.

In my opinion there is some optimal balance between jobs in products and services. A product-heavy economy will be wasteful of natural resources, and a service-heavy economy will find itself shut out of the benefits of global free trade. The only jobs I think are wasteful are those that perform a service that does not benefit the public. I think the IRS and the billions of hours that go into preparing tax forms are such an example, when taxes could more efficiently be collected on the consumption end. However, that is a topic for another day. To be fair, I think professional gamblers fall under that category too, for consuming goods and services only, and creating none.

To conclude, I applaud those who are gainfully employed creating some kind of service the public enjoys.

Actually, the gambling industry does create alot of wealth and lots of things with intrinsic value.

First, the actual buildings, tables, chips, hotel rooms, restaurants, and physical assets all require manual labor and construction jobs to create. Without the casinos, there would be no construction jobs to build them. Without the casinos, all of the construction jobs to build the homes to house the casino workers, roads, sewers, water, and other services would not be there.

Secondly, all of the jobs that the casino industry creates creates direct wealth for the workers there. Those dollars translate into groceries, houses, cars, cell phones, and so on and so forth, all of which require American know-how and capital.

Not everyone who goes to Vegas are losers. Certainly, most are. But is 5 hours in a casino any worse than 5 hours at a golf course, or 2 hours in a bowling alley, or 3 hours in a theater watching a lousy movie? They are all the same... entertainment.

I'd love to see Rooney come on next week and complain about what a waste of land and resources (water, trees) and time that golf courses are. Personally, I think the 3 minutes he is on each week is a complete waste of time, and just like we have the choice to gamble, we have the choice to watch.

Quote: Wizard

In my opinion there is some optimal balance between jobs in products and services.

That balance also changes, and changes very quickly. Look at how much the real estate and home improvement was driving the economy just a few years ago. People couldn't add enough decks, or improve rooms, or buy furniture for properties that just improved in value at unbelievable rate.

Tourism is one of the biggest drivers of the world economy.

If you ever have any doubt about what is the worst that can happen if the government tries to drive the economy from what it "is" to what they want it "to be" then read about China around 1960. The end result was possibly as bad or worse than WWII in death and destruction.

The really astonishing part of Rooney's comment is the part where he calls for government to outlaw gambling. This is something the Wizard did note in his blog entry.

It's ironic, too, as a respectable chunk of gambling in America is done through State lotteries.

Quote: boymimbo

First, the actual buildings, tables, chips, hotel rooms, restaurants, and physical assets all require manual labor and construction jobs to create. Without the casinos, there would be no construction jobs to build them. Without the casinos, all of the construction jobs to build the homes to house the casino workers, roads, sewers, water, and other services would not be there.

It creates far more.

There's a kid flipping burgers at McDonalds in Henderson. He has no interest in gambling. But if it weren't for the opportinities created by gambling, would his parents have even moved to Nevada a few years ago? Would that McDonalds even exist?

Gambling has turned a dry wasteland into an oasis that extends far beyond the city borders.

Quote: DJTeddyBear

It creates far more.

There's a kid flipping burgers at McDonalds in Henderson. He has no interest in gambling. But if it weren't for the opportinities created by gambling, would his parents have even moved to Nevada a few years ago? Would that McDonalds even exist?

Gambling has turned a dry wasteland into an oasis that extends far beyond the city borders.

Of course the argument is that if Las Vegas did not exist, the capital that flowed there over the last 50 years would have been invested elsewhere. Its reasonable to say that the capital directed towards LV development in the last 10 years or so could have been more efficiently allocated towards other areas of the economy, rather than construction.

Of course, its not only LV, its the massive amounts of capital that the real estate boom sucked up all over the country in the last decade. If the country is left with an oversupply of real estate - commercial, residential, whatever - its easy to look back and say the capital was not allocated appropriately. Investors lose out obviously, but society as a whole also looses out.

What good does a LV with 70% occupency rates do? Just like the gov't paying people to dig holes and fill them back in, it created temporary employment booms, but was it the most efficient allocation of capital? I'd say probably not.