Getting OTB on the Right Track

To the editor:
Daniel Seligman’s fine exploration of New York City’s Off-Track Betting ("A Horseplayer’s Line on OTB," Spring 1995) had particular resonance for me, a gaming-business professional since 1979. I founded the principal industry trade publication back then and produced several investigative pieces that, alas, came to the same conclusion: OTB is a travesty, and its only salvation is privatization.

OTB’s philosophy, so assiduously nursed by Howard "the Horse" Samuels, imparted an odor of sanctity to what was widely conceived as a randy kind of business populated by Runyonesque characters. What OTB failed to recognize, however, and what it still fails to recognize, is that gambling is a business of marketing. The product, from its inception, was wrong.

Bookies extended credit; OTB did not, until many years later. Bookies lent the personal touch, serving their clients anytime they felt the urge to get a few bucks down on a horse. Worse yet, bookies took action on sports?then and now illegal in New York.

Add to this OTB’s ever-slovenly premises, incompetent employees, and totally inefficient systems in processing $1 billion worth of wagers a year, and you have a built-in formula for marketing failure: a predictable result every time government selects a business into which it will enter.

The politicization of situating OTB offices was not only a function of patronage jobs among Democratic district leaders but, more blatantly, a real estate leasing boondoggle. Take a map of OTB offices through the years and trace their locations. Many are in buildings owned by party hacks, contributors, and who-knows-what front companies that conceivably were directly tied to politicians. An OTB lease was solid gold, or at least perceived as such because nobody had ever heard of a bookmaker going out of business voluntarily.

Moving on to spend the past 12 years as a senior executive in several Atlantic City casinos, I came to know a lot about New York gamblers and have long counseled the boards of companies I worked for to look at OTB. There is no reason why?if it were freed of the labor and realty problems and the debilitating political atmosphere?OTB could not be a tax-contributing entity if it were in private hands.

A successful privatization plan for OTB must be based on two fundamental principles.

First, it has to be a no-strings-attached auction sale to a bidder. There are no core goodwill assets?only bad-will liabilities. A buyer should pay for only what’s usable in equipment. All other buyout hits should be absorbed by the city and the total returned to it over time, in an allocated, mandated portion of a presumed gaming tax to amortize it over a period of years.

Second, the city should have no residual interest in locations, labor, configuration, or work rules. A private operator may well elect to build three or four mega-OTB casino-type establishments among the boroughs linked to a few strategically placed satellite offices. This is the kind of decision a buyer needs to be able to make if he so chooses. The city’s only interest should be in collecting the gaming tax.

Operating from these principles, the city could approach any number of excellent gaming companies with long records of integrity and simply say: "Make me an offer."

Howard J. Klein
Margate, N.J.

How We Lost Love

To the editor:
Kay Hymowitz’s fine "The ?L’ Word: Love as Taboo" (Spring 1995) stops short of fingering the ultimate cause of our predicament. The withering of love in modern America is a symptom and consequence of secularization.

The loss of awareness of and belief in the transcendent, the rise of philosophical materialism, and the displacement of religion by science, with its stress on quantification and "objectivity," have demystified life and shorn it of wonder. In a culture which holds that there is no God and no soul, only matter, the demystification of women, the disprizing of beauty, the death of love, and the "robotization of sex" were inevitable.

Modern secular America conspicuously lacks a sense of the sacred, and of reverence. If there is no God, only matter, nothing is sacred or worthy of reverence?including oneself and one’s "partner."

And without a benevolent personal God, the universe is inexplicable, meaningless, and alien?hence frightening. The prevailing American emotion today is fear. From politicians who flinch from a true battle of the budget to parents who don’t enforce discipline because they fear their children’s disapproval to the young lovers who flee from deep emotion and "commitment," Americans are running scared as never before. Reaching out to another in love is a brave act. People who are terrified of life can’t afford to run such risks.

Moreover, loss of belief in the loving God of Judaism and Christianity undermines love between people. The emotions of a religious outlook are those required for successful romantic love and marriage: faith, trust, devotion, self-transcendence, reverence for the other. It is no accident that idealistic romantic love arose in deeply Catholic feudal Europe. A deeply religious person is naturally oriented toward love and devotion in a way that unbelievers or nihilists simply aren’t.

The "obsession with personal autonomy" that Ms. Hymowitz rightly deplores is, in fact, the amoral radical egoism propounded in the Marquis de Sade’s novels. Sade, incidentally, was a precursor of modernity’s "era of liberation" from constraints, especially religious and moral ones. In a godless world of mere matter, nothing outside yourself has meaning; others have no claim on you.

Sade’s "free, self-contained individual" adopts the maxim: "Enjoy myself, no matter at whose expense." Hence modern man treats woman, as Sade’s character Durand said, as an "object I use for the simple and unique purpose of consumption, and with which I enter into no other relationship." Sound familiar?

Today’s fascination with sadomasochism is the logical culmination of a Sadean worldview denying God and human dignity, devoid of love and tenderness, deeming people as mere objects, putting a premium on degradation, and sanctioning any means to obtain a thrill.

There is a spiritual reality; we are metaphysical amphibians living in both the spiritual and material realms; and beliefs have consequences. Godless, pragmatist modernity is a radical treason to human nature, a murderer of our souls, a denial of our highest possibilities. How could love flourish in such a climate? Surely the Hound of Heaven spoke truly in Francis Thompson’s poem: "Thou dravest love from thee, who dravest Me."

John Attarian
Ann Arbor, Mich.

Empowerment for Whom?

To the editor:
Mitchell Moss’s "Where’s the Power in the Empowerment Zone?" (Spring 1995) misrepresents New York’s Empowerment Zone proposal and shows the author’s faulty understanding of inner-city economic development.

Professor Moss argues that for the Empowerment Zone to succeed it must "focus on encouraging private-sector job creation." "Instead," he continues, "current plans for the zone look like an enormous safety net for social services." Professor Moss’s statement makes it appear that New York’s Empowerment Zone application was not concerned with creating private-sector jobs but rather was designed to pump money into failed public-sector and not-for-profit social welfare programs.

In truth, New York’s application took into account the substantial public investment already planned in Harlem and the South Bronx?billions of dollars over the next ten years in capital construction alone, with similar levels of investment in health care and social services. What makes these investments look as if they create "dependency" or "safety nets" is that relatively few Empowerment Zone residents or businesses work on these building projects or have jobs delivering these services.

The centerpiece of the city’s application, which Professor Moss’s article completely ignores, is a "first-source" strategy designed to increase the participation of local businesses and residents in work the government already pays for in areas such as construction, toxic removal, health care, day care, and home services. This is an inside-out development strategy, not an outside-in rescue effort.

In addition, private investments in the zone, contrary to Professor Moss’s characterization, are leveraged primarily against public investments in housing, not a Third World Trade Center. Moreover, the application has numerous proposals for creating private-sector job and investment opportunities in the 125th Street business corridor, tourism industry proposals, small business incubators, health industry proposals, and a One-Stop Capital Shop.

Professor Moss seems unaware of the studies that show businesses are generally much more concerned about neighborhood quality of life (especially crime) and the quality of the local workforce than they are about tax incentives. This partly explains why enterprise zones, in their earlier incarnations, have been mostly unsuccessful in reducing inner-city poverty. New York’s Empowerment Zone application takes into account these experiences and tries to harness the resources of the community?yes, even the public-sector resources?to work for community residents and businesses.

Furthermore, it did not ignore the true concerns of the business community. The strategic goals of the New York Empowerment Zone explicitly focus on expanding the range of economic opportunities in the community through increasing access to capital, investment in education and job creation, and links to the city and regional economy, as well as first-source procurement and hiring policies.

It is only a small group of Republicans in Washington, and apparently Professor Moss, who believe that it is possible to move the city’s most impoverished population to jobs without extensive and effective outreach efforts, day care, and regular access to medical care.

There is no question that any public policy focused on reducing inner-city poverty will have great difficulty achieving its goal. Yet we believe that there is a need for anti-poverty policies and that the Empowerment Zone approach has a real chance of succeeding. Further, Harlem and the South Bronx are open to any constructive proposals Professor Moss or anyone else might offer for improving their Empowerment Zone plan.

Ester R. Fuchs
Director Barnard-Columbia Center for Urban Policy New York, N.Y.

Lionel C. McIntyre
Director School of Urban Planning Columbia University New York, N.Y.

J. Phillip Thompson
Assistant Professor of Political Science Columbia University New York, N.Y.

Walter Stafford
Associate Professor of Urban Planning New York University New York, N.Y.

Mitchell Moss responds:
It’s unquestionably true that "any public policy focused on reducing inner-city poverty will have great difficulty achieving its goal." But no combination of federal money, community support, and political clout is sufficient to generate jobs unless it’s based on a clear economic rationale that builds on market forces, community assets, and technological trends.

Professors Fuchs, McIntyre, Thompson, and Stafford seem to believe that economic development consists of substantial public investment to create jobs in social services, and that those services will eventually render the community appealing to private investors. On the contrary, the experience of the past 30 years has overwhelmingly demonstrated that such a strategy is guaranteed to make the community even more dependent on the public sector while diverting energy and resources away from business creation and entrepreneurship.

An economy based on publicly subsidized social services creates no real wealth and is, ultimately, unsustainable. Once the federal Empowerment Zone money is spent, Harlem will be no better off economically than it is today.

Public investment in the zone should be designed to create the conditions that will attract private investment, as it is in the Bronx portion of the plan. That means encouraging small business, retail activity, and wealth-creating activity like the private development of vacant land. A healthy private economy is the best social program: a real job goes further than any government program to strengthen an individual’s capacity to cope with life’s challenges.

The authors propose to reinforce, rather than reduce, the area’s reliance on public programs?at the very time when those programs are being cut back nationwide. No one should be surprised when this approach fails.

More Lessons from Boston

To the editor:
Sol Stern ("Let’s Seize This Chance for School Reform," Spring 1995) rightly points out Boston’s successes in reestablishing the rule of common sense rather than teachers’ union hegemony. Boston enjoys a certain synergy between business, government, and academia that allows it to provide more "bang for the buck" to taxpayers. Boston also has one of the few large municipal governments that are open to anyone with a personal computer and modem. New York City would do well to copy Boston’s model in education as well as in many other areas.

Marcia H. Lemmon
New York, N.Y.


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