S*#!-hole country

August 7, 2019

I recently returned from a trip that took me by air to three Latin American countries – Panama, Argentina and Costa Rica (I also visited Uruguay, but by boat). At one airport on my trip, after 12 wearying hours of traveling, including seven straight hours in a coach seat, I was directed to a huge, dingy arrivals hall without air conditioning (and it was hot), where I waited over 40 minutes with hundreds of other tired, hot travelers to have a disinterested bureaucrat stamp my passport without asking me a single question. After another wait of 40 minutes (in a room also without air conditioning) for my luggage, I finally was able to go outside to look for a cab. One nowhere near the front of a long line of licensed cabs called out to me, so I got in. When I told him where I was going (a hotel near the airport, not the urban center) he cursed me and tried to hold me up for an exorbitant fixed fare, though local law requires cabs to use meters. When I threatened to report him if he didn’t turn on the meter, he acquiesced, muttering “it’ll be the same.” Of course, it wasn’t – it was just over half what he initially had asked for.

Can you guess the airport at which this scene took place?  If you guessed JFK in New York upon my return, you’d be right.  The three international airports in Latin America that I experienced were all modern, air conditioned, and the entry procedures were efficient and quick.

Smart governments know that good airports are huge economic drivers, and can shape visitors’ attitudes toward a place by the initial impressions they instill.  The local leaders who pushed through the renovation of the Albany International Airport a few decades ago knew this, and I believe their good work has paid off.  The Port Authority of NY and NJ, which runs the JFK airport, has promised a new JFK.  It can’t come soon enough.

 

 

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Another Long Island Railroad scandal

July 10, 2019

I was shocked when the New York Times exposed the abuses by Long Island Railroad employees of their disability benefits, as well as provisions of its labor contracts that no sane company would accept .  Now, perhaps less surprisingly, the New York Post reveals egregious time and leave abuse, allowing some individual employees to rack up hundreds of thousands of dollars in overtime for hours they didn’t work.  While some of the workers were able to retire before facing disciplinary action and recoupment of the stolen funds, the taxpayers who subsidize the railroad — already victimized by the railroad’s paying the crooked employees for hours not worked — will continue to pay their crookedly inflated pensions.  If the abuse can’t be stopped (I give Governor Cuomo credit for trying to stop it, albeit belatedly), a big step toward curbing it would be to disallow overtime hours to be part of pension calculations.


O, Canada

June 5, 2019

I just returned from a visit to Vancouver, BC, in the beautiful Pacific Northwest, one of my favorite parts of the world.  The city, which is known for its great Asian food, its waterfront and the beauty of its surroundings, among many other things, did not disappoint.

But I want to talk about two very little things I was reminded of that are done in Canada, but not in the US, that make life there easier for everyone, and in particular for gamblers.

The first is that pennies no longer are used.  All cash sales are rounded to the nearest nickel, which is the smallest unit of currency generally in circulation.  Given that the penny costs more to produce than it is worth, and that storing and accounting for pennies also is costly, this common-sense approach, with roundings up and roundings down canceling each other out, makes a lot of cents (sorry, I couldn’t resist).

I was reminded of the second when, in the local casino, I hit a jackpot that required a hand pay.  In the States, along with the hand pay would come a W-2G form reporting the gross proceeds of the jackpot to the IRS.  To avoid liability for the tax, it would be up to the player to record his or her offsetting losses, which almost always exist.  In Canada, they realize that fact, and even apply it to lottery winnings, whose large jackpots are the exceptions, presumably treating lottery losses and wins by the aggregate of all players as a wash or a net loss.  After I signed a form for the casino, I was paid in cash and not given any other paper work (US citizens should be aware that, as in the US, net gambling wins, like any income earned anywhere, even if not accompanied by a reporting form, are taxable income, no matter where in the world they are won).

 


The cost of playing “short pay” video poker

April 8, 2019

Traditional “full pay”  or “9/6” (based on their payouts for the full house and flush on a single-coin bet) video poker pays back 45 coins for a full house and 30 coins for a flush  including the return of an original five-coin wager (as explained in earlier posts, a wager of five coins is necessary to be eligible for the enhanced royal flush payout).  Combined with the returns for other winning combinations (which usually but not always remain the same on all machines), the overall average return for full pay jacks or better is 99.5% of all moneys wagered when played using optimum strategy at full coin.  This overall return takes a long time to achieve, since part of it is based on hitting a royal flush, which on average occurs only once in some 40,000 hands, but it’s a useful measure nonetheless.

While full pay jacks or better machines do still exist, they are becoming rare, especially outside competitive gaming markets such as Las Vegas.  Particularly at lower denominations, most jacks or better machines in our area pay 8 coins for a full house and 5 for a flush.  The overall return (again, based on optimum play at full coin, over a long period of time) is 97.3%, or some 2.2% less than full pay.

While 2.2% doesn’t sound like much, it can add up fast.  Let’s assume play on a dollar machine (a level at which full pay machines are available at Mohegan Sun and Foxwoods; the best dollar machines at Turning Stone are somewhere in the middle, some returning 9 for a full house and 5 for a flush and others 8 for a full house and 6 for a flush).  At max coin, that’s $5.00 a spin.  While experienced video poker players can achieve speeds of up to 1,000 hands per hour, and average 600-800 hands per hour, let’s assume a leisurely pace (which I recommend) of 400 hands per hour. That means the player is pushing $2,000 an hour through the machine, which amount is exposed to a house edge of 2.7%.  On average, the house therefore will retain $44 of that amount.  On a full pay machine, with a 0.5% house edge, the house will retain, on average only $10 — more than four times less.  The average hourly cost of playing a $1.00 short pay jacks or better video poker machine is $44 more than a full pay machine.  As we used to say in Brooklyn, “that ain’t nuttin'”.  And if you’re playing a $5.00 machine ($25.00 per spin), the extra cost per hour is quintupled, to $240 per hour.

Whether to accept the extra cost is, of course, up to you.  If you have a very limited budget, and must play at the $.25 level, you really have no choice —  8/5 machines likely are the best available to you in the northeast (and beware of those paying even less).  At the dollar level, if you live in Albany, the nearest full pay machines are two hours farther away than the nearest 8/5 machines.  At the $5.00 level and above, Turning Stone offers full pay jacks or better, as do the casinos in Connecticut.  Be aware that, regardless of short term results, the more you play, the more your results will skew toward the average return.

Ironically, one of the major responses of the gaming industry to increased competition has been to lower the return to players on its games.  The reasons for this are many, including increased taxation and other items of overhead (New York’s taxes on its non-native American casinos is, not surprisingly, among the nation’s highest, and that money has to come from somewhere).  However, a major reason for for the payout reduction is that it works.  Consumers who normally would boycott a store charging four times more than its competition for a given item accept the gouging, usually out of ignorance.  If you know the cost, you — and only you — can decide whether the convenience, amenities and other factors justify playing the short pay machine.

 

 


Repeal and replace

March 13, 2018

No, not Obamacare.  With all the focus on gun laws after the latest school massacre, it occurred to me that the problem could largely be solved if the Second Amendment were repealed, and that the chances of that happening — despite the fact that I’ve not heard it mentioned anywhere — have never been better.  The national sentiment appears to have shifted away from “protection” of unlimited rights to buy and own any type of gun toward support for sensible regulation.  A repeal of the Second Amendment would make that possible and undercut a lot of the NRA’s “moral” authority.

Of course, any move to repeal the Second Amendment could backfire.  I know many “gun nuts” who would fight it to the last.  But I don’t think the times have ever been more favorable to the success of such a move.

Whether a “replacement” to secure some gun rights would be necessary is hard to say.  The absence of any constitutional support for gun ownership would be new to this country, and many of those on the fence about repeal might insist on a replacement.  But any constitutional protection for gun ownership could hinder sensible regulation.

I say let’s run the idea up the flagpole and see if anyone salutes it.


Health insurance for some

March 13, 2017

This Times Union story is disheartening, but not surprising.  It’s about legislators hiring rich cronies for part time jobs that pay little but provide State-subsidized health insurance, which is top-of-the-line and costs the employee very little (full disclosure — as a full-time, non-political State employee, and now as a State retiree, I too enjoy this benefit).

What the story doesn’t address, and what should be of broader concern, is the pricing policy for employees and retirees, who are required to pay a share of the cost of their policies.  There are two prices — for individuals with no dependents, and a higher family price for those with any number of qualified dependents.  Thus, the employee with a spouse and no children pays the same premium as the employee with a spouse and 15 children.  I do not know whether the cost to the State is the same regardless of the number of the employees’ dependents, but I do know that State employees with small families are paying a lot more per person for their health insurance than State employees with large families.  While this policy is great for State employees who have large families, it’s not so good for those making up the difference.  Even worse, it’s not a transparent policy — those who are making up the difference are not aware of who they are or how much they are paying.

I’m not saying the policy is indefensible; for example, where government jobs sometimes pay less than the private sector, the family insurance plan may make it practicable for someone with a large family who is an attractive candidate to take a lower-paying State job, which could benefit the public. And it is a way to make health care more affordable to those with larger families and, presumably, less disposable income (though that may not be the case of the part timers in the TU story, one of whom claimed a net worth of over $8 million). What I am saying is that it also presents apparent fairness issues and, as the TU story indicates, an incentive for abuse.  Open discussion of the issue — one that most taxpayers probably are not aware of — might benefit everyone.

 

 


Health care conundrums

February 17, 2017

As I advance in age, I am exposed more and more to the health care industry, despite having enjoyed relatively good health until recently.  As a retired New York State employee, I am blessed with excellent health insurance that covers most doctor visits, medical tests and procedures, as well as prescription drugs, with only a relatively modest co-pay. Here are a few observations:

First, it appears that many of our health problems are what a friend of mine calls “diseases of affluence.”  More appropriately, they should be called “diseases of lifestyle,” since they affect people of all socioeconomic strata.  A lot of these are directly influenced by government policies.  For instance, our auto-centric physical infrastructure minimizes the opportunities for and pleasures of walking and cycling, and cannot help but contribute to obesity and other problems based on lack of physical activity.  Our government subsidies to cane sugar and corn (the main ingredient of high fructose corn syrup) help make junk food and sugared soft drinks attractively priced.  This is especially so for the poor, since the SNAP program (formerly known as Food Stamps) allows their purchase with SNAP benefits.  If we collectively spent more on complete streets that were friendly to pedestrians and cyclists, as well as cars, how much could we save on health care (not to mention on school transportation)?  How about if we stopped subsidizing sugar?  I think it would be worth a try.

For all the criticism leveled against it, the Affordable Care Act (“Obamacare”) has achieved something great — it has shifted the dialog from whether health care insurance should be extended to many of those who don’t have it to how the present system should be replaced or improved.  Neither Trump nor his minions are suggesting that those who obtained health insurance through Obamacare should lose it, meaning that they recognize that there is no going back on government’s commitment to growing numbers of its citizens.  Whether things actually get better or worse remains to be seen, but at least no one is talking a bout a pre-Obamacare “reset.”  To me, that is yuge.