Funny Business with Jane Wells

Boeing Just Can't Win! And Gov. Arnold Wants More Money

Boeing Headquarters

Strike three for Boeing, after losing another huge contract. The deal to provide the Pentagon with up to a dozen next generation satellites—worth $1.4 billion—went to Lockheed Martin.

This after Boeing lost the even bigger Air Force tanker deal to Northrop Grumman  , as well as a billion-dollar-plus contract to provide unmanned aircraft to the Navy. What is going on?

True, it’s usually impossible to beat Lockheed on anything, though Northrop Grumman recently did with the Navy UAVs, and Boeing did it in a big way a few years ago with the P-8 naval patrol aircraft.

Conspiracy theorists believe Boeing is still being punished for the Air Force scandal involving a government official helping the company while secretly trying to get a job there, as well as a scandal involving stolen secrets from Lockheed Martin.

Is this really about payback? Even if all things were equal, which they never are in these bids, it seems like an expensive way to punish a company. Another theory is that the Pentagon is trying to fight off trouble from Sen. John McCain in case he becomes president. Sen. McCain was especially critical of Boeing during the scandals.

The Golden State remains famously un-golden when it comes to its finances. Now the Governor is hoping to help close the $15 billion budget shortfall by modernizing the state’s lottery. In a memo he explains why new technology—and more games—are needed:

“Currently, California’s Lottery performance ranks 28th in the nation among 42 states with lotteries – and it’s the absolute worst among the 10 largest states in terms of per capita sales and a number of other measures.”

But here’s what I found especially interesting. Gov. Schwarzenegger wants to “securitize” the lottery, by letting investors pay the state money up front in exchange for part of the lottery’s revenue stream over the long haul.

Sounds like a lotto bonds to me. His office says Florida, Oregon and West Virginia already do this. With new equipment, more games, and by selling bonds, the Governor believes the lottery can triple its annual revenues from $3.3 billion now to $10 billion with in a decade.

Personally, I haven’t played the lottery in years. It’s the gaming version of muzak, boring and forgettable. But if the state tries to make it more interesting, expect heat from its top competitors: gaming on California’s Indian reservations, and the big business interests in nearby Las Vegas.

Anyone want to bet on who will win that battle?

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