In the stocks

Tue, 22 Oct 1996 19:37:00 +0000

only in paradise can bull markets go on forever. Unfortunately the
approximately 51 million Americans who hold shares seem to think they're
already in paradise. And no politician certainly not in this election
yearis prepared to suggest otherwise.

And why worry? The bulls have dominated U.S. stock markets ever since the
Dow Jones Industrial Average bottomed out in 1982 around the 800 mark.
Since then it has hit a record high every year since 1989. Last week, it
hit the 6000 mark. The 7000 mark could be just weeks away.

In fact, the stock market makes Las Vegas look like church bingo.
Betting on this ever-faster roulette wheel, investors have
been shifting money from lower-yielding but safe vehicles such as bank
CDs to riskier mutual funds. Last year investors poured a near-record $128 billion into U.S. equity mutual funds. They followed that with another $55 billion in the first
four months of this year.

Rolling the Dice

Wed, 18 Sep 1996 10:43:00 +0000

Who is going to pay for all those jobs that are supposed to replace "welfare as we know it"? Try America's gambling industry.

Under the new welfare law signed by President Clinton last month, expensive federal programs like Aid to Families with Dependent Children and Supplemental Security Income will be transferred to the states in the form of fixed block grants. The states
will be responsible for keeping the programs afloat, even if the block grants prove inadequate. Chronically short of funds, states will face a tough choice: cut welfare benefits even further or hike taxes.

Enter roulette, blackjack and one-armed bandits. Gambling has long provided cash-strapped states with a means to raise revenue without having to tinker with the tax laws. That explains how legalized gambling has grown into a $40 billion industry in the last two decades. In Nevada, 40 percent of state revenues come from gaming taxes. Today, only Utah and Hawaii do not permit any form of gambling. Since New
Hampshire became the first state to approve a state lottery in 1964, 36
more states have joined the club. Their argument: about 40 percent of the lottery revenue is channeled towards public education, economic development, the general fund, and other state accounts. The bottom line for each and all: revenue enhancement.

Salon.com > Paban Raj Pandey

In the stocks

Rolling the Dice