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April 15, 1999
THE LOTTERY
Whenever I walk by the drug store in my neighborhood, or the 7-11 or the liquor store, I see a line of people waiting patiently to buy state lottery tickets. Many of them look poor, and many of them are members of a minority community. There is always a line. When their turn comes, each person steps up and hands over their wrinkled pocket money -- one or two dollars, sometimes 5 or 10 --to a clerk who carefully lays it to rest in the register drawer and hands back a few little colored tickets.
These people are investors; they are investing their daily or weekly savings in the Maryland State Lottery, just the way other people invest their savings in the stock market. Like all investors, they are hoping their money will grow as time passes.
There is nothing unique about Maryland's lottery. In the U.S., government-run lotteries are now big business. Starting with New Hampshire in 1963, 37 states and the District of Columbia have begun their own lotteries in recent years. Each year these 38 governments turn a combined profit of $11 to $12 billion on their lotteries. This is $11 or $12 billion that the well-to-do and corporations do not have to pay in taxes because the poor have already paid it for them.[1] A Las Vegas slot machine pays back 90% of every dollar dropped into it, but a typical state lottery pays back less than 60% of every dollar it takes in.[2] Some states are now meeting nearly 10% of their annual budgets with their lottery profits.[1]
What does it matter if people with just a few dollars put their savings into the lottery? It matters a lot because it can mean the difference between being poor and not being poor. As many wealthy people know, if you start saving just a dollar a day when you are young, say at age 16, and invest it shrewdly you can be a multi-millionaire by age 65.
Let's compare the investment returns of two people -- one who invests one dollar each day in the Maryland State Lottery, versus a second person who invests one dollar each day using a long-established technique for making money in the stock market. First we'll examine the stock market technique, then we'll look at the lottery.
The stock market investment strategy is called the Dogs of the Dow. For the past 37 years, since 1961, the stock market has returned approximately 16% each year to anyone who invested their money using a Dogs of the Dow strategy.[3] Some years the return is greater than 16%, some years it is less. But year in and year out for the past 37 years, the average annual increase has been about 16%.
Here is how it works. The Dow Jones 30 (DJ-30) is a group of thirty huge corporations whose names everyone knows.[4] On January 1 each year you take 30 small pieces of paper, write the name of a different DJ-30 company on each piece of paper, and then look up each company in the financial pages of a good newspaper, such as the BALTIMORE SUN. Your goal is to get two pieces of information about each of these 30 companies: the current price of their stock, and their current dividend. It's listed right there in the newspaper, so you just look it up and write it down.
Next, on each piece of paper, you do a simple calculation: you divide the dividend by the price, then multiply the result by 100 and write down the answer. That answer is called the "dividend yield." (Some newspapers do the calculation for you and print it in a column called "Yield %" which saves you from having to do the arithmetic yourself.) Now you sort the 30 pieces of paper into order according to the dividend yield. The higher the dividend yield the better. Then you select the 10 companies with the highest dividend yield and you throw away the other 20 pieces of paper. Now you put your 10 pieces of paper in order according to the price of the stock. The lower the better. The winners are the 5 stocks with the lowest price. (Throw away the remaining 5 pieces of paper.)
Now you are going to invest your money in those 5 stocks -- the 5 lowest-priced among the 10 with the highest dividend yield among the Dow Jones 30. That's all there is to it. Using a computer at the local library, you can open an account with an on-line stock brokerage and you're in business. You divide your available money into 5 equal portions, and with each portion you buy as much of a company's stock as you can afford. Then you wait one year, and you do the same thing again with 30 pieces of paper. Now you sell any stocks you own that aren't on your new list of the top 5; and you use all your available funds to buy stock in the companies that appear in this year's top 5. Then you wait another year and do it again. It takes about 15 minutes each year to invest this way. What you are doing is buying stocks whose price, for whatever reason, is depressed. That is why they are called the "Dogs of the Dow." For the past 37 years, those depressed prices have tended to rise an average of 16% in a year's time. The Dow Jones 30 are huge Blue Chip companies, so the "Dogs of the Dow" technique is a relatively conservative approach to investing.
During the past 37 years, if a young person at age 16 started saving one dollar each day (thus saving $365 each year) and once each year broke open the piggy bank and invested that $365 in 5 stocks selected by the "Dogs of the Dow" technique, by age 57, our dollar-a-day investor would have been worth just over $1 million. By retirement age, 65, our dollar-a-day investor would be worth $3.5 million. (This conclusion ignores taxes that the government would impose, and it ignores modest brokerage fees that would be charged for each purchase or sale of stock.)
For comparison, let's look at the fortunes of the average person who invests one dollar each day in the Maryland State Lottery. The Lottery maintains a web site (https://sailor.lib.md.us/msla/- benefits.html) where we learn that the Lottery gives back in prizes 52.9 cents from each dollar it takes in Therefore, the law of averages says that anyone who invests one dollar in the lottery will win back an average of 52.9 cents. The longer you play the lottery, the more likely it becomes that you will win back 52.9 cents on each dollar you invest. Therefore, the average person investing a dollar each day ($365 per year) will win back 365 x 0.529 = $193.08 each year. The Lottery keeps the difference, which is $171.92, each year. Thus we can see that the Lottery pays its investors at a negative annual interest rate of 0.529-1 = -47 percent.
If a young person starting at age 16 invests one dollar each day in the Maryland state lottery, at age 65 that person's 50-year investment will have grown to a grand total of $401.60.
Invested in the stock market using a simple technique, one dollar a day turns into $1 million in 42 years and $3.5 million in 50 years. The same one-dollar-a-day invested in the Maryland State Lottery for 50 years turns into $400.
What has this got to do with environmental health? In the U.S., the two biggest causes of public health problems are intertwined: poverty and the racism that often gives rise to poverty. Poor people have much more illness and early death, compared to people with a decent job and income. (See REHW #584.) Members of minority groups have less access to health care than most people, and when they seek treatment the medical establishment gives them less aggressive, less successful care than it gives to whites.
State governments work hard to make people think that gambling a dollar a day has no effect on their future -- except of course the long-shot possibility of a huge win. Our schools don't teach children about probabilities, so they have no idea how vanishingly small is the likelihood of "winning the lottery." Most of our schools also don't teach kids about the power of compound growth rates (for good and for ill). As a result, the poor are investing in state lotteries and are subsidizing the rich to the tune of $11 or $12 billion each year. For their parts, the rich are avoiding the lottery like a venereal disease and are investing their money in the big Blue Chip polluters using simple, well-established techniques that have historically yielded a substantial financial gain.
Frankly, the lottery can only survive so long as people remain ignorant of math. State governments create that ignorance in the schools, then exploit it via the lottery to reduce taxes on the wealthy. If a state government is dependent upon the lottery for meeting its budget, it will invest huge sums -- tens of millions of dollars, or more -- to bamboozle people into laying down their dollars week after week. Indeed, state governments in 1995 spent $382 million on lottery advertising, promotional expenditures and other flim-flam.[5]
People concerned about environmental health, and about community economic development, should consider the lottery like a poisoned well. People go there seeking hope, seeking huge benefits; instead they get ripped off, impoverished by the state government that was elected to protect them. The average person who consistently invests in the lottery will remain poor forever.
I am certainly not advocating that people start investing their savings in the Dow Jones 30, or even in the stock market. I am merely drawing a comparison between wealthy investors who are "in the know" and investors who are "in the dark." Those "in the know" never invest in the lottery because they understand that it is designed to ensnare losers. For the health of individuals and communities, the lottery should be considered in the same category as arsenic, cyanide and dioxin: a potent poison.
--Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO)
EXCREMENT HAPPENS -- PART 2
Continuing from last week, we are retelling the history of the management of human excrement as originally narrated by Abby A. Rockefeller.[1] Where we have added new facts to Ms. Rockefeller's original history, they appear inside square brackets.
To recap where we are: Cities began to provide running water into homes in the early 19th century. Water piped into homes had to be piped out again, often into open sewer ditches running in the streets. Outbreaks of cholera followed. A debate ensued: should sewage be transported back to farms, where the nutrients had originated, or should it be disposed of by dumping it into bodies of water? Although many cities for a time transported sewage to farms, by 1920 most sewage was being piped directly into bodies of water. This was a crucial choice.
Once the network of sewer pipes began to grow, industry saw these public pipes as a cheap place to dump industrial wastes. As a result, corporations began to dump all manner of toxicants into the nutrient-rich sewage stream. This was another crucial choice. Once they were mixed together, nutrients and industrial poisons could not be separated at any reasonable price. Therefore the whole mess became a toxic waste disposal problem and excrement lost its value as a fertilizer. Dumping it into water bodies accelerated.
By the 1950s, most of the nation's waterways were badly contaminated with a combination of nutrients and toxicants. This gave rise to a demand for treatment of waste prior to disposal. Pipes that used to carry toxic sewage into streams and oceans now began to carry it into centralized "wastewater treatment plants" or "publicly owned treatment works" (POTWs).
Wastewater treatment plants remove the solids and some of the chemicals, creating a black, mud-like "sludge" in the process. It's a trade-off: improved wastewater treatment means cleaner discharge water but it also means more sludge and worse sludge (more toxic). Now a new, and truly intractable, problem appears: what to do with mountains of toxic sludge?
Communities with access to the ocean began dumping sludge there. New York dumped its sewage sludge 12 miles offshore; when that place developed obvious contamination problems, the dumping was moved to a spot 106 miles offshore, where, to no one's surprise, contamination soon developed.
The use of water to carry sewage, and the use of centralized wastewater treatment plants, had great political appeal for several reasons. Most political authorities tend to favor centralized solutions because they basically don't trust people to handle their own problems. Secondly, as we have noted, industry needed a cheap place to dispose of its wastes. [In 1997, according to the Congressional Research Service, industry "dumped 240 million pounds of wastes with hazardous components" into municipal sewers.[2]] Third, and perhaps most important, laying sewer pipes and building centralized sewage treatment plants is extremely costly and engineering firms receive 20% of the initial cost. [Between 1970 and 1993, the federal government appropriated $69.5 billion for sewage construction projects. The Congressional Research Service recently estimated that between now and the year 2016 (17 years), the federal government will spend another $126 billion on sewage projects.[2] These are serious amounts of money.] Only the Federal Highway Administration [and the military] spend more public money on construction. [If even a small fraction of this sewer money is kicked back at election time by consultants, lawyers, investment bankers and engineering firms, it can go a long way toward keeping the present crop of politicians in office.]
In the 1970s, many environmentalists and public health officials favored centralized sewage treatment because it seemed to offer an improvement over dumping raw wastes into waterways. The Clean Water Act of 1977 was essentially a sewering act. Everyone was then locked into centralized wastewater treatment systems.
In 1988, Congress discovered that sludge dumping in the oceans was harming marine life, and the practice was banned as of 1992. This created a massive problem for American cities: [11.6 billion pounds of sludge (that's the dry weight, not counting the water it contains[3]) has to go somewhere, year after year.]
At that moment, EPA decided that the U.S. now needs to mimic 100 generations of successful farmers in Asia, returning human excrement to farmland.
However, EPA has overlooked two important differences between modern sewage sludge and traditional "night soil" (unadulterated human waste):
1) Most of the nitrogen in human waste is in the urine and is water-soluble, so it is not captured in the sludge. Therefore, if sludge is going to substitute for commercial fertilizer, you have to use a lot of it to get enough nitrogen. And (2) when you add a lot of sludge to soil, you are also adding a lot of toxic metals and a rich (though very poorly understood) mixture of organic chemicals and, very likely, radioactive wastes as well.
EPA has addressed the toxic metals by telling farmers to add lime to their soil along with the sewage sludge, to prevent the soil from becoming acidic. If soil turns acidic, then toxic metals begin to move around, either leaching down into groundwater or moving upward into the crops (which, by definition, are part of some food chain). If soils are alkaline (the opposite of acidic), the metals move more slowly.
[What EPA has overlooked is the fact that ordinary rain is slightly acidic, not counting the excess acidity provided by "acid rain." Normal rain drops falling through the atmosphere dissolve small amount of carbon dioxide, forming carbonic acid. Normal rain has a pH of 5.6 whereas 7 is neutral. Therefore, if soils are not kept alkaline by the regular addition of lime, sooner or later normal rain will begin to leach excess metals out of many soils. The only way to prevent this is to keep the excess metals out of soils in the first place.]
In sum, plowing sewage sludge into soils is essentially guaranteed to harm many of those soils as time passes. [See REHW #561.] [As we know from the ancients who poisoned their soils with irrigation salts, a nation that poisons its farmland is a nation that doesn't have a long-term future.]
A series of bad decisions made during this century has brought us to an impasse: sewage sludge is unmanageable because you can't know from day to day what is going to be in it, and so you cannot monitor its contents.[4] (Even if you could manage the scientific problems inherent in monitoring an unknown mixture of unknown substances, as a practical matter there isn't any government agency with enough staff to monitor the nation's sludge.)
Therefore -- as heroic a task as this may seem -- it is time to re-think centralized water-carriage sewage treatment systems. The present systems were not designed to produce useable products and therefore the DESIGN of present systems is the root of the problem.
Three policy goals are needed: (1) Sewer avoidance (stay off or get off water-carriage, centralized sewer systems). (2) Promote low-cost, on-site resource recycling technologies, such as composting toilets, that avoid polluting water and preclude wasting resources. (3) Price water right so that the market works to keep it clean, not contaminate it with excreta.[4]
[For individual households, real solutions are already available: zero discharge household waste systems. An excellent new book by David del Porto and Carol Steinfeld, THE COMPOSTING TOILET SYSTEM, will dispel any fears you may have that composting toilets are a step backward.[5] With microflush toilets and vacuum-flush toilets now readily available, you can have the bathroom of your dreams, yet compost your household wastes into an odor-free product that is entirely satisfactory as agricultural fertilizer. These days, there are companies that will manage the system for you, including removing the compost. Your household waste system can be installed, maintained, and managed by professionals, just like your electrical and heating systems.
But what about apartment buildings and office buildings in cities? Although we know of no one who has applied it, the technology certainly exists for manufacturing building-scale waste systems based on anaerobic digesters, which would produce methane gas and fertilizer. As Abby A. Rockefeller said recently in an interview, "Surely, human ingenuity can do this." Such systems would be cheaper than current sewage systems because they wouldn't require miles of underground pipes to connect to a centralized sewage treatment plant, and they would conserve hundreds of billions of gallons of water each year.
[Every time we flush the toilet, 3.3 gallons of drinking water are degraded. At 5.2 flushes per day (average), each of us presently degrades 6260 gallons of drinking water each year to flush away our 1300 pounds of excrement -- 1.6 trillion gallons of water per year in the U.S.]
Naturally, we would need to keep toxicants out of these composting systems, but that has always been true (even though we have ignored this fact) and we might as well face up to it now. Toxic household products will have to be phased out as part of any plan for sustainable living.
Toxic industrial wastes should be managed by the industries that make them, not dumped into the environment that sustains all life. Unusable wastes are a sure sign of inefficiency.
Lastly, what to do with today's mountains of toxic sludge? Obviously they must be handled as hazardous wastes because that's what they are. [Probably above-ground storage in concrete buildings is the only satisfactory solution at the present time.
[You say we can't do any of this because we've been doing it another way for 100 years? Ask yourself, what kind of people would dump their excreta into their drinking water in the first place? And what kind of people, faced with workable, cheaper, more environmentally sound alternatives would continue to insist that dumping their excreta into their drinking water is the only way to live?]
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