life-on-severance-comfort-then-crisis.html: Personal Finance News from Yahoo! Finance: "Although their rent was cheaper, Mr. Hipsher says the family continued to spend like before. They moved with three cars -- two BMWs and a Chevy Silverado. They continued to buy cases of $36-a-bottle wine. They spent $250 a month on a cleaning lady, and Mr. Hipsher dropped $50 a week on flowers for his wife. The couple still dined out regularly."
The article talks about families burning through severance and savings and finding themselves out of cash and still unemployed. Most of the families started out as prodigious spenders and continued to spend lavishly when the $100k+ jobs disappeared; one family had pretty modest tastes (relative to income) and is still worrying.
When the economy started to turn sour, my family put together a budget that we call "survival mode." We already had a budget for buying a house, which we converted into a budget/spending plan for our day-to-day spending before buying a house. Survival mode took a while to put together - we took our existing budget and slashed, slashed, slashed. We didn't slash to the bone. We kept Internet access - although we downgraded to dial-up. We kept in mind that unemployment and severance incomes are taxable, and we budgeted for taxes. We tried to be realistic about what expenditures brought a lot of happiness, a sense of normalcy, or were very important (health insurance, for example). Still, it took a lot of soul-searching to decide which spending categories really matter and which are luxuries that we can live without.
Two things happened. One, we converted the vague anxiety about possible loss of income into the security of having a plan to survive. This is important - having a plan already in place means that we can activate plan B if we lose our income - rather than absorbing the loss of income while also frantically cutting expenses, or, as the people in the article did, continuing to spend until the money runs out. Two, we had some really good conversations about what is important. We made some of the "survival mode" cuts right away. Cable TV, for example, didn't rank high on our priorities. It was nice-to-have, but then the cable company raised rates and we realized that we just didn't get that much enjoyment out of it. So we cut cable. That freed up money for increasing savings. We also realized that the $60,000 severance that the couple in the article received, doesn't go very far when housing costs $24,000 a year (and taxes eat up a big chunk of severance money, too).
When lay-offs got too close to home, we reminded each other "it wouldn't be the end of the world. It would suck, but we would survive." We would trot out the survival-mode budget and say "look, we'd still have money for networking lunches and a nice dinner in." When stress ran high, we would remind each other than we can make it. So instead of wasting energy on worry, we could focus on moving forward. We can be strategic. We can still contemplate buying a house (although we are being cautious and we would not consider spending 40% of income on a house right now. I think that a house with room for a garden and zoning that allows chickens or sheep, would actually be a benefit if times got tough - although having a renter's freedom to move on a moment's notice has its benefits, too).
We tried to be realistic - we didn't say that we will live on library books and rice and beans, we left some money in the budget for sanity and a sense of still having choices. We kept the "lunches at work" category for networking lunches; we kept (downsized) charitable contributions and gifts. We kept health insurance, life insurance, car insurance and homeowners' insurance. We kept the budget category for healthcare co-pays. We cut groceries a bit. If things went really badly, there is more room to cut back.
Having a plan is an optimistic choice. We know we can survive on less than we earn (though, naturally, we'd prefer to increase our income). We don't have to stick our heads in the sand and say "it's too horrible to contemplate!" And we know that we need to beef up our savings if we want to have the security to stay reasonably comfortable in a financial crisis that can leave well-qualified workers out of work for over year. It is far better to realize that while money is still coming in, than to realize it after the money has run out, as so many of the people in the article did.
Families can pull together and get through anything. It's a family effort, and it helps to remind the family about the benefits of cutting back to save more, or cutting back to outlast a crisis. The fellow in the article spending $250/month on a cleaning lady ($3,000 a year) after losing his job - I bet his wife would rather have $3,000 in the bank now. It is definitely hard to adapt to a major reduction in income, but writing a what-if budget helps you prepare mentally, and if things go awfully wrong, it lets you put the austerity budget on auto-pilot while you grieve for the job, security, and lifestyle lost and get to work moving on. Give your family the gift of peace of mind. Work on building a 6-12 month emergency fund. If you need it, you will find that it is worth far more than memories of watching cable TV, eating out every week, or having a professionally cleaned home.
Friday, November 13, 2009
Tuesday, November 10, 2009
Universal healthcare: the Rationing myth
Socialized medicine was rolled out in countries that had not developed the entrenched commercial medical system America has. "Free" health insurance in socialist countries was better than being uninsured, and few people had been privately insured long enough to develop entrenched expectations.
America is different. We all have government health insurance - emergency room care might ruin your credit, but you can use it if you have to. Medicaid (for the poor) helps the very poor - and if someone gets very, very sick, they become poor enough to qualify as soon as they're too disabled to work. Medicare (for the elderly) covers everybody during those critically expensive senior years. Most of us have private health insurance, where we receive emergency care, serious illness care, and preventive care and we only pay a relatively low deductible and relatively low cost-share/copay expenses.
We expect a high level of care. If Grandma gets sick, we expect doctors to pull out all the stops - even if it only adds six months to her lifespan. If little Timmy does something stupid and hurts himself, we expect him to be treated despite his stupidity. If little Sally develops a congenital disease, we expect doctors to provide - and insurers to pay for - all the treatment necessary to give her as close to a normal life as she can have with her condition.
Here are some interesting items that shed a tiny little bit of light on the different healthcare expectations in the U.S. versus the U.K.:
America: Health Insurer to Be Charged With Teen's Murder - ABC News: "The family of a California teenager who died awaiting a liver transplant said they would sue the insurer whom they blame for their daughter's death."
United Kingdom: Treatment for teenager denied liver transplant - Health News, Health & Families - The Independent: "A critically ill teenager who was denied a liver transplant because his condition was drink-related is to be flown to a specialist unit for treatment."
United Kingdom: NHS Blog Doctor: "Poor people get worse medical care than rich people. It's a universal truth throughout the world." The blog is an interesting read, and there are aspects of care that seem exceptional by American standards (housecalls) and aspects where the penny pinching would set Americans marching on Congress demanding that the penny-pinching stop NOW.
No rationing + full care = it doesn't add up
A lot of people get very sick right before they die. It might be terminal illness, acute illness that goes really bad really fast (lethal flu), or a serious accident. They're all costly. Cancer treatment can run a quarter million or more. In Sacramento, a college student recently died from a grisly attack by his roommate; his family received the bill for 5 minutes at the hospital, trying to save the boy's life, and the bill was $29,000. It would have been much higher if the boy had survived - days in ICU, months of rehab, multiple surgeries, pain management, possible infection. Dying is expensive (but it beats the alternative) and cheating or postponing death is expensive.
Wikipedia puts median household income in the U.S. at about $50,000. That's for a household; median annual personal income for all adults is $25k. A person earning $25k pays about $5,000 in social security and federal income tax. Assuming 40 years in the workforce, the median American pays about $200,000 in total federal taxes. That money goes to fund social security, medicare, medicaid, the military, all federal agencies, all federal entitlement programs, etc. In actuality, the federal government only collects $3,600 in income tax per citizen; which works out to $144,000 over 40 working/taxpaying years (a lifetime), but we're going to pay for $30, 60, 90, 500 thousand dollar medical expenses - for a single accident or illness - without rationing?
Right now, American medical spending averages over $7,000 per person. (Washington thinks they're going to cover 40 Million uninsured for $2,500 each.)
5% of Medicare beneficiaries cost an average of $63,000 a year, each. Complications from diabetes can add $47,000 (over a lifetime) in costs for a single patient. ~8% of Americans have diabetes. Lifetime costs for treating diabetes (for a woman) run $233,000 per patient - that's just for the diabetes. Or $423,000 for cardiovascular disease. Remember that these patients can still break bones, fall down wells, catch pneumonia, etc. There is a reason that medical insurance plans often have a lifetime limit of $1 Million per patient - because, sometimes, some people cost more than $1 Million in lifetime healthcare expenses.
Put another way:
America is different. We all have government health insurance - emergency room care might ruin your credit, but you can use it if you have to. Medicaid (for the poor) helps the very poor - and if someone gets very, very sick, they become poor enough to qualify as soon as they're too disabled to work. Medicare (for the elderly) covers everybody during those critically expensive senior years. Most of us have private health insurance, where we receive emergency care, serious illness care, and preventive care and we only pay a relatively low deductible and relatively low cost-share/copay expenses.
We expect a high level of care. If Grandma gets sick, we expect doctors to pull out all the stops - even if it only adds six months to her lifespan. If little Timmy does something stupid and hurts himself, we expect him to be treated despite his stupidity. If little Sally develops a congenital disease, we expect doctors to provide - and insurers to pay for - all the treatment necessary to give her as close to a normal life as she can have with her condition.
Here are some interesting items that shed a tiny little bit of light on the different healthcare expectations in the U.S. versus the U.K.:
America: Health Insurer to Be Charged With Teen's Murder - ABC News: "The family of a California teenager who died awaiting a liver transplant said they would sue the insurer whom they blame for their daughter's death."
United Kingdom: Treatment for teenager denied liver transplant - Health News, Health & Families - The Independent: "A critically ill teenager who was denied a liver transplant because his condition was drink-related is to be flown to a specialist unit for treatment."
United Kingdom: NHS Blog Doctor: "Poor people get worse medical care than rich people. It's a universal truth throughout the world." The blog is an interesting read, and there are aspects of care that seem exceptional by American standards (housecalls) and aspects where the penny pinching would set Americans marching on Congress demanding that the penny-pinching stop NOW.
No rationing + full care = it doesn't add up
A lot of people get very sick right before they die. It might be terminal illness, acute illness that goes really bad really fast (lethal flu), or a serious accident. They're all costly. Cancer treatment can run a quarter million or more. In Sacramento, a college student recently died from a grisly attack by his roommate; his family received the bill for 5 minutes at the hospital, trying to save the boy's life, and the bill was $29,000. It would have been much higher if the boy had survived - days in ICU, months of rehab, multiple surgeries, pain management, possible infection. Dying is expensive (but it beats the alternative) and cheating or postponing death is expensive.
Wikipedia puts median household income in the U.S. at about $50,000. That's for a household; median annual personal income for all adults is $25k. A person earning $25k pays about $5,000 in social security and federal income tax. Assuming 40 years in the workforce, the median American pays about $200,000 in total federal taxes. That money goes to fund social security, medicare, medicaid, the military, all federal agencies, all federal entitlement programs, etc. In actuality, the federal government only collects $3,600 in income tax per citizen; which works out to $144,000 over 40 working/taxpaying years (a lifetime), but we're going to pay for $30, 60, 90, 500 thousand dollar medical expenses - for a single accident or illness - without rationing?
Right now, American medical spending averages over $7,000 per person. (Washington thinks they're going to cover 40 Million uninsured for $2,500 each.)
5% of Medicare beneficiaries cost an average of $63,000 a year, each. Complications from diabetes can add $47,000 (over a lifetime) in costs for a single patient. ~8% of Americans have diabetes. Lifetime costs for treating diabetes (for a woman) run $233,000 per patient - that's just for the diabetes. Or $423,000 for cardiovascular disease. Remember that these patients can still break bones, fall down wells, catch pneumonia, etc. There is a reason that medical insurance plans often have a lifetime limit of $1 Million per patient - because, sometimes, some people cost more than $1 Million in lifetime healthcare expenses.
Put another way:
- The entire country spends approx. $2.5 Trillion on health care costs.
- For fiscal year 2008, the federal government spent $2.98 Trillion in "cash" expenditures. (Wikipedia)
- For FY2008, the federal government took in $2.52 Trillion in tax income. (Wikipedia) (Roughly equal to our total healthcare spending.)
- We spent almost half a billion dollars more than we took in - in a household, that's called going eyeball-deep into debt. That half a trillion is 16.666 percent of total income. That's like a family earning $50k running up another $8,333 in credit card debt. On top of our existing debt...
- Federal debt is about $12 Trillion right now. Which is 4.8 times as much as we took in this year. That is like a family that earns $50k/year and owns their house outright, having $240,000 in credit card debt to keep up with the Joneses (except the government is keeping up with the Jones' votes by promising them everything under the sun, even though we can't afford it.) Keep in mind - our median family example is not paying that $240k debt down, they're increasing it about $8k every year.
- Anybody who has ever borrowed money knows that you have to pay it back, plus interest. The interest on that debt is food out of our mouths until we pay it off. The U.S. pays almost $400 Billion per year in interest on the national debt. If they were a median family earning $50,000, that family would be paying $8,000 in interest payments - without reducing the debt one dollar.
- We also have a $59 Trillion "unfunded liability." If the government "borrows" money, it's debt. If they sign contracts or pass laws promising to pay money, it is not debt, it is "unfunded liability." To put this in household terms, the $50k/year family has promised all of their 6 kids that mom and dad will put them through Oxford - without scholarships. How does our $50k family plan to pay for $1.18 Million in college costs? If mom and dad spent every penny of their income on college, it would take 24 years to pay off that college "unfunded liability." But they might want to eat. If Mom and Dad devote 50% of their total income to paying for college, it will take them 48 years to pay it off.
- Some moms and dads completely give up on getting out of debt. So when Johnny asks them to put his health insurance on their credit card, they shrug and hand over the card. If you were mom and dad's friend, knowing they have $240,000 in debt, knowing they've signed a million dollar contract with the university, knowing their debt grows $8,000 a year because they are living way too high on the hog for a family earning $50,000, would you advise your friends to pay Johnny's healthcare? Or would you advise them to break the debt addiction?
- Mom and Dad have only one shot at surviving - they have to increase their income. If mom and dad are the IRS and social security, they can increase their income - by raising taxes. A lot.
Sunday, November 08, 2009
How much will the health bill cost you?
The rich, those nameless, faceless, spoiled saints that love to pay for everything, are going to give the rest of us "free" healthcare. Except we know how tricky the rich are - they pass their higher costs on to the rest of us. They fire their nanny, move to a lower tax state, do their shopping in Europe... and then they shift their investments to Luxembourg, cut a couple of jobs at the plant, or raise their prices. So, when you're sitting down to the annual turkey feast saying a prayer of thanks for those nice riches that pay for everything, try not to think about them passing some of the costs to you. Crying at the dinner table is gauche.
So, what if the rich pass the costs on to the rest of us? Well, if Joe Rockefeller raises his widget price 5%, Joe manufacturer has to raise his doodad price a little more than 5% - to cover the financing cost on widgets, plus, he has to make a fair profit on the money he puts at risk in his company. Then Joe Distributor raises his costs high enough to cover the 6% increase in doodad pricing, and Joe Retailer has to raise his prices enough to cover the 7% increase in doodad wholesale costs.
Maybe the rich will just take the extra taxes out of their personal budget. They'll cut back on cocaine and hookers. Weelll, when the rich go and waste their money, it creates jobs and income for others. The rich invest their money in stocks and bonds, and it provides funds for corporations to build new factories, buy new equipment, or meet payroll. Let's hope they don't cut back there! The rich hire servants who rather enjoy having a job (my grandfather sure did), so let's hope they don't fire the nanny. Maybe the rich can cut back on jet trips. Okay, I'll give you that one - but I hate flying, anyway. Oh, wait - if they don't jet off to New York for tea and shopping, New York teahouses and boutiques will have to cut back. See, rich people may waste their money (most don't waste much - that's how they got rich), but what I call "waste," some folks call "income." The French Laundry restaurant provides good jobs for staff; designer boutiques employ a plethora of rude-but-beautiful waifs, even Tiffany keeps customer service reps, designers, craftsmen, accountants, and marketing professionals off the public dole. A direct tax takes money out of your pocket, but an indirect tax can take your name off the staff directory.
So, if the cost of healthcare gets passed on to your family, how much is your share? Well, there are about 100 million taxpayers in America*. The health bill is projected to cost $1 Trillion over 10 years, or about 100 Trillion per year. Divided by 100 million taxpayers/families, that's $1,000 per year. As inflation raises the cost of healthcare, it will raise the cost of the healthcare tax, too. And healthcare inflation seems likely to continue - the bill is not addressing existing cost inefficiencies in health care. In fact, if cost increases strap American families, they may delay preventive care, which would increase the incidence of serious illness and serious complications from illness, adding further upward pressure on health costs.
* I am dividing the cost across taxpayers - instead of all citizens - because not all citizens will bear the cost increases. Children almost never have income, so they almost never bear any costs, so we can exclude the roughly 40 Million Americans who are under age 18. The poor don't pay taxes (they receive earned income credit and welfare) and they don't buy as much stuff as the rest of us, so they will carry very little of the cost load. Welfare recipients will probably receive increased payments if cost inflation rises, which would shift their individual cost-share to the taxpayers who fund welfare programs. For these reasons, I believe that most of the costs will be shifted to people whose income (and spending capacity) qualifies them to pay taxes.
So, what if the rich pass the costs on to the rest of us? Well, if Joe Rockefeller raises his widget price 5%, Joe manufacturer has to raise his doodad price a little more than 5% - to cover the financing cost on widgets, plus, he has to make a fair profit on the money he puts at risk in his company. Then Joe Distributor raises his costs high enough to cover the 6% increase in doodad pricing, and Joe Retailer has to raise his prices enough to cover the 7% increase in doodad wholesale costs.
Maybe the rich will just take the extra taxes out of their personal budget. They'll cut back on cocaine and hookers. Weelll, when the rich go and waste their money, it creates jobs and income for others. The rich invest their money in stocks and bonds, and it provides funds for corporations to build new factories, buy new equipment, or meet payroll. Let's hope they don't cut back there! The rich hire servants who rather enjoy having a job (my grandfather sure did), so let's hope they don't fire the nanny. Maybe the rich can cut back on jet trips. Okay, I'll give you that one - but I hate flying, anyway. Oh, wait - if they don't jet off to New York for tea and shopping, New York teahouses and boutiques will have to cut back. See, rich people may waste their money (most don't waste much - that's how they got rich), but what I call "waste," some folks call "income." The French Laundry restaurant provides good jobs for staff; designer boutiques employ a plethora of rude-but-beautiful waifs, even Tiffany keeps customer service reps, designers, craftsmen, accountants, and marketing professionals off the public dole. A direct tax takes money out of your pocket, but an indirect tax can take your name off the staff directory.
So, if the cost of healthcare gets passed on to your family, how much is your share? Well, there are about 100 million taxpayers in America*. The health bill is projected to cost $1 Trillion over 10 years, or about 100 Trillion per year. Divided by 100 million taxpayers/families, that's $1,000 per year. As inflation raises the cost of healthcare, it will raise the cost of the healthcare tax, too. And healthcare inflation seems likely to continue - the bill is not addressing existing cost inefficiencies in health care. In fact, if cost increases strap American families, they may delay preventive care, which would increase the incidence of serious illness and serious complications from illness, adding further upward pressure on health costs.
* I am dividing the cost across taxpayers - instead of all citizens - because not all citizens will bear the cost increases. Children almost never have income, so they almost never bear any costs, so we can exclude the roughly 40 Million Americans who are under age 18. The poor don't pay taxes (they receive earned income credit and welfare) and they don't buy as much stuff as the rest of us, so they will carry very little of the cost load. Welfare recipients will probably receive increased payments if cost inflation rises, which would shift their individual cost-share to the taxpayers who fund welfare programs. For these reasons, I believe that most of the costs will be shifted to people whose income (and spending capacity) qualifies them to pay taxes.
Thursday, November 05, 2009
Perspective, sometimes
In a lot of ways, we're all just playing cops and robbers, cowboys and, um, noble native Americans. The costumes are more elaborate, the co-conspirators bigger, the Sheriff flabbier, but we're all just bigger, older versions of that little kid who needed comfort and encouragement and inspiration and, sometimes, a monster check under the bed.
Once in a blue moon, I have a moment of perspective. This, I realize, is what I have amounted to. This is that kid's life. Cool. I didn't win the Nobel prize - maybe it's not too late - but I did things I never imagined, did things I did imagine, and I think the little version of me that's been along for the ride is pretty pleased. Not smug, not without regrets, not without scars that have healed and scars that will never heal, but some of the stories would play well on the playground.
I really do have moments when I remember little me - or maybe little me re-emerges and takes the wheel awhile - and think, whoa. Wow.
And tonight I wondered, does President Obama ever think "whoa. I'm president. of the United. Freakin' States."? Did Bush, Reagan, Roosevelt? Forget your politics for a moment - love 'em or hate 'em - wouldn't that be a fun moment? If I were president, I would set aside a moment every day to be proud, awed, and humbled.
Once in a blue moon, I have a moment of perspective. This, I realize, is what I have amounted to. This is that kid's life. Cool. I didn't win the Nobel prize - maybe it's not too late - but I did things I never imagined, did things I did imagine, and I think the little version of me that's been along for the ride is pretty pleased. Not smug, not without regrets, not without scars that have healed and scars that will never heal, but some of the stories would play well on the playground.
I really do have moments when I remember little me - or maybe little me re-emerges and takes the wheel awhile - and think, whoa. Wow.
And tonight I wondered, does President Obama ever think "whoa. I'm president. of the United. Freakin' States."? Did Bush, Reagan, Roosevelt? Forget your politics for a moment - love 'em or hate 'em - wouldn't that be a fun moment? If I were president, I would set aside a moment every day to be proud, awed, and humbled.
Emergency preparedness: Careful how you store your tape
Tape is essential for emergency preparedness. In a hurricane zone, applying a big "x" of tape to exterior windows can reduce flying glass. It can be used to label things, close things, hold things open, hold things closed, you can tape plastic over a window to improve insulation, you can wrap metal tools to simulate an insulated/padded handle - duct tape is essential. Most men believe that anything you can't fix with duct tape, doesn't really need fixing.
But, you have to store it right. The garage seems like a natural place to keep duct tape, but it's one of the worst places to store it. My garage ranges from baking in the summer to freezing in the winter - all that temperature change made the glue on the duct tape glue the roll into a solid block. It's useless now.
More Tape Tips page 3: "If you need to store tape for a long time, keep it in a cool, dry place and turn it over from time to time so that the adhesive doesn’t migrate to one side of the roll."
Put waxed paper between rolls of tape to keep them from sticking together when stacked.
But, you have to store it right. The garage seems like a natural place to keep duct tape, but it's one of the worst places to store it. My garage ranges from baking in the summer to freezing in the winter - all that temperature change made the glue on the duct tape glue the roll into a solid block. It's useless now.
More Tape Tips page 3: "If you need to store tape for a long time, keep it in a cool, dry place and turn it over from time to time so that the adhesive doesn’t migrate to one side of the roll."
Put waxed paper between rolls of tape to keep them from sticking together when stacked.
Monday, November 02, 2009
Emergency preparedness is sooo 1950's
I didn't grow up with a family bomb-shelter or nuke drills at school. I am from the neglected generation, too early for school shooter lockdown drills and too late for the Red Scare. We beat the Russkies before I finished high school, and it was already evident that they were dying an economic death before that. Our parents were more likely to have grown up in bell-bottoms than poodle skirts. Rugged self-reliance was a sure sign of a Vietnam vet who hadn't come down from the panic yet.
No matter. The risks are different today, anyway. Our population is huge. Most of us live within 30 miles of a hospital and within 100 miles of a potential riot threat. How many times has Los Angeles burned? I remember the occasional childhood news report about grocery stores with ransacked shelves - usually during heavy rains. Now, grocers use just-in-time distribution to minimize shelf-spoilage and store rents, but that also means stores don't have much supply for panicked consumers. Forget the Russians, we're more worried about the Mexicans, the terrorists, the inner-city punks. We've gone almost native on natural disaster threats. I don't see many storm shelters, but I have heard people say "if I die in an Earthquake, it's God's will." After the earthquake, I'm sure the tune will change. I saw news interviews with people after one of Southern California's severe earthquakes - people were angry with grocery stores for running out of supplies, explaining that, since they don't cook, they don't keep food in the house.
Most of us have some food in the house. Most of us could survive a few miserable days eating plain canned beans in a disaster, even without a plan. Most of us don't, however, have a week's worth of water. We don't even know how much water we would need. We haven't stockpiled toilet paper or tylenol. We wouldn't need food, anyway - if the TV went out for more than 12 hours, there would be a line to jump off the nearest bridge. Lose the internet, and people will be calling the cops out and meeting them at the door with soap carved into a shiv yelling "just shoot me, please, put me out of my misery!" And who could blame them - have you ever tried having a conversation with your family? (j/k)
Now we face multiple possible pandemics, with one (swine flu) actually labeled a pandemic but, at this time, it is a fairly mild illness. The fear, however, is that swine flu will behave like the 1918 pandemic, which started with a mild flu in the spring and returned as a virulent soldier killer in the fall. Don't we have enough to worry about already, with terrorists and the economy and razor blades in Halloween candy? Anybody with a lick of sense has tuned out, bought a wii, and turned on, right? Besides, Swine flu is milder than regular flu. Except when it isn't.
Is your family prepared to spend a week too sick to shop or cook? Can you handle having mom or dad in the ICU for 3 months? Who will watch the kids if mom or dad spends a day or two in the hospital (many hospitals have banned young children from visiting hospital patients due to the flu). If the flu stays mild, you're unlikely to be hospitalized. But there are still stray bullets, reckless drivers, unknown food or bee allergies, etc.
If the flu does get bad, you and yours might stay healthy. You still might be impacted by absenteeism at work. Your electric company might not have enough workers to restore power quickly after the next storm. What if a natural disaster hit in the midst of a nasty flu season? Government aid isn't guaranteed in the first place - we're advised to have a 3-day supply of food and water and several weeks' supplies in case we have to shelter in place - but it could be delayed further by a nasty flu season, even without a pandemic or particularly deadly flu.
If you have an emergency preparedness plan, have you considered the possibility of being sick during a crisis? Have you considered the possibility of quarantine? In my area, there aren't too many natural disasters - floods are localized, we don't have an earthquake fault, we don't get hurricanes, and tornadoes are incredibly rare. But I hadn't really thought about being quarantined, and many of my emergency food stocks take more effort than a sick family would want to expend. I am adding a supply of ready-to-eat soups now. If the flu threat worsens, will communities open emergency shelters in a natural disaster?
If you haven't started preparing for an emergency, please start. Here's a very simple, basic plan: 2 gallons of water per person (or more if you can), 6 cans of Chunky soup or beefaroni per person (with pull-tab tops), a bottle of tylenol or ibuprofen, a large bottle of hand sanitizer, a deck of cards, and a box of breakfast bars or granola bars. It isn't much, but it can keep you alive for 3 days, you can throw it in a backpack for an evacuation, and it doesn't cost a whole heck of a lot. I would also add a battery powered radio, a flashlight or lantern, and batteries for both, along with plastic forks/spoons, a can opener, matches, candles, a couple of clean 5-gallon buckets (you can buy them at Home Depot) and a box of trash bags.
Keep everything together in case you need to evacuate (if you store empty suitcases, you can put your emergency supplies in a suitcase, just be sure to store it in the house or basement where temperatures won't exceed 72 degrees often). If you have pets, add a small bag of animal food and more water. You can just buy several gallon or 2 1/2 gallon bottles at the grocery store. If that seems too expensive, then wash out your empty 2 liter soda bottles, disinfect with a splash of bleach in water, rinse thoroughly, and fill with tap water. If your freezer has room, stuff some 3/4 full botles of water in the freezer and they can double as ice packs for your cooler if the refrigerator dies or the power goes out.
Don't use milk jugs to store drinking water - they're fine for toilet-flushing water, but FEMA says it isn't feasible to truly disinfect milk bottles, so you could have nasty germs growing in your survival water. Yuck.
No matter. The risks are different today, anyway. Our population is huge. Most of us live within 30 miles of a hospital and within 100 miles of a potential riot threat. How many times has Los Angeles burned? I remember the occasional childhood news report about grocery stores with ransacked shelves - usually during heavy rains. Now, grocers use just-in-time distribution to minimize shelf-spoilage and store rents, but that also means stores don't have much supply for panicked consumers. Forget the Russians, we're more worried about the Mexicans, the terrorists, the inner-city punks. We've gone almost native on natural disaster threats. I don't see many storm shelters, but I have heard people say "if I die in an Earthquake, it's God's will." After the earthquake, I'm sure the tune will change. I saw news interviews with people after one of Southern California's severe earthquakes - people were angry with grocery stores for running out of supplies, explaining that, since they don't cook, they don't keep food in the house.
Most of us have some food in the house. Most of us could survive a few miserable days eating plain canned beans in a disaster, even without a plan. Most of us don't, however, have a week's worth of water. We don't even know how much water we would need. We haven't stockpiled toilet paper or tylenol. We wouldn't need food, anyway - if the TV went out for more than 12 hours, there would be a line to jump off the nearest bridge. Lose the internet, and people will be calling the cops out and meeting them at the door with soap carved into a shiv yelling "just shoot me, please, put me out of my misery!" And who could blame them - have you ever tried having a conversation with your family? (j/k)
Now we face multiple possible pandemics, with one (swine flu) actually labeled a pandemic but, at this time, it is a fairly mild illness. The fear, however, is that swine flu will behave like the 1918 pandemic, which started with a mild flu in the spring and returned as a virulent soldier killer in the fall. Don't we have enough to worry about already, with terrorists and the economy and razor blades in Halloween candy? Anybody with a lick of sense has tuned out, bought a wii, and turned on, right? Besides, Swine flu is milder than regular flu. Except when it isn't.
Is your family prepared to spend a week too sick to shop or cook? Can you handle having mom or dad in the ICU for 3 months? Who will watch the kids if mom or dad spends a day or two in the hospital (many hospitals have banned young children from visiting hospital patients due to the flu). If the flu stays mild, you're unlikely to be hospitalized. But there are still stray bullets, reckless drivers, unknown food or bee allergies, etc.
If the flu does get bad, you and yours might stay healthy. You still might be impacted by absenteeism at work. Your electric company might not have enough workers to restore power quickly after the next storm. What if a natural disaster hit in the midst of a nasty flu season? Government aid isn't guaranteed in the first place - we're advised to have a 3-day supply of food and water and several weeks' supplies in case we have to shelter in place - but it could be delayed further by a nasty flu season, even without a pandemic or particularly deadly flu.
If you have an emergency preparedness plan, have you considered the possibility of being sick during a crisis? Have you considered the possibility of quarantine? In my area, there aren't too many natural disasters - floods are localized, we don't have an earthquake fault, we don't get hurricanes, and tornadoes are incredibly rare. But I hadn't really thought about being quarantined, and many of my emergency food stocks take more effort than a sick family would want to expend. I am adding a supply of ready-to-eat soups now. If the flu threat worsens, will communities open emergency shelters in a natural disaster?
If you haven't started preparing for an emergency, please start. Here's a very simple, basic plan: 2 gallons of water per person (or more if you can), 6 cans of Chunky soup or beefaroni per person (with pull-tab tops), a bottle of tylenol or ibuprofen, a large bottle of hand sanitizer, a deck of cards, and a box of breakfast bars or granola bars. It isn't much, but it can keep you alive for 3 days, you can throw it in a backpack for an evacuation, and it doesn't cost a whole heck of a lot. I would also add a battery powered radio, a flashlight or lantern, and batteries for both, along with plastic forks/spoons, a can opener, matches, candles, a couple of clean 5-gallon buckets (you can buy them at Home Depot) and a box of trash bags.
Keep everything together in case you need to evacuate (if you store empty suitcases, you can put your emergency supplies in a suitcase, just be sure to store it in the house or basement where temperatures won't exceed 72 degrees often). If you have pets, add a small bag of animal food and more water. You can just buy several gallon or 2 1/2 gallon bottles at the grocery store. If that seems too expensive, then wash out your empty 2 liter soda bottles, disinfect with a splash of bleach in water, rinse thoroughly, and fill with tap water. If your freezer has room, stuff some 3/4 full botles of water in the freezer and they can double as ice packs for your cooler if the refrigerator dies or the power goes out.
Don't use milk jugs to store drinking water - they're fine for toilet-flushing water, but FEMA says it isn't feasible to truly disinfect milk bottles, so you could have nasty germs growing in your survival water. Yuck.
Saturday, October 31, 2009
Morning Drivetime DUI: How many drinks can you sleep off in 8 hours?
Chronic DUI driver gets two years in prison: "A breath test an hour later showed that his blood-alcohol level was .22 percent, nearly three times the .08 percent level that constitutes drunken driving, authorities said." This was at 8 am.
When I took my first driving test, the only questions I missed were the DUI questions. It wasn't going to affect me, so I didn't pay much attention. That has remained true throughout my life - I avoid driving after drinking and I wait two hours per drink before driving if I absolutely HAVE to drive. So BAC hasn't been on my radar.
But this article piqued my interest and I looked up BAC. I was a bit surprised. By one source, it takes 45 minutes to lower BAC by .01, so the driver in this article would take over 16 hours to completely sober up. Granted, getting drunk to the .22 BAC level is a lot of hard work (depending on the guy's weight, it would take him 6 to 15 drinks in an hour, or 6 to 15 drinks more than his body broke down over the time he was drinking, to reach .22), so you could be talking a full 24 hour cycle, 8 hours of drinking to get that drunk, 16 hours to sober up. It would take him 11 1/4 hours to drop from a .22 BAC to the .07 BAC level that would make it legal to drive again, over 16 hours to totally sober up.
Women have it tougher, unless they bulk up. A little 120 lb. woman would reach a BAC of .22 with just 6 drinks. According to drinkinganddriving.org, an average person takes 45 minutes to lower their BAC by .01, so the woman would still need 11 1/4 hours to get down to the legal limit - although drivers are still impaired at .07, and can still be prosecuted for driving under the influence if they get into an incident behind the wheel - so the goal is to metabolize the alcohol down to a BAC of 0. From a BAC of .22, it takes 16 1/2 hours to drop to 0. Yikes. It's likely we've got a lot of drunk drivers in the morning commute.
Even the responsible drinker who walks to the bar or has a designated driver needs to count drinks if they're planning to drive in the morning. Put another way, if someone wants to wake up sober in 8 hours, the maximum BAC that can be metabolized over 8 hours of sleeping is about 10.66, 3 drinks for a little guy, 7 drinks for a 240 pound fellow, 2 1/2 drinks for a 100 lb. woman, 6 drinks for a 240 pound woman. So, for fun, I put together this handy little chart.
When I took my first driving test, the only questions I missed were the DUI questions. It wasn't going to affect me, so I didn't pay much attention. That has remained true throughout my life - I avoid driving after drinking and I wait two hours per drink before driving if I absolutely HAVE to drive. So BAC hasn't been on my radar.
But this article piqued my interest and I looked up BAC. I was a bit surprised. By one source, it takes 45 minutes to lower BAC by .01, so the driver in this article would take over 16 hours to completely sober up. Granted, getting drunk to the .22 BAC level is a lot of hard work (depending on the guy's weight, it would take him 6 to 15 drinks in an hour, or 6 to 15 drinks more than his body broke down over the time he was drinking, to reach .22), so you could be talking a full 24 hour cycle, 8 hours of drinking to get that drunk, 16 hours to sober up. It would take him 11 1/4 hours to drop from a .22 BAC to the .07 BAC level that would make it legal to drive again, over 16 hours to totally sober up.
Women have it tougher, unless they bulk up. A little 120 lb. woman would reach a BAC of .22 with just 6 drinks. According to drinkinganddriving.org, an average person takes 45 minutes to lower their BAC by .01, so the woman would still need 11 1/4 hours to get down to the legal limit - although drivers are still impaired at .07, and can still be prosecuted for driving under the influence if they get into an incident behind the wheel - so the goal is to metabolize the alcohol down to a BAC of 0. From a BAC of .22, it takes 16 1/2 hours to drop to 0. Yikes. It's likely we've got a lot of drunk drivers in the morning commute.
Even the responsible drinker who walks to the bar or has a designated driver needs to count drinks if they're planning to drive in the morning. Put another way, if someone wants to wake up sober in 8 hours, the maximum BAC that can be metabolized over 8 hours of sleeping is about 10.66, 3 drinks for a little guy, 7 drinks for a 240 pound fellow, 2 1/2 drinks for a 100 lb. woman, 6 drinks for a 240 pound woman. So, for fun, I put together this handy little chart.
How many drinks can an average person sleep off in 8 hours?
Caveats:
Alcohol metabolism varies from person to person. Dehydration, overall health, presence of other drugs in the bloodstream, including prescription and over-the-counter medications, etc., can impact blood alcohol absorption and metabolism. This chart is not advice for a specific person but merely a representation of assumptions about an "average" person.
Methodology:
Blood alcohol level continues rising after the last drink is ingested, so I assumed 7 hours to metabolize the drinks consumed. In 7 hours, at a rate of .01 BAC per hour, an average person can drop from a BAC of .093 to .00. Using the charts from drinkinganddriving.org, I divided the BAC per drink by weight into the .093 BAC that can be metabolized in 7 hours, arriving at the number of drinks metabolized in 7 hours.
Blood alcohol level continues rising after the last drink is ingested, so I assumed 7 hours to metabolize the drinks consumed. In 7 hours, at a rate of .01 BAC per hour, an average person can drop from a BAC of .093 to .00. Using the charts from drinkinganddriving.org, I divided the BAC per drink by weight into the .093 BAC that can be metabolized in 7 hours, arriving at the number of drinks metabolized in 7 hours.
Most people do not slam 2 to 5 drinks, one right after another, and go to bed. But if you go to bed at 10 pm and drive to work at 6 am, an average man can only sleep off 3 or 4 drinks. Figure you get off work, go to dinner, stop at the bar at 8 and leave at 10... I never realized how few drinks an average man can sleep off between 10 pm and the 6 am commute. If you're talking about the partying youngsters staying 'til closing time at 2 am, even a big guy can only sleep off 2 drinks before morning commute, and most folks don't stay at a bar 'til 2 am for just 2 drinks. Add in the variability of individual alcohol metabolism and the fact that a patron doesn't usually know if a mixed drink contains exactly 1 oz of liquor or if a glass of wine is exactly 5 ounces, and it's tough for a person to know their exact BAC when they leave a bar or party, let alone 8 hours later when leaving for work.
Maybe you'd find these charts more realistic:
How many drinks can an average person metabolize between the 6 pm happy hour and the 6 am commute?
Friday, October 30, 2009
Legislating to the Lowest Common Denominator (pardon my language)
Today I had to send a copy of my driver's license to buy psuedoephedrine allergy medicine by mail order. How about you create a list of people who actually committed drug crimes, and make them jump through hoops to buy pseudoephedrine. Stop hassling honest, responsible, law-abiding citizens. Stop legislating to the lowest common denominator. Put the burden of stupidity on the stupid and leave the rest of us the hell out of it.
If existing laws don't encourage law-abiding behavior, it's because you aren't enforcing them or the penalty isn't severe enough or the law doesn't belong on the books. Forcing honest people to jump through hoops in a futile attempt to force dishonest people to be honest - it isn't working, it's a flawed idea, and I'm tired of being bullied because lawmakers don't understand that the criminals don't CARE what the law is. That's why they're criminals. Do you really think that meth heads won't break into pharmacies if you cut off their supply? Has this law solved the meth problem? Then why do I have to jump through hoops to get freakin' cold medicine?
People convicted of a DUI don't have to register their purchases on a Federal database to buy alcohol. Hell, when federal drug databases DO catch abuse, nothing happens. When we get an explosion of laws and regulations, authorities can't enforce them all, and it's only honest people who suffer - honest people waste time and effort and money trying to understand and comply with all the regulations dumped on them, while the crooks continue to rob, lie, cheat, and steal.
I would like to see a constitutional amendment that specifies that every proposed law or rule MUST include specific plans for funding AND enforcement for at least 10 years, with a requirement that all laws are evaluated for possible unintended consequences over a 10-year period, AND all laws not directly impacting the safety of citizens expire after 10 years unless it is renewed by lawmakers, and, lastly, only emergency legislation can come up for a vote before voters have had 60 days to evaluate proposed legislation and contact their legislators with input.
Why shouldn't we hold lawmakers to a high standard of legislative quality? Why shouldn't they jump through some hoops before they force us to jump through hoops?
If existing laws don't encourage law-abiding behavior, it's because you aren't enforcing them or the penalty isn't severe enough or the law doesn't belong on the books. Forcing honest people to jump through hoops in a futile attempt to force dishonest people to be honest - it isn't working, it's a flawed idea, and I'm tired of being bullied because lawmakers don't understand that the criminals don't CARE what the law is. That's why they're criminals. Do you really think that meth heads won't break into pharmacies if you cut off their supply? Has this law solved the meth problem? Then why do I have to jump through hoops to get freakin' cold medicine?
People convicted of a DUI don't have to register their purchases on a Federal database to buy alcohol. Hell, when federal drug databases DO catch abuse, nothing happens. When we get an explosion of laws and regulations, authorities can't enforce them all, and it's only honest people who suffer - honest people waste time and effort and money trying to understand and comply with all the regulations dumped on them, while the crooks continue to rob, lie, cheat, and steal.
I would like to see a constitutional amendment that specifies that every proposed law or rule MUST include specific plans for funding AND enforcement for at least 10 years, with a requirement that all laws are evaluated for possible unintended consequences over a 10-year period, AND all laws not directly impacting the safety of citizens expire after 10 years unless it is renewed by lawmakers, and, lastly, only emergency legislation can come up for a vote before voters have had 60 days to evaluate proposed legislation and contact their legislators with input.
Why shouldn't we hold lawmakers to a high standard of legislative quality? Why shouldn't they jump through some hoops before they force us to jump through hoops?
Tuesday, October 06, 2009
we wil inhairet ur wurld wether u lik it or not (don't worry - the actual post is in real English)
Do you ever think about the fact that these txt'ng young people will be the ones running your senior centers, funding your Social Security, and controlling the media in your old age? How does that make you feel?
Do you think names will be spelled fu-net-ickly on pension checks? Breakups, firings, layoffs, death notices, and denial of benefits will be notified via text message. Suspenders will come back in style as today's youth refuse to pull their pants up but discover the hazards of trying to actually accomplish something with baggy pants halfway down their thighs. Roadway lanes will officially be recognized as mere "suggestions" and showing up to work on a "schedule" will be voluntary - even for judges, police officers, ER docs, etc. Oh, yeah - there won't be any primary care docs. The existing med school system won't let go of the brutal academic and residency requirements, so only materialistic young folk will suffer through it - and they ain't doing it for a piddling quarter mil a year.
The Star Spangled Banner will be re-recorded as a rap song, and our grandchildren's generation will rebel against their parents boring rap music - by embracing country music. Teenaged rebellion will end, because teens simply cannot shock their parents anymore with anything short of 1) fiscally and socially responsible behavior and/or 2) killing things. Google's face-recognition technology will be perfected, and Google will make a trillion bucks by searching out your doppelganger and hiring him/her to go out and make friends for you, without you having to suffer the inconvenience of pretending to care about "friends'" stupid lives and boring interests.
Americans will stage a bloodless coup in the entertainment industry, wresting control back from the Canadians. We will discover that 47% of illegal "Mexican" immigrants are actually illegal Canadian immigrants with their first-ever tan.
Naw. I think that the primacy of connection will fade and today's youth will discover the joy of workaholism to avoid dealing with non-work life. But I do think their kids will struggle to rebel musically, and I fear that they will decide to rebel by playing Country and Western music at a polite volume, wearing belts that hold their pants at their waist, and either taking piercing to the next level (pierced ribs, perhaps?) or eschewing piercing altogether. And all of today's citizens complaining about illegals taking American jobs, will find themselves complaining that they can't find home healthcare aids to change their Depends. Yes folks, even today's troubled youth can grow into tomorrow's entitled retirement class, but, first, they've got to kill us off to collect their inheritances. Nighty-night, sleep tight.
Do you think names will be spelled fu-net-ickly on pension checks? Breakups, firings, layoffs, death notices, and denial of benefits will be notified via text message. Suspenders will come back in style as today's youth refuse to pull their pants up but discover the hazards of trying to actually accomplish something with baggy pants halfway down their thighs. Roadway lanes will officially be recognized as mere "suggestions" and showing up to work on a "schedule" will be voluntary - even for judges, police officers, ER docs, etc. Oh, yeah - there won't be any primary care docs. The existing med school system won't let go of the brutal academic and residency requirements, so only materialistic young folk will suffer through it - and they ain't doing it for a piddling quarter mil a year.
The Star Spangled Banner will be re-recorded as a rap song, and our grandchildren's generation will rebel against their parents boring rap music - by embracing country music. Teenaged rebellion will end, because teens simply cannot shock their parents anymore with anything short of 1) fiscally and socially responsible behavior and/or 2) killing things. Google's face-recognition technology will be perfected, and Google will make a trillion bucks by searching out your doppelganger and hiring him/her to go out and make friends for you, without you having to suffer the inconvenience of pretending to care about "friends'" stupid lives and boring interests.
Americans will stage a bloodless coup in the entertainment industry, wresting control back from the Canadians. We will discover that 47% of illegal "Mexican" immigrants are actually illegal Canadian immigrants with their first-ever tan.
Naw. I think that the primacy of connection will fade and today's youth will discover the joy of workaholism to avoid dealing with non-work life. But I do think their kids will struggle to rebel musically, and I fear that they will decide to rebel by playing Country and Western music at a polite volume, wearing belts that hold their pants at their waist, and either taking piercing to the next level (pierced ribs, perhaps?) or eschewing piercing altogether. And all of today's citizens complaining about illegals taking American jobs, will find themselves complaining that they can't find home healthcare aids to change their Depends. Yes folks, even today's troubled youth can grow into tomorrow's entitled retirement class, but, first, they've got to kill us off to collect their inheritances. Nighty-night, sleep tight.
Tuesday, September 29, 2009
What is the purpose of government?
Imagine a world without governments. Think back hundreds and thousands of years, early humans, sparse populations, no mail or even currencies, just people, living their lives and trying to get by. Somebody says to these non-citizens, "Hey, I've got a great idea. Let's form a government!" What justification would be offered to entice people into becoming citizens, giving a portion of their crops to a tax collector, limiting their freedoms, bowing to the will of a monarch or a their fellow citizens? Pretend for a moment that the citizens aren't conquered or forced into citizenship; they are voluntarily subjecting themselves to government. Why? Really think about this for a minute.
Your answer forms the essence of your underlying beliefs about the purpose of government. The reasons I come up with are, first and foremost, protection from harm, senseless violence, theft, and murder. Establishment of reasonable laws that allow the most people to enjoy continued life and freedom from harm so they can continue to produce, to be family members and community members, without fear of having all that they have earned and produced taken from them unjustly. Establishing and training an army to defend against invasion would also fall under protection from harm.
The second reason I imagine is enforcement of contracts, establishment of currency, and similar rules that allow people to trade safely and fairly. I call this facilitation of commerce. If I promise to give you seeds now in exchange for food later, and you don't provide them, I may never trade seeds again. Then the only people who can farm are the ones who have something to trade in hand, right now.
I don't think people formed governments to provide sustenance to their neediest neighbors - they can do that without government. Even if they don't want to find the needy neighbor themselves, churches and other charities handle gifts of kindness quite well. I imagine a group of villagers discussing government and, if the topic of welfare came up, I imagine five of them saying "hey, Joe only needs welfare because he's lazy. If he wants food, send him over and I'll put him to work, and Jimmie - poor, old childless widower Jimmie - he should of put somethin' back when he was younger, but what's done is done. We all take turns over there, bringing him food and slopping his hogs. We don't need no government to do that!" (I don't think governments formed to provide mail services, since such a thing was barely contemplated and only affordable to the very wealthy, not that I object to the postal service - by providing a consistent means of giving legal notice, it facilitates commerce. There are plenty of new government roles that fall under the facilitating commerce and protecting from harm.)
So given my belief that the number one most important function of the government is protecting us from harm, I am disgusted and outraged at the laxity of law enforcement, the non-punitive nature of prison, and the failure to prosecute or even investigate so many crimes. Similarly, I think that military aggression is a breach of governmental purpose, since it unnecessarily puts citizen soldiers in harms way (and I say this in global terms, without any particular meaning about any current military action by any nation). Citizens have every right to ask whether a military action, over an event that does not put citizens in direct risk of harm right now, is a defensive or offensive move.
Your answer forms the essence of your underlying beliefs about the purpose of government. The reasons I come up with are, first and foremost, protection from harm, senseless violence, theft, and murder. Establishment of reasonable laws that allow the most people to enjoy continued life and freedom from harm so they can continue to produce, to be family members and community members, without fear of having all that they have earned and produced taken from them unjustly. Establishing and training an army to defend against invasion would also fall under protection from harm.
The second reason I imagine is enforcement of contracts, establishment of currency, and similar rules that allow people to trade safely and fairly. I call this facilitation of commerce. If I promise to give you seeds now in exchange for food later, and you don't provide them, I may never trade seeds again. Then the only people who can farm are the ones who have something to trade in hand, right now.
I don't think people formed governments to provide sustenance to their neediest neighbors - they can do that without government. Even if they don't want to find the needy neighbor themselves, churches and other charities handle gifts of kindness quite well. I imagine a group of villagers discussing government and, if the topic of welfare came up, I imagine five of them saying "hey, Joe only needs welfare because he's lazy. If he wants food, send him over and I'll put him to work, and Jimmie - poor, old childless widower Jimmie - he should of put somethin' back when he was younger, but what's done is done. We all take turns over there, bringing him food and slopping his hogs. We don't need no government to do that!" (I don't think governments formed to provide mail services, since such a thing was barely contemplated and only affordable to the very wealthy, not that I object to the postal service - by providing a consistent means of giving legal notice, it facilitates commerce. There are plenty of new government roles that fall under the facilitating commerce and protecting from harm.)
So given my belief that the number one most important function of the government is protecting us from harm, I am disgusted and outraged at the laxity of law enforcement, the non-punitive nature of prison, and the failure to prosecute or even investigate so many crimes. Similarly, I think that military aggression is a breach of governmental purpose, since it unnecessarily puts citizen soldiers in harms way (and I say this in global terms, without any particular meaning about any current military action by any nation). Citizens have every right to ask whether a military action, over an event that does not put citizens in direct risk of harm right now, is a defensive or offensive move.
Thursday, September 24, 2009
Drowning in fine print
Contracts are everywhere. I am averaging multiple contracts per day. Is it realistic to expect consumers to read and understand so many contracts when the average person doesn't even read one book a year?
I just tried to purchase an item on Etsy (the artist/crafters-direct sales site). At checkout, I had to create an account and check a box saying that I agree with Etsy's terms and conditions. So I opened the terms and conditions. The main body is 26 sections 12 pages and over 4,000 words, with another 4 documents incorporated by reference, two of which were about as long as (or longer than) the actual terms and conditions.
I can't make the purchase without agreeing to the contract. I am not going to agree to a contract without reading it. I don't have time to read a 20+ page document to make a simple purchase. So no sale. I bet the seller would have preferred to have a sale.
The average adult supposedly reads 250-300 words per minute. The Etsy terms and conditions alone would take about 14 minutes. The T&C plus the other documents incorporated by reference total a staggering 12,422 words. At 300 words per minute, that is more than 40 minutes of reading, to buy a $15 tchotchke. I wish I were kidding. I wish this was rare. Nope. Ain't rare. Ain't reasonable, either. You can't even watch Better Off Ted without signing a contract. Come on. Doesn't the law already cover most of this stuff?
Instead of a traditional tv/cable box/vcr entertainment center, I have an entertainment computer. It can play regular and blu-ray DVDs, tune in television stations, and play web-based entertainment, including Hulu, Netflix, and YouTube. There is a small problem, though. Because the system is across the room (though on a large screen TV), we have our browser set to display text in "very large." Most TV websites are configured to use the exact font style and size that the designer specifies, without scaling. When we try to watch a show - say, on ABC.com (the absolute worst offender) - we have to agree to the terms and conditions. Except they're not legible from across the room when the web designer doesn't allow the text to scale to the browser settings. So we're supposed to agree to a binding contract that we cannot read. It is the equivalent of a 4-6 point font. If you printed a written contract that small, it would not be enforceable. Yet companies think that their web contracts will be enforceable because they look right on the designer's monitor!
When I take my car in for service, signing the front of the service contract means I agree to everything on the back of the contract. When I go to the doctor's office, same thing - I have to certify that I agree with their privacy policy, that I agree to assign insurance benefits to them, and a couple other contracts that they make me sign on a regular basis. They get pissy about "holding up the line" if I actually read the contracts before signing them, and they're shocked that I ask for a copy (I don't sign anything that I don't get a copy of). And then there's always some clause about my having received some notice, which I haven't received, and it's a problem to track down a copy for me. Oh, yes, the reaction I get when I insist on reading a contract before signing it, having a copy, asking questions - it is clear that 1) most people don't read the contract(s) and 2) most companies count on people not reading the contracts.
It is an insidious loop. Consumers don't read the contract, so companies develop their procedures around that - like presenting a contract to the consumer and allowing 5 seconds for the consumer to sign, any longer holds up the line or keeps an employee from returning to their important work (because dealing with a customer who is signing a contract isn't important) and then an average consumer tries to read the contract and gets socially slapped down for it, so he or she doesn't try to read contracts anymore.
Not me. I'm antisocial. If I sign a contract, I'm going to read it, and if that inconveniences the party requesting the contract - they should have considered the possibility that some people want to know what rights they're signing away. When I bought my first house with my first spouse, we sat down at closing and I read the mortgage contract. I read the purchase contract to make sure it was recorded correctly. I read every single thing I signed, and I reviewed the list of 360 payment amounts to make sure it gibed with what I THOUGHT I was signing. And every single person at the closing table made pointed jokes, then tapped their fingers, then told me I didn't need to read the contracts, then sighed deeply, then told me that NO ONE reads the contracts. Halfway through, my spouse picked up on the social cues for me to stop reading, and parroted the "I'm sure it's all correct, nobody reads it, just sign and move on" messages from the "professionals." (That's a big part of why I'm on my second spouse. I am more concerned with signing an accurate contract than with impressing the salespeople that I am "easy to get along with" when that means potentially signing away major rights, privileges, or dollars. That, and the fact that I'm a jackass who makes everybody uncomfortable by reading contracts and such.)
That's right, people who sign contracts without reading are not just taking huge risks, they are harming people who DO read contracts. Company lawyers get emboldened by the knowledge that consumers don't read the contract. So they put things into the contract that most consumers would not willingly agree to (like eBay's infamous "we are just a venue, if you get ripped of, tough tooties") and then they write 20-40 page contracts because, hey, nobody reads them anyway, so it isn't an inconvenience to the customer to deal with ENORMOUS long contracts.
So, no matter how responsible or persnickety (or whatever adjective YOU choose) you are about reading contracts, you have to share a world with the illiterates of the world (people who can read but don't read even when it's really important, may as well be illiterate so I'm lumping them in with people who actually can't read). How long would a company stay in business if they forced customers to sign a 20 page document before letting them buy something, if most customers actually read the contract? Stores would only be open on Sundays, because that would be the only day people had enough time to shop! Consumerism would die on the vine.
Now, the mortgage crisis has shown that a lot of people were swimming naked, contract-wise. I wonder if people are going to start paying more attention to what they're signing? If so, will they object to spending 40 minutes reading a contract for the privilege of buying something for less than $20? Will people hire lawyers to translate the terms and conditions on Twitter, or will they just say no? Maybe consumer contracts will go back to being sane, rational two-paragraph statements. Ah, I can dream.
I just tried to purchase an item on Etsy (the artist/crafters-direct sales site). At checkout, I had to create an account and check a box saying that I agree with Etsy's terms and conditions. So I opened the terms and conditions. The main body is 26 sections 12 pages and over 4,000 words, with another 4 documents incorporated by reference, two of which were about as long as (or longer than) the actual terms and conditions.
I can't make the purchase without agreeing to the contract. I am not going to agree to a contract without reading it. I don't have time to read a 20+ page document to make a simple purchase. So no sale. I bet the seller would have preferred to have a sale.
The average adult supposedly reads 250-300 words per minute. The Etsy terms and conditions alone would take about 14 minutes. The T&C plus the other documents incorporated by reference total a staggering 12,422 words. At 300 words per minute, that is more than 40 minutes of reading, to buy a $15 tchotchke. I wish I were kidding. I wish this was rare. Nope. Ain't rare. Ain't reasonable, either. You can't even watch Better Off Ted without signing a contract. Come on. Doesn't the law already cover most of this stuff?
Instead of a traditional tv/cable box/vcr entertainment center, I have an entertainment computer. It can play regular and blu-ray DVDs, tune in television stations, and play web-based entertainment, including Hulu, Netflix, and YouTube. There is a small problem, though. Because the system is across the room (though on a large screen TV), we have our browser set to display text in "very large." Most TV websites are configured to use the exact font style and size that the designer specifies, without scaling. When we try to watch a show - say, on ABC.com (the absolute worst offender) - we have to agree to the terms and conditions. Except they're not legible from across the room when the web designer doesn't allow the text to scale to the browser settings. So we're supposed to agree to a binding contract that we cannot read. It is the equivalent of a 4-6 point font. If you printed a written contract that small, it would not be enforceable. Yet companies think that their web contracts will be enforceable because they look right on the designer's monitor!
When I take my car in for service, signing the front of the service contract means I agree to everything on the back of the contract. When I go to the doctor's office, same thing - I have to certify that I agree with their privacy policy, that I agree to assign insurance benefits to them, and a couple other contracts that they make me sign on a regular basis. They get pissy about "holding up the line" if I actually read the contracts before signing them, and they're shocked that I ask for a copy (I don't sign anything that I don't get a copy of). And then there's always some clause about my having received some notice, which I haven't received, and it's a problem to track down a copy for me. Oh, yes, the reaction I get when I insist on reading a contract before signing it, having a copy, asking questions - it is clear that 1) most people don't read the contract(s) and 2) most companies count on people not reading the contracts.
It is an insidious loop. Consumers don't read the contract, so companies develop their procedures around that - like presenting a contract to the consumer and allowing 5 seconds for the consumer to sign, any longer holds up the line or keeps an employee from returning to their important work (because dealing with a customer who is signing a contract isn't important) and then an average consumer tries to read the contract and gets socially slapped down for it, so he or she doesn't try to read contracts anymore.
Not me. I'm antisocial. If I sign a contract, I'm going to read it, and if that inconveniences the party requesting the contract - they should have considered the possibility that some people want to know what rights they're signing away. When I bought my first house with my first spouse, we sat down at closing and I read the mortgage contract. I read the purchase contract to make sure it was recorded correctly. I read every single thing I signed, and I reviewed the list of 360 payment amounts to make sure it gibed with what I THOUGHT I was signing. And every single person at the closing table made pointed jokes, then tapped their fingers, then told me I didn't need to read the contracts, then sighed deeply, then told me that NO ONE reads the contracts. Halfway through, my spouse picked up on the social cues for me to stop reading, and parroted the "I'm sure it's all correct, nobody reads it, just sign and move on" messages from the "professionals." (That's a big part of why I'm on my second spouse. I am more concerned with signing an accurate contract than with impressing the salespeople that I am "easy to get along with" when that means potentially signing away major rights, privileges, or dollars. That, and the fact that I'm a jackass who makes everybody uncomfortable by reading contracts and such.)
That's right, people who sign contracts without reading are not just taking huge risks, they are harming people who DO read contracts. Company lawyers get emboldened by the knowledge that consumers don't read the contract. So they put things into the contract that most consumers would not willingly agree to (like eBay's infamous "we are just a venue, if you get ripped of, tough tooties") and then they write 20-40 page contracts because, hey, nobody reads them anyway, so it isn't an inconvenience to the customer to deal with ENORMOUS long contracts.
So, no matter how responsible or persnickety (or whatever adjective YOU choose) you are about reading contracts, you have to share a world with the illiterates of the world (people who can read but don't read even when it's really important, may as well be illiterate so I'm lumping them in with people who actually can't read). How long would a company stay in business if they forced customers to sign a 20 page document before letting them buy something, if most customers actually read the contract? Stores would only be open on Sundays, because that would be the only day people had enough time to shop! Consumerism would die on the vine.
Now, the mortgage crisis has shown that a lot of people were swimming naked, contract-wise. I wonder if people are going to start paying more attention to what they're signing? If so, will they object to spending 40 minutes reading a contract for the privilege of buying something for less than $20? Will people hire lawyers to translate the terms and conditions on Twitter, or will they just say no? Maybe consumer contracts will go back to being sane, rational two-paragraph statements. Ah, I can dream.
Friday, September 04, 2009
Cover the children's ears, folks, it's a controversial idea
http://www.cnn.com/2009/POLITICS/09/04/obama.schools/index.html?iref=mpstoryview
Cnn reports:
Okay, I'm probably preaching to the choir, but, seriously? What has happened to America - and particularly to conservative Americans - that we can no longer tolerate having our children exposed to anything but the parents' own ideas?
Fer crying out loud, President Obama is OUR president. All of us. When libs were faulting Bush for Iraq, right wingers did plenty of hand-wringing about the importance of honoring the President, but when the vote is on the other foot, parents are upset at the idea that their children might actually hear a message from the President? Please, please tell me this is a joke. The President is the leader of our nation and he deserves our respect - not necessarily our agreement or affection, but at least the courtesy we would extend to a slightly batty elderly relative - out of respect for our nation. And if we can humor crazy Aunt Edna, then I think we're capable of treating the office of the Presidency - and, by extension, the person who holds that office - with enough respect to recognize his right to believe as he believes, even when we disagree with him. In doing so, we teach our children a little something about behaving appropriately and honoring our nation - all the more so when we teach our children to respect the President we may not like.
Within our free society - the free society that ultra-right-wing and ultra-left-wing conservatives claim to value - there is room for difference of opinion. You might believe that Ben & Jerry's is the best ice cream ever made, and I would argue that homemade, fresh, natural ice cream is the best ever made. It's okay - we can agree to disagree. When we teach our children to recognize and respect disparate (and sometimes wrong) points of view, we raise good citizens. When we stick our fingers in the kids' ears and yell "lalalala I can't hear you," we fail to teach our children the important lessons of maturity. When our kids are exposed to bad ideas, we can teach them the all-important ability to measure each claim on its own merits, a skill that will protect them when exposed to truly bone-head ideas like street racing, playing russian roulette, becoming young parents, and all manner of dangerous youthful inclinations.
Listen up, American extremists (lefties AND righties!), it is possible for children to see or hear an idea without accepting it at face value. That is why nature gave parents the ability to talk and gave children the ability to listen, understand, and consider. If your children are exposed to ideas that run counter to your beliefs, then talk to the kids about it. Explain why you believe differently. Explain why you hope they will grow up agreeing with you on the topic. If you are right, your kids will probably recognize that you are right and they will probably agree with you.
Yep, that's right folks, children can watch people kiss or discuss sex on TV and still think "hmm, that's not right for me at my age;" they can watch their peers get high and say "I think that's a bad idea, and I'm not going to join in;" they can listen to the President and think "I respect our nation's ideals, I respect the office of the Presidency, and I am still going to fight overly liberal policies that I believe are detrimental to the future of our nation." Parents have the ability - and the responsibility - to help children recognize differences of opinion, different religions, different cultures, and different values and make the best decisions that the child can make.
Cnn reports:
The White House said the address, set for Tuesday, and accompanying suggested lesson plans are simply meant to encourage students to study hard and stay in school.
Many conservative parents aren't buying it. They're convinced the president
is going to use the opportunity to press a partisan political agenda on
impressionable young minds.
"Thinking about my kids in school having to listen to that just really
upsets me," suburban Colorado mother Shanneen Barron told CNN Denver affiliate
KMGH. "I'm an American. They are Americans, and I don't feel that's OK. I feel
very scared to be in this country with our leadership right now."
Okay, I'm probably preaching to the choir, but, seriously? What has happened to America - and particularly to conservative Americans - that we can no longer tolerate having our children exposed to anything but the parents' own ideas?
Fer crying out loud, President Obama is OUR president. All of us. When libs were faulting Bush for Iraq, right wingers did plenty of hand-wringing about the importance of honoring the President, but when the vote is on the other foot, parents are upset at the idea that their children might actually hear a message from the President? Please, please tell me this is a joke. The President is the leader of our nation and he deserves our respect - not necessarily our agreement or affection, but at least the courtesy we would extend to a slightly batty elderly relative - out of respect for our nation. And if we can humor crazy Aunt Edna, then I think we're capable of treating the office of the Presidency - and, by extension, the person who holds that office - with enough respect to recognize his right to believe as he believes, even when we disagree with him. In doing so, we teach our children a little something about behaving appropriately and honoring our nation - all the more so when we teach our children to respect the President we may not like.
Within our free society - the free society that ultra-right-wing and ultra-left-wing conservatives claim to value - there is room for difference of opinion. You might believe that Ben & Jerry's is the best ice cream ever made, and I would argue that homemade, fresh, natural ice cream is the best ever made. It's okay - we can agree to disagree. When we teach our children to recognize and respect disparate (and sometimes wrong) points of view, we raise good citizens. When we stick our fingers in the kids' ears and yell "lalalala I can't hear you," we fail to teach our children the important lessons of maturity. When our kids are exposed to bad ideas, we can teach them the all-important ability to measure each claim on its own merits, a skill that will protect them when exposed to truly bone-head ideas like street racing, playing russian roulette, becoming young parents, and all manner of dangerous youthful inclinations.
Listen up, American extremists (lefties AND righties!), it is possible for children to see or hear an idea without accepting it at face value. That is why nature gave parents the ability to talk and gave children the ability to listen, understand, and consider. If your children are exposed to ideas that run counter to your beliefs, then talk to the kids about it. Explain why you believe differently. Explain why you hope they will grow up agreeing with you on the topic. If you are right, your kids will probably recognize that you are right and they will probably agree with you.
Yep, that's right folks, children can watch people kiss or discuss sex on TV and still think "hmm, that's not right for me at my age;" they can watch their peers get high and say "I think that's a bad idea, and I'm not going to join in;" they can listen to the President and think "I respect our nation's ideals, I respect the office of the Presidency, and I am still going to fight overly liberal policies that I believe are detrimental to the future of our nation." Parents have the ability - and the responsibility - to help children recognize differences of opinion, different religions, different cultures, and different values and make the best decisions that the child can make.
Friday, August 28, 2009
Chicago taxis
We took a working vacation, with 6 days per week in classes. It was a busy, busy trip. We were always running, and we took taxis almost everywhere.
I have lived and/or worked in several major cities: Honolulu, Baton Rouge, San Francisco, etc. I have visited many cities. I have never enjoyed taxi service like this. We stepped out the front door of the hotel, put a hand in the air, and the tax was at the curb before we got there 98% of the time. We came out of a grocery store into a downpour, and retreated to the covered entrance. I saw a taxi in the street, waved once, and the taxi pulled right up, alongside the covered entrance. Day and night, when we wanted a taxi, it was never more than a few minutes' wait to find one.
Sure, taxis are pricey, but so are cars. It was faster to take a taxi than to pull our car out of the parking garage, pay the parking fee, drive to our destination, and find parking there. And taxi fares were generally comparable to parking fees. The ride was... interesting. I have seen racecar drivers drive less aggressively. The cab drivers whipped from lane to lane, accelerated hard, braked hard, and actually managed to keep aware of what was going on around them. We heard an interesting assortment of music from around the world.
We have considered moving to Chicago. The convenience of taxis is certainly a draw. Nowhere else have I had such an easy time finding an available taxi, on any street in any neighborhood.
I have lived and/or worked in several major cities: Honolulu, Baton Rouge, San Francisco, etc. I have visited many cities. I have never enjoyed taxi service like this. We stepped out the front door of the hotel, put a hand in the air, and the tax was at the curb before we got there 98% of the time. We came out of a grocery store into a downpour, and retreated to the covered entrance. I saw a taxi in the street, waved once, and the taxi pulled right up, alongside the covered entrance. Day and night, when we wanted a taxi, it was never more than a few minutes' wait to find one.
Sure, taxis are pricey, but so are cars. It was faster to take a taxi than to pull our car out of the parking garage, pay the parking fee, drive to our destination, and find parking there. And taxi fares were generally comparable to parking fees. The ride was... interesting. I have seen racecar drivers drive less aggressively. The cab drivers whipped from lane to lane, accelerated hard, braked hard, and actually managed to keep aware of what was going on around them. We heard an interesting assortment of music from around the world.
We have considered moving to Chicago. The convenience of taxis is certainly a draw. Nowhere else have I had such an easy time finding an available taxi, on any street in any neighborhood.
Thursday, August 27, 2009
Back from vacation... Do you believe in miracles?
I've just returned from a working vacation in Chicago. Because of the dog, we drove to Chicago and back. As we drove out of Salt Lake City, the Interstate had a large gap between the eastbound and westbound lanes. Two lanes in each direction with a valley about 8 lanes wide in between, speed limit was 70 or 75 mph. A car on the eastbound side spun, flipped into the dirt between eastbound and westbound, and rolled all the way across the valley, finally landing, wheels down, on the westbound shoulder. Not knowing if the car would travel into the westbound lanes of traffic, we came to a complete stop and pulled onto the shoulder virtually parallel with the other car. A young woman was driving, alone, her rear hatch and backseat fully loaded with her belongings.
She was able to walk away from the car - I'll never know if she suffered shock or injuries from the tumbling, but her emergence from the accident, relatively unscathed, was amazing. The windshield shattered, but stayed intact and fell clear of the car. The driver did not even appear to have cuts or scrapes. The car tumbled fast enough that most of the forces pressed in the sides, not the roof of the car. The car landed wheels down, on the shoulder of the opposite lanes of traffic, but fully on the shoulder and fully clear of the traffic lane. Even that was a stroke of luck - the nearest ambulance service was almost certainly located near Salt Lake City, and she landed on their fastest path of approach.
An off-duty EMT was traveling behind the accident, and stopped to render aid, with first aid kit in hand. Traffic was light. Several cars stopped, and we were still close enough to the city that cell phone coverage was excellent. No one who stopped knew exactly where we were - with the EMT present and the driver in decent shape, we drove on to find a mile-marker and call it in to 911. Apparently, her tire blew out and she lost control of the car.
Late august, loaded car - probably a student returning to college. Despite all her good fortune in surviving the accident, it was probably a disaster for her. It didn't look like the kind of car someone would carry comp and collision coverage on, and even an insurance deductible can be a catastrophe for a college student. Some of her belongings fell out beside the interstate - not much, but if all your important belongings fit in your car, a little bit of stuff is a lot. I hope she is safe and well and able to complete her travels with minimal disruption.
She was able to walk away from the car - I'll never know if she suffered shock or injuries from the tumbling, but her emergence from the accident, relatively unscathed, was amazing. The windshield shattered, but stayed intact and fell clear of the car. The driver did not even appear to have cuts or scrapes. The car tumbled fast enough that most of the forces pressed in the sides, not the roof of the car. The car landed wheels down, on the shoulder of the opposite lanes of traffic, but fully on the shoulder and fully clear of the traffic lane. Even that was a stroke of luck - the nearest ambulance service was almost certainly located near Salt Lake City, and she landed on their fastest path of approach.
An off-duty EMT was traveling behind the accident, and stopped to render aid, with first aid kit in hand. Traffic was light. Several cars stopped, and we were still close enough to the city that cell phone coverage was excellent. No one who stopped knew exactly where we were - with the EMT present and the driver in decent shape, we drove on to find a mile-marker and call it in to 911. Apparently, her tire blew out and she lost control of the car.
Late august, loaded car - probably a student returning to college. Despite all her good fortune in surviving the accident, it was probably a disaster for her. It didn't look like the kind of car someone would carry comp and collision coverage on, and even an insurance deductible can be a catastrophe for a college student. Some of her belongings fell out beside the interstate - not much, but if all your important belongings fit in your car, a little bit of stuff is a lot. I hope she is safe and well and able to complete her travels with minimal disruption.
Saturday, June 20, 2009
You won't get eaten at S.F. Zoo anymore, but you won't have any money left over for popcorn, either
San Francisco Zoo had a little "oopsies!" last year when a group of teens/young adults *allegedly* taunted a tiger that had never climbed out of its enclosure before. Whether they taunted or didn't taunt, the tiger found something especially delightfully delicious about that particular trio and did something no San Francisco tiger had ever done before - climbed out of her substandard enclosure and went a-huntin' for a taste of Dhaliwal*. This was not the economic high-point of their year. The zoo is now running a deficit.
It got me wondering - how bad are zoo prices in San Francisco? Well, not much worse than a movie, but, then again, the zoo pays their stars in grass, hay, kibble, mice... Here's how some zoos stack up:
City Adult/Child admission
(Generally, children under 3 are free, children over 10-13 are charged as adults)
San Francisco:
Sacramento: $9.50/7
San Diego: $35/26
Portland, Oregon: $10.50/7.50
Bronx, NY: $15/11
Queens, NY: $7/3
Boston, MA: $13/7
Minnesota: $16/10
Columbus, OH: $12/7
Chicago: Free
Washington D.C.: Free
Topeka: $5.25/3.75
You take an upper class family, they can take their kids on Safari. A middle class family can send their kids to a school with regular zookeeper visits. But poor family can raise a little genius, too, because they have access to so many stimulating experiences in American cities. Museums, Shakespeare in the Park, matinee concerts, libraries - this is the American dream, rags to riches on nothing more than pluck, perseverance, determination, sacrifice and enough love for a parent to get off their butt and schlep around to cultural experiences that narrow the gap between rich and poor. America became a leader, a beacon to immigrants from throughout the world - because we offered equality of opportunity, not because we offered really good food stamps.
And God bless 'em all. How many privileged middle class families do you see that can't be bothered to slap their child and say "you say please when you order the Barista to bring you a latte, young man! And pull your pants up!" You show me a young, poor, struggling single parent spending evenings and weekends parenting, and I'll show you 5 entitled middle-class or better families that think parenting is a fun hobby, one that should never be corrupted with discipline, responsibility or, you know, parenting.
I am a bit saddened the cost of taking children to the zoo is so high in so many cities. One of the beautiful facets of American life is that we make a tremendous amount of cultural and educational experiences available and accessible for all families. I'm not saying the government needs to guarantee every kid an annual zoo pass. A lot of zoo funding comes from committed donors, fundraisers, and volunteers. I think the 1 adult+1 child=$20 zoos should really look at their financial management and their business model. I'll tell you what, if I can walk into the zoo for free when I have a free hour, I am more likely to expose my child to the wonders of the world beyond our hometown - and I am also more likely to buy my kid the $5 ripoff bottled water, or the annual membership or the full retail priced book in the gift shop. You still get the money, but we all get to feel better about it, and the poor families still get to stimulate their children's intellectual growth.
* Yes, the Dhaliwal's friend, a young man reported to have been a pillar of society whose biggest flaw was hanging around with friends who had been arrested before and were arrested again, he is dead and his parents are now mourning the loss of their beloved son. I am sorry for their pain, and I realize that my opening paragraph is in somewhat poor taste with respect to those parents' feelings. But my BS meter really dislikes implausible stories, and it loathes implausible stories that then result in fat payouts to the people spouting the implausible stories, especially when said payout is likely to be used to pay criminal defense attorneys.
It got me wondering - how bad are zoo prices in San Francisco? Well, not much worse than a movie, but, then again, the zoo pays their stars in grass, hay, kibble, mice... Here's how some zoos stack up:
City Adult/Child admission
(Generally, children under 3 are free, children over 10-13 are charged as adults)
San Francisco:
Sacramento: $9.50/7
San Diego: $35/26
Portland, Oregon: $10.50/7.50
Bronx, NY: $15/11
Queens, NY: $7/3
Boston, MA: $13/7
Minnesota: $16/10
Columbus, OH: $12/7
Chicago: Free
Washington D.C.: Free
Topeka: $5.25/3.75
You take an upper class family, they can take their kids on Safari. A middle class family can send their kids to a school with regular zookeeper visits. But poor family can raise a little genius, too, because they have access to so many stimulating experiences in American cities. Museums, Shakespeare in the Park, matinee concerts, libraries - this is the American dream, rags to riches on nothing more than pluck, perseverance, determination, sacrifice and enough love for a parent to get off their butt and schlep around to cultural experiences that narrow the gap between rich and poor. America became a leader, a beacon to immigrants from throughout the world - because we offered equality of opportunity, not because we offered really good food stamps.
And God bless 'em all. How many privileged middle class families do you see that can't be bothered to slap their child and say "you say please when you order the Barista to bring you a latte, young man! And pull your pants up!" You show me a young, poor, struggling single parent spending evenings and weekends parenting, and I'll show you 5 entitled middle-class or better families that think parenting is a fun hobby, one that should never be corrupted with discipline, responsibility or, you know, parenting.
I am a bit saddened the cost of taking children to the zoo is so high in so many cities. One of the beautiful facets of American life is that we make a tremendous amount of cultural and educational experiences available and accessible for all families. I'm not saying the government needs to guarantee every kid an annual zoo pass. A lot of zoo funding comes from committed donors, fundraisers, and volunteers. I think the 1 adult+1 child=$20 zoos should really look at their financial management and their business model. I'll tell you what, if I can walk into the zoo for free when I have a free hour, I am more likely to expose my child to the wonders of the world beyond our hometown - and I am also more likely to buy my kid the $5 ripoff bottled water, or the annual membership or the full retail priced book in the gift shop. You still get the money, but we all get to feel better about it, and the poor families still get to stimulate their children's intellectual growth.
* Yes, the Dhaliwal's friend, a young man reported to have been a pillar of society whose biggest flaw was hanging around with friends who had been arrested before and were arrested again, he is dead and his parents are now mourning the loss of their beloved son. I am sorry for their pain, and I realize that my opening paragraph is in somewhat poor taste with respect to those parents' feelings. But my BS meter really dislikes implausible stories, and it loathes implausible stories that then result in fat payouts to the people spouting the implausible stories, especially when said payout is likely to be used to pay criminal defense attorneys.
Friday, June 12, 2009
CaptchaKu Haiku by Captcha
I seem to get interesting word combinations from Captcha. Today's entry:
Morning Upon
Taiwan Periled
Overlooks Inquiry
Following Finding
Electoral Complete
Although, perhaps it meant Iran.
Morning Upon
Taiwan Periled
Overlooks Inquiry
Following Finding
Electoral Complete
Although, perhaps it meant Iran.
Tuesday, May 05, 2009
Stress Tests: An Abundance of Caution, or a Warning?
Have you noticed that the government has been giving banks "stress tests" to determine whether the banks have enough capital - for what? The stress tests supposedly measure banks' are sufficiently capitalized to survive a severe and prolonged recession. Why on earth would we test banks' ability to survive a severe and prolonged recession if we believed that the economy will improve by year's end?
It's a little reminiscent of the logical inconsistency between banks needing TARP bailouts last winter, and reporting record profits by spring. Am I the only one who feels like we've fallen into bizarro world?
It's a little reminiscent of the logical inconsistency between banks needing TARP bailouts last winter, and reporting record profits by spring. Am I the only one who feels like we've fallen into bizarro world?
Wednesday, April 29, 2009
Perspective, News, Media
I think the single most important development in the last century is the widespread and nearly instant access to news, entertainment, and information from throughout the world. Television started it, cable TV advanced it, and the Internet strapped a rocket to its butt and lit the fuse. One odd little consequence of media proliferation is the selection of stories. Coupled with vast population increases, information sharing has changed drastically.
A hundred years ago, a person in a small town got most of their local news over the fence (gossip), and got their business/politics news from the papers. The proportion of stories would be fairly similar to the proportion of events that impacted a community (albeit with a slight emphasis on scandal and a bit of inaccuracy in gossip). So if one house was burglarized, the average person heard about one house being burglarized. If a house in another town was burglarized, that burglary would be reported in their local news. When I was growing up in the 1970s, parents worried about their children being stolen. Was it because child disappearances were an epidemic? No. It was because child disappearances seemed like an epidemic when every news-watching person in every town in America heard about virtually all of the (still rare) child disappearances happening throughout the country. Television made all news feel local.
Then you throw population increases into the mix, and the world feels mighty dangerous, indeed. Even if child disappearances held steady at (I'm totally making this number up out of thin air) 1 per 10,000 population, every time the population doubled, that would mean that the number of cases doubled. In 1930, our population was less than 3 million; today, it is over 300 million. That's 100 times more people. If long-term trends continued unchanged, that should represent 100 times more crimes, 100 times more illnesses, 100 times more divorces, 100 times more marriages and church picnics and everything else that is, generally, proportional to population.
Our perception of risk has jumped off the deep end. Some kid shoots himself while playing with grandpa's gun and the story is different through the TV lens. A hundred years ago, if you heard over the fence that little Johnny shot himself accidentally, you knew little Johnny and you knew he was an idiot. Now, you hear about it on TV and the reporter doesn't mention that little Johnny is an idiot, and a lot of people respond with "we need a law to keep that from happening to my kid!" Pretty soon, we have a lot of laws to protect normal kids from abnormal risks, and we get into a legal game of one-upmanship. "By golly, if it's illegal to talk on a cell phone while driving, it out to be illegal to ____ [fill in the blank]. That's WAY more dangerous!"
Perspective has been completely destroyed. Our brains have to filter out information just to survive (imagine if you couldn't ignore all of the conversations at other tables in a restaurant), and we alternately filter out anything that affects "the rich," "the poor," "minorities," "majorities" and various groups we aren't in, we filter out anything affecting an irrelevant number of people (only 1,000 dead? that's not news), and then we filter in anything intolerable-but-possible (children dying? I couldn't stand to have my child die!).
Maybe every newscast should end with a shot of perspective. "20 people have been diagnosed with the possible killer flu. In other news, 299,999,935 Americans probably don't have killer flu. 299,999,600 Americans have not been kidnapped, and 140,000,000 Americans did not pay any Federal income tax this year. 298 Million Americans have not been killed or seriously injured in an industrial accident, while 400,000 Americans have been laid-off as their jobs shipped to nations that do not try to outlaw every possible danger. Thank you, and Good night."
A hundred years ago, a person in a small town got most of their local news over the fence (gossip), and got their business/politics news from the papers. The proportion of stories would be fairly similar to the proportion of events that impacted a community (albeit with a slight emphasis on scandal and a bit of inaccuracy in gossip). So if one house was burglarized, the average person heard about one house being burglarized. If a house in another town was burglarized, that burglary would be reported in their local news. When I was growing up in the 1970s, parents worried about their children being stolen. Was it because child disappearances were an epidemic? No. It was because child disappearances seemed like an epidemic when every news-watching person in every town in America heard about virtually all of the (still rare) child disappearances happening throughout the country. Television made all news feel local.
Then you throw population increases into the mix, and the world feels mighty dangerous, indeed. Even if child disappearances held steady at (I'm totally making this number up out of thin air) 1 per 10,000 population, every time the population doubled, that would mean that the number of cases doubled. In 1930, our population was less than 3 million; today, it is over 300 million. That's 100 times more people. If long-term trends continued unchanged, that should represent 100 times more crimes, 100 times more illnesses, 100 times more divorces, 100 times more marriages and church picnics and everything else that is, generally, proportional to population.
Our perception of risk has jumped off the deep end. Some kid shoots himself while playing with grandpa's gun and the story is different through the TV lens. A hundred years ago, if you heard over the fence that little Johnny shot himself accidentally, you knew little Johnny and you knew he was an idiot. Now, you hear about it on TV and the reporter doesn't mention that little Johnny is an idiot, and a lot of people respond with "we need a law to keep that from happening to my kid!" Pretty soon, we have a lot of laws to protect normal kids from abnormal risks, and we get into a legal game of one-upmanship. "By golly, if it's illegal to talk on a cell phone while driving, it out to be illegal to ____ [fill in the blank]. That's WAY more dangerous!"
Perspective has been completely destroyed. Our brains have to filter out information just to survive (imagine if you couldn't ignore all of the conversations at other tables in a restaurant), and we alternately filter out anything that affects "the rich," "the poor," "minorities," "majorities" and various groups we aren't in, we filter out anything affecting an irrelevant number of people (only 1,000 dead? that's not news), and then we filter in anything intolerable-but-possible (children dying? I couldn't stand to have my child die!).
Maybe every newscast should end with a shot of perspective. "20 people have been diagnosed with the possible killer flu. In other news, 299,999,935 Americans probably don't have killer flu. 299,999,600 Americans have not been kidnapped, and 140,000,000 Americans did not pay any Federal income tax this year. 298 Million Americans have not been killed or seriously injured in an industrial accident, while 400,000 Americans have been laid-off as their jobs shipped to nations that do not try to outlaw every possible danger. Thank you, and Good night."
Friday, April 24, 2009
Remodeling: Contractor Progress Payments
We've run into a bit of a problem with our contractor. It seems that, despite us telling him many times that we want everything done to code and we want all necessary permits, he doesn't like to pull permits. His contract - his boilerplate contract, not ours - says that he will handle all the permits and all the permit costs. So he called us the day before beginning work and asked if we wanted a permit for the job. Of course we do. Say what you will about the government's right to control construction of our house, we feel that the prudent thing for us to do is to comply with the applicable laws. If the law says we need a permit, we want a permit.
So the contractor demanded the permit fees. We pointed out that the contract says the fees are included, and that we agreed on a price in the belief that, as the contract says, permit fees are included. Consequently, the contractor feels aggrieved and has been difficult to work with. If I knew a week ago what I know now, I would have hired someone else. And I'm all the more peeved because we selected the contractor who presented the best quality quote, not the lowest price. In the process of dealing with the "forgotten" permit, the contractor breached our trust. His subsequent attempts to cut corners on the job have further damaged our respect for him.
Today we made another progress payment. We have a big mess, bare wall studs, exposed wiring, partial plumbing, a hole in the floor. Our contractor now has 65% of the contract cost in his pocket. I'm feeling a bit nervous. I made a mistake in agreeing to front-load the progress payments so much. For example, we made a large payment upon completion of framing, not realizing that framing is basically the first task. Now, the job is perhaps 30% complete, while the payments are 65% complete. I have no reason to believe that the subcontractors have been paid; if the contractor doesn't pay them, Mechanics Lien law allows the subcontractors to sue us for their fee (even though we have already paid their fee to the General Contractor), and to place a lien against the house if we refuse to pay. If the contractor quit now, he would have a legal obligation to refund us the excess payments, but we would have the burden of recouping that money from him - not an ideal position to be in when local contractors are going bankrupt.
In the future, I will make sure that we have a more detailed definition of what work shall be complete before a progress payment is due. I will also make sure that the payments are slightly back-loaded; the contractor will have to finish the job to receive payment in full for the work.
I also discovered a neat little website. In Sacramento County, you can look up building permits by contractor name, company name, job site address, etc. So next time I hire a contractor, I will look up his/her permits before I interview him or her. If he/she has not pulled a substantial number of contracts, I will ask why. And when I buy a house, I will search for permits issued to that address. If there are no permits and the house has obviously-new items that require a permit, I would rather know that before I buy than after.
So the contractor demanded the permit fees. We pointed out that the contract says the fees are included, and that we agreed on a price in the belief that, as the contract says, permit fees are included. Consequently, the contractor feels aggrieved and has been difficult to work with. If I knew a week ago what I know now, I would have hired someone else. And I'm all the more peeved because we selected the contractor who presented the best quality quote, not the lowest price. In the process of dealing with the "forgotten" permit, the contractor breached our trust. His subsequent attempts to cut corners on the job have further damaged our respect for him.
Today we made another progress payment. We have a big mess, bare wall studs, exposed wiring, partial plumbing, a hole in the floor. Our contractor now has 65% of the contract cost in his pocket. I'm feeling a bit nervous. I made a mistake in agreeing to front-load the progress payments so much. For example, we made a large payment upon completion of framing, not realizing that framing is basically the first task. Now, the job is perhaps 30% complete, while the payments are 65% complete. I have no reason to believe that the subcontractors have been paid; if the contractor doesn't pay them, Mechanics Lien law allows the subcontractors to sue us for their fee (even though we have already paid their fee to the General Contractor), and to place a lien against the house if we refuse to pay. If the contractor quit now, he would have a legal obligation to refund us the excess payments, but we would have the burden of recouping that money from him - not an ideal position to be in when local contractors are going bankrupt.
In the future, I will make sure that we have a more detailed definition of what work shall be complete before a progress payment is due. I will also make sure that the payments are slightly back-loaded; the contractor will have to finish the job to receive payment in full for the work.
I also discovered a neat little website. In Sacramento County, you can look up building permits by contractor name, company name, job site address, etc. So next time I hire a contractor, I will look up his/her permits before I interview him or her. If he/she has not pulled a substantial number of contracts, I will ask why. And when I buy a house, I will search for permits issued to that address. If there are no permits and the house has obviously-new items that require a permit, I would rather know that before I buy than after.
Wednesday, April 15, 2009
Is it better to earn $11k/year or $60k/year?
The Sacramento Bee has an interesting graphic depicting how long it takes various people to earn $100,000. They show a single waitress at the bottom of the heap, the poor woman takes 7 years to earn $100k. But that doesn't tell the whole story.
A family of three, headed by a single parent, earning $11,700/year gets much more than $11k/year's worth of standard of living.
The family qualifies for a Section 8 housing assistance, worth over $12,000/year.
The parent qualifies for the Earned Income Credit, worth $4,710/year.
Temporary Assistance for Needy Families gives them $8,448/year.
They get Food stamps worth $372/month, or $4,464/year.
The qualify for free school lunches, worth $2.57 each, or about $925/year.
They qualify for MediCal/Medicaid worth, conservatively, $300/month or $3,600/year.
They don't pay a penny in taxes. They contribute 8%, $941/year, towards Social Security.
Equivalent Net disposable income? $45,900. With welfare benefits, the needy family has about the same standard of living as a family earning $50k a year.
Contrast that with an accountant earning $60,000 a year to support a family of 3. The accountant will pay about $3,800 in California state taxes, and about $3,600 in Federal taxes, and $4,600 towards social security.
Net income after taxes: $47,900.
For all the years spent in college, all of the job stress, all of the work and planning that went into having a decent middle-class job, the accountant has just $4,000 more disposable income than the welfare family has. Meanwhile, the accountant has to worry about job security; the needy family has financial security because they will still have food and housing even if they lose their job.
The accountant takes work home with him/her, reads accounting journals, studies up on changes to the tax code. The job has a lot of responsibilities that spill over outside work hours. The accountant is a salaried employee, with no compensation for overtime. If you divide the disposable income by hours worked, the accountant actually has a lower net hourly wage than the "needy" parent has.
What is wrong with this picture?
The chart shows the income of a single parent with 2 children, earning $60,000 a year. The long periwinkle blue bar is the income the family keeps after taxes, the three small bars on top are state and federal income tax and social security/FICA withholdings.
The bar on the right represents a single-parent household with 2 children, earning $11,772 in wages. The blue bar near the top is social security withholdings, which is the only income tax the parent pays. The periwinkle blue bar second from top is wages. The multiple bars below wages show how much government subsidies raise the family's effective income.
Edit: Added the bar chart.
A family of three, headed by a single parent, earning $11,700/year gets much more than $11k/year's worth of standard of living.
The family qualifies for a Section 8 housing assistance, worth over $12,000/year.
The parent qualifies for the Earned Income Credit, worth $4,710/year.
Temporary Assistance for Needy Families gives them $8,448/year.
They get Food stamps worth $372/month, or $4,464/year.
The qualify for free school lunches, worth $2.57 each, or about $925/year.
They qualify for MediCal/Medicaid worth, conservatively, $300/month or $3,600/year.
They don't pay a penny in taxes. They contribute 8%, $941/year, towards Social Security.
Equivalent Net disposable income? $45,900. With welfare benefits, the needy family has about the same standard of living as a family earning $50k a year.
Contrast that with an accountant earning $60,000 a year to support a family of 3. The accountant will pay about $3,800 in California state taxes, and about $3,600 in Federal taxes, and $4,600 towards social security.
Net income after taxes: $47,900.
For all the years spent in college, all of the job stress, all of the work and planning that went into having a decent middle-class job, the accountant has just $4,000 more disposable income than the welfare family has. Meanwhile, the accountant has to worry about job security; the needy family has financial security because they will still have food and housing even if they lose their job.
The accountant takes work home with him/her, reads accounting journals, studies up on changes to the tax code. The job has a lot of responsibilities that spill over outside work hours. The accountant is a salaried employee, with no compensation for overtime. If you divide the disposable income by hours worked, the accountant actually has a lower net hourly wage than the "needy" parent has.
What is wrong with this picture?
The chart shows the income of a single parent with 2 children, earning $60,000 a year. The long periwinkle blue bar is the income the family keeps after taxes, the three small bars on top are state and federal income tax and social security/FICA withholdings.
The bar on the right represents a single-parent household with 2 children, earning $11,772 in wages. The blue bar near the top is social security withholdings, which is the only income tax the parent pays. The periwinkle blue bar second from top is wages. The multiple bars below wages show how much government subsidies raise the family's effective income.
Edit: Added the bar chart.
Friday, April 03, 2009
Everybody's talking about a bottom in real estate
"Of all mortgages covered, at year-end slightly more than 10 percent were nonperforming, meaning behind on payments, compared to about 7 percent nonperforming in September. "
From: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/03/BUU716RR4Q.DTL
Article is a good read, with some nifty graphics.
Here in the Sacramento area, I've seen homes listed as short sales for a very long time at unreasonable prices. I made an offer on one, an incredibly risky all-cash offer, and the bank didn't accept it. The house is now in the process of foreclosure, and I would not offer the same price for it today (the market has fallen since then, and the house has had a full year of not being maintained). Generally, when a house goes from short sale to foreclosure, the bank drops the price to a reasonable price, sometimes even a fabulous price. Sometimes, although it's rare, we see short sales at reasonable prices. Why are some so incredibly over-priced that they cannot sell, while others are priced almost as low as foreclosure prices?
It appears that the banks are only willing to be reasonable on short sales if the buyer stops making payments. As long as the buyer is paying, the bank will insist on an unreasonably high price. I base this observation on another observation - over-priced short sales sit on the market for a long time, some go well over a year, which suggests that the borrower is continuing to pay (otherwise the banks would have foreclosed). Well-priced short sales, if they do not sell as short sales, come back on the market rather quickly as foreclosures, which suggests that they were in foreclosure (not making payments) while listed as short sales.
So some of the increase in "seriously delinquent" mortgages may actually be a sign of buyers catching on to the bank's tricks, rather than an indication of increasing illiquidity. Still, the fact that serious delinquencies are increasing even as the government hands out free loan modifications, coupled with the overhang of inventory that is not presently on the market, suggests that the bottom may not yet be here. The article says that 10% of all mortgages are non-performing; when you think about the fact that many, many people have less than 10 years remaining on their mortgages, many people bought their homes in the 1980's for less than $30,000, a whole lot of people owe very little on their homes, 10% of all mortgages is a LOT. Then again, at least in Sacramento, there are homes priced so low that they cash flow even at very low rent assumptions, even if expenses are rather high (like if the owner hires a property manager). So, bottom, top, I don't know, but caution is still warranted. Not inaction, not abject terror, but caution. As I look to buy, I keep reminding myself of the old saw, "markets can stay irrational longer than you can stay liquid."
From: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/03/BUU716RR4Q.DTL
Article is a good read, with some nifty graphics.
Here in the Sacramento area, I've seen homes listed as short sales for a very long time at unreasonable prices. I made an offer on one, an incredibly risky all-cash offer, and the bank didn't accept it. The house is now in the process of foreclosure, and I would not offer the same price for it today (the market has fallen since then, and the house has had a full year of not being maintained). Generally, when a house goes from short sale to foreclosure, the bank drops the price to a reasonable price, sometimes even a fabulous price. Sometimes, although it's rare, we see short sales at reasonable prices. Why are some so incredibly over-priced that they cannot sell, while others are priced almost as low as foreclosure prices?
It appears that the banks are only willing to be reasonable on short sales if the buyer stops making payments. As long as the buyer is paying, the bank will insist on an unreasonably high price. I base this observation on another observation - over-priced short sales sit on the market for a long time, some go well over a year, which suggests that the borrower is continuing to pay (otherwise the banks would have foreclosed). Well-priced short sales, if they do not sell as short sales, come back on the market rather quickly as foreclosures, which suggests that they were in foreclosure (not making payments) while listed as short sales.
So some of the increase in "seriously delinquent" mortgages may actually be a sign of buyers catching on to the bank's tricks, rather than an indication of increasing illiquidity. Still, the fact that serious delinquencies are increasing even as the government hands out free loan modifications, coupled with the overhang of inventory that is not presently on the market, suggests that the bottom may not yet be here. The article says that 10% of all mortgages are non-performing; when you think about the fact that many, many people have less than 10 years remaining on their mortgages, many people bought their homes in the 1980's for less than $30,000, a whole lot of people owe very little on their homes, 10% of all mortgages is a LOT. Then again, at least in Sacramento, there are homes priced so low that they cash flow even at very low rent assumptions, even if expenses are rather high (like if the owner hires a property manager). So, bottom, top, I don't know, but caution is still warranted. Not inaction, not abject terror, but caution. As I look to buy, I keep reminding myself of the old saw, "markets can stay irrational longer than you can stay liquid."
Wednesday, March 25, 2009
Putting saving first
It sounds so scary when experts tell us how much we need to save for retirement. For every $10,000 we want to spend, they tell us we need to save $250,000 (for a 4% withdrawal rate, which maximizes the likelihood it will last throughout old age). That just sounds impossible for a family making $40k a year - heck, it sounds impossible for a family making $100k a year in high-cost-of-living areas where people are likely to earn that much. But small steps lead to medium steps which lead to great results.
$25 a month is a start. Heck, if $10 is all a person can save, the $120 they've saved after just a year is a small fortune. Then, when they don't have to pay late fees and use check-cashing services to do basic banking, they can save even more. Then, when they have a couple thousand dollars, when some swindler tells them they can buy that $1500 sofa for "just $25 a month" (forever), the little voice in the back of the brain says "gosh, that's almost every dollar I've got. It took me years to save $1,500. Maybe I better buy a $100 sofa off craigslist until I can afford to pay cash for a new sofa." That is a life-altering moment that leads to financial freedom.
Cash savings means not having to sell the car for gas money. It means not refinancing the house every 2 years for living money. It means paying off the house in 30 years, and having an affordable place to live in retirement. It means having money to buy a house when everyone is selling, and being able to take that terrific job in another state, even though the employer won't pay moving expenses. It means keeping food on the table during illness or layoffs. It means being able to afford insurance so that all the little problems life throws at you - and life will throw them - don't bankrupt you.
Two years ago, on Christmas eve, our water heater died. We had just inherited a child, with private school expenses and transportation expenses and food expenses and clothing expenses that we hadn't prepared for. But we had savings, and we had a determination to get our budget under control. So we cut some expenses that we didn't need, and we dipped into savings a for a few months while we adjusted, and when that water heater died on Christmas Eve, we were blessed. We didn't have to go to the stores to return all the presents, and we didn't have to wait until the plumber that accepted credit cards opened after Christmas. We called the 24-hour plumber, wrote a check, and went to celebrate the holidays. Let me tell you, we've both been in situations where it would have been different. But we've made saving a priority - so we made continuing to save a priority - and we're not rich, but it sure feels wealthy knowing we can give Christmas presents without going into debt, even after spending 800 unexpected dollars on Christmas Eve.
Saving starts with whatever small steps we can do. Nobody needs a latte or a dinner out or a new TV. Experts sometimes make us feel like we may as well give up if we can't put away a thousand dollars a month. That's just not true. A dollar a month - if it's really all we can afford to save - gives us the small fortune of $12 after a year. $5 a month is $60 in year. $100 a month is $1200 in a year. Don't even think of it as a year, if that sounds too hard. It's just saving once a month, twelve times. Lather, rinse, repeat.
Saving is a gift to ourselves, a promise that someday, we won't go into financial crisis every time we need an oil change or a brake job or a $100 continuing education class. Eventually, after a few years, it's the gift of peace. It's getting out of debt, staying out debt, and having options. Then, as the decades pass, it's the gift of understanding money, understanding how hard it is to earn, how hard it is to keep, how much easier it is - in the long run - when we just say no rather than say "charge it!" At retirement or during an ugly layoff, it is the gift of staying fed, clothed, and housed.
A lot of experts say to pay off the credit cards before putting money into savings. For me, I needed to save first, to have the security of not needing the credit card when unexpected expenses popped up. I needed to have the sense that I could do it, that it was worth it, and what it really took. I started saving young, but things kept happening, and I eventually gave up. Just plain gave up. But when I started again, I realized that my sense of money was skewed. My idea of what was "a lot" of money had been framed by credit limits and how much I could buy for "just $25 a month" and news reports of billions, and, honestly, by the false belief that I earned my full salary every year. After taxes and deductions, after housing and food, I had less than half my salary left over, but I still thought - when spending - in terms of "I earn $X a year." After I struggled long and hard to save $1,500, I truly understood that $1,500 was a lot of money.
There's a sneaky side benefit to saving, too. If you pay 15% of your income in taxes, and you save 10%, you're only living on 75% of your income. So if you lose your job, you only need to make up 75% of your income to maintain your standard of living. If you couldn't afford to save and eat out every week, you already gave up eating out once a week - you don't have to cut back so much during lean times. It's tough to cut back after a layoff - you already feel low about losing your job, and then having to cut back makes you feel poor, on top of it. But if you cut back to what you could afford before crisis hit, so you could save, you have a cash cushion and you don't need as much. That's double the bang for the buck.
Nobody talks about the benefits of saving. They just say you should do it, save for a rainy day. I say, save for a sunny day, because savings makes those rainy days a lot less dreary. If it never rains, well, saving is still mighty good. At first, it's just less drama, but then it's dramatic benefits, being able to buy a house, being able to go on a trip without borrowing, being able to pursue a dream or retire early or put your kid through school. It's a freedom and lightness that everyone should experience for as much of their life as possible. Put saving first, before the lattes, before dinners out, before the luxuries, because financial security is the best luxury money can buy.
$25 a month is a start. Heck, if $10 is all a person can save, the $120 they've saved after just a year is a small fortune. Then, when they don't have to pay late fees and use check-cashing services to do basic banking, they can save even more. Then, when they have a couple thousand dollars, when some swindler tells them they can buy that $1500 sofa for "just $25 a month" (forever), the little voice in the back of the brain says "gosh, that's almost every dollar I've got. It took me years to save $1,500. Maybe I better buy a $100 sofa off craigslist until I can afford to pay cash for a new sofa." That is a life-altering moment that leads to financial freedom.
Cash savings means not having to sell the car for gas money. It means not refinancing the house every 2 years for living money. It means paying off the house in 30 years, and having an affordable place to live in retirement. It means having money to buy a house when everyone is selling, and being able to take that terrific job in another state, even though the employer won't pay moving expenses. It means keeping food on the table during illness or layoffs. It means being able to afford insurance so that all the little problems life throws at you - and life will throw them - don't bankrupt you.
Two years ago, on Christmas eve, our water heater died. We had just inherited a child, with private school expenses and transportation expenses and food expenses and clothing expenses that we hadn't prepared for. But we had savings, and we had a determination to get our budget under control. So we cut some expenses that we didn't need, and we dipped into savings a for a few months while we adjusted, and when that water heater died on Christmas Eve, we were blessed. We didn't have to go to the stores to return all the presents, and we didn't have to wait until the plumber that accepted credit cards opened after Christmas. We called the 24-hour plumber, wrote a check, and went to celebrate the holidays. Let me tell you, we've both been in situations where it would have been different. But we've made saving a priority - so we made continuing to save a priority - and we're not rich, but it sure feels wealthy knowing we can give Christmas presents without going into debt, even after spending 800 unexpected dollars on Christmas Eve.
Saving starts with whatever small steps we can do. Nobody needs a latte or a dinner out or a new TV. Experts sometimes make us feel like we may as well give up if we can't put away a thousand dollars a month. That's just not true. A dollar a month - if it's really all we can afford to save - gives us the small fortune of $12 after a year. $5 a month is $60 in year. $100 a month is $1200 in a year. Don't even think of it as a year, if that sounds too hard. It's just saving once a month, twelve times. Lather, rinse, repeat.
Saving is a gift to ourselves, a promise that someday, we won't go into financial crisis every time we need an oil change or a brake job or a $100 continuing education class. Eventually, after a few years, it's the gift of peace. It's getting out of debt, staying out debt, and having options. Then, as the decades pass, it's the gift of understanding money, understanding how hard it is to earn, how hard it is to keep, how much easier it is - in the long run - when we just say no rather than say "charge it!" At retirement or during an ugly layoff, it is the gift of staying fed, clothed, and housed.
A lot of experts say to pay off the credit cards before putting money into savings. For me, I needed to save first, to have the security of not needing the credit card when unexpected expenses popped up. I needed to have the sense that I could do it, that it was worth it, and what it really took. I started saving young, but things kept happening, and I eventually gave up. Just plain gave up. But when I started again, I realized that my sense of money was skewed. My idea of what was "a lot" of money had been framed by credit limits and how much I could buy for "just $25 a month" and news reports of billions, and, honestly, by the false belief that I earned my full salary every year. After taxes and deductions, after housing and food, I had less than half my salary left over, but I still thought - when spending - in terms of "I earn $X a year." After I struggled long and hard to save $1,500, I truly understood that $1,500 was a lot of money.
There's a sneaky side benefit to saving, too. If you pay 15% of your income in taxes, and you save 10%, you're only living on 75% of your income. So if you lose your job, you only need to make up 75% of your income to maintain your standard of living. If you couldn't afford to save and eat out every week, you already gave up eating out once a week - you don't have to cut back so much during lean times. It's tough to cut back after a layoff - you already feel low about losing your job, and then having to cut back makes you feel poor, on top of it. But if you cut back to what you could afford before crisis hit, so you could save, you have a cash cushion and you don't need as much. That's double the bang for the buck.
Nobody talks about the benefits of saving. They just say you should do it, save for a rainy day. I say, save for a sunny day, because savings makes those rainy days a lot less dreary. If it never rains, well, saving is still mighty good. At first, it's just less drama, but then it's dramatic benefits, being able to buy a house, being able to go on a trip without borrowing, being able to pursue a dream or retire early or put your kid through school. It's a freedom and lightness that everyone should experience for as much of their life as possible. Put saving first, before the lattes, before dinners out, before the luxuries, because financial security is the best luxury money can buy.
Wednesday, March 18, 2009
Swimmin' nekkid
Buffet is quoted as having said, "when the tide goes out, you see who's been swimming nekkid." You see who can't make ends meet anymore, with their credit cards cut off. You see who can't handle their mortgage payment and who can't handle their car payment. But, then again, you see who hasn't been swimming nekkid. You see who is keeping their house, keeping their car, quietly buying a little investment property, picking up some small luxuries and still not going bankrupt.
You start to see that the people buying generic groceries with coupons are paying cash, while the people buying the expensive brands of potato chips are using food stamps. You notice that the big-screen TVs are being loaded into couple-year-old boring cars, and the food bank is loading groceries into bimmers and Escalades. If you're smart, you notice that the geegaws of conspicuous consumption are dragging people underwater, while the sensible cars and total lack of bling that embarrassed people's kids a few years ago turn out to be tools for financial freedom.
I have tried to teach my nieces and nephews some basic finance lessons, like saving and avoiding debt. It has sometimes been hard to teach those lessons, when the kids don't see me as a financial guru or expert. People who know about money, they think, have enough of it to drive the Escalade and live in the the McMansion and wear designer clothes. I live in a totally mundane house, drive a mundane car - gosh, the kids think, if I knew anything about money, I would be able to afford better.
Which, of course, was exactly what I was trying to teach them. If I afforded better - usually on borrowed money - I wouldn't be able to build savings. Getting rich, without an inheritance, an incredibly lucrative career, or a lottery jackpot, is all about spending less than you earn. It's about plugging the budget when you start "leaking" money. It's about putting a little away, regularly, until it becomes more than just a little, and then investing it wisely so it can grow into a little something. But all those nekkid swimmers out there, living high on borrowed money, undermined that message - for my nieces and nephews and for the rest of the kids.
So maybe it's not such a bad thing that the tide is going out for a while. Young people's heads have been filled with lies about finance. They thought that people who spend a lot of money are "rich" while people who spend moderately - but actually save - are poor. "The Millionaire Next Door" showed that more millionaires are created on moderate incomes but high savings rates, than are created on generous incomes but luxurious lifestyles. Self-made Millionaires, it turned out, clip coupons and re-use ziploc baggies and they don't have to have NFL-star salaries to make themselves Millionaires.
If young people today, going out into a work force where pensions are no longer available, where life expectancies have grown faster than savings rates, where globalization means outsourcing crummy production jobs AND well-paid professional jobs, if those young people are going to have the luxury of financial security and freedom from extreme financial stress, they need to learn the spend-less-and-save philosophy (or else the tax-more-and-make-do-with-less philosophy).
When the people who only had credit are, well, discredited as financial experts, that's painful in the short-term but healthy in the long term. When savers get the goodies and over-stretched borrowers don't, it rewards responsible behavior and creates an incentive for other people to mimic responsible behavior. That's a good message for the kids.
You start to see that the people buying generic groceries with coupons are paying cash, while the people buying the expensive brands of potato chips are using food stamps. You notice that the big-screen TVs are being loaded into couple-year-old boring cars, and the food bank is loading groceries into bimmers and Escalades. If you're smart, you notice that the geegaws of conspicuous consumption are dragging people underwater, while the sensible cars and total lack of bling that embarrassed people's kids a few years ago turn out to be tools for financial freedom.
I have tried to teach my nieces and nephews some basic finance lessons, like saving and avoiding debt. It has sometimes been hard to teach those lessons, when the kids don't see me as a financial guru or expert. People who know about money, they think, have enough of it to drive the Escalade and live in the the McMansion and wear designer clothes. I live in a totally mundane house, drive a mundane car - gosh, the kids think, if I knew anything about money, I would be able to afford better.
Which, of course, was exactly what I was trying to teach them. If I afforded better - usually on borrowed money - I wouldn't be able to build savings. Getting rich, without an inheritance, an incredibly lucrative career, or a lottery jackpot, is all about spending less than you earn. It's about plugging the budget when you start "leaking" money. It's about putting a little away, regularly, until it becomes more than just a little, and then investing it wisely so it can grow into a little something. But all those nekkid swimmers out there, living high on borrowed money, undermined that message - for my nieces and nephews and for the rest of the kids.
So maybe it's not such a bad thing that the tide is going out for a while. Young people's heads have been filled with lies about finance. They thought that people who spend a lot of money are "rich" while people who spend moderately - but actually save - are poor. "The Millionaire Next Door" showed that more millionaires are created on moderate incomes but high savings rates, than are created on generous incomes but luxurious lifestyles. Self-made Millionaires, it turned out, clip coupons and re-use ziploc baggies and they don't have to have NFL-star salaries to make themselves Millionaires.
If young people today, going out into a work force where pensions are no longer available, where life expectancies have grown faster than savings rates, where globalization means outsourcing crummy production jobs AND well-paid professional jobs, if those young people are going to have the luxury of financial security and freedom from extreme financial stress, they need to learn the spend-less-and-save philosophy (or else the tax-more-and-make-do-with-less philosophy).
When the people who only had credit are, well, discredited as financial experts, that's painful in the short-term but healthy in the long term. When savers get the goodies and over-stretched borrowers don't, it rewards responsible behavior and creates an incentive for other people to mimic responsible behavior. That's a good message for the kids.
Tuesday, March 17, 2009
Now it's the Insurance Companies
It's all so predictable. In the interests of marital harmony, I have avoided saying "I told you so," but my tongue is getting sore from being bitten all the time.
If you're a Californian, you're probably headed for double incentives to sell off your excess cars. The car tax is going up, and it's a darn good bet that your car insurance is going up, too. Because there's a natural cycle in the insurance industry, and most people don't realize that it rises and falls on the stock market.
The basic model for insurers is to sell insurance at just about what they expect to pay out (spread over many, many insurance customers) so that the insurance side of the business is barely profitable. But they don't pay out every dollar in the year they get it - so they invest their cash reserves and make their money on the investment profits. In a sense, the investments have been subsidizing our "cheap" premiums during all these high-growth years.
When investment markets are booming, insurance companies lower their rates to attract more customers - to attract more investment capital. Eventually, the boom fades, the investment returns slow or even reverse, and the insurance companies then scramble to layoff employees, cut costs, and raise premiums to at least cover costs. Trouble is, right when insurance companies start losing out on investment returns, their claims start increasing. People who would work through the pain in good times, take disability when jobs are scarce. People "accidentally" leave an unattended candle in the house that won't sell, they "lose" valuables and they "break" insured stuff (like cars with hefty loan payments). People make stupid mistakes when they're stressed out about the economy, and people do desperate things when the economic problems hit too close to home. Theft increases, vandalism increases, worker comp fraud increases, and the insurance companies start feeling like even their mothers only call because they need something.
Compounding the natural cycles in the insurance industry, this year we've got once-in-a-lifetime investment losses and a sudden contraction in the number of individuals (families and businesses) that can carry the necessary rate increases. When you get three generations living in one house, they're only paying one homeowners' insurance policy. A lot of people in financial distress discover that they don't need a second car, maybe not even a first car. And businesses that go out of business drop all of their insurance policies - general liability, workers' comp, key-man life insurance, business continuation insurance, et. al.
Girl Scouts aren't the only ones passing their cost increases on to the consumer.
If you're a Californian, you're probably headed for double incentives to sell off your excess cars. The car tax is going up, and it's a darn good bet that your car insurance is going up, too. Because there's a natural cycle in the insurance industry, and most people don't realize that it rises and falls on the stock market.
The basic model for insurers is to sell insurance at just about what they expect to pay out (spread over many, many insurance customers) so that the insurance side of the business is barely profitable. But they don't pay out every dollar in the year they get it - so they invest their cash reserves and make their money on the investment profits. In a sense, the investments have been subsidizing our "cheap" premiums during all these high-growth years.
When investment markets are booming, insurance companies lower their rates to attract more customers - to attract more investment capital. Eventually, the boom fades, the investment returns slow or even reverse, and the insurance companies then scramble to layoff employees, cut costs, and raise premiums to at least cover costs. Trouble is, right when insurance companies start losing out on investment returns, their claims start increasing. People who would work through the pain in good times, take disability when jobs are scarce. People "accidentally" leave an unattended candle in the house that won't sell, they "lose" valuables and they "break" insured stuff (like cars with hefty loan payments). People make stupid mistakes when they're stressed out about the economy, and people do desperate things when the economic problems hit too close to home. Theft increases, vandalism increases, worker comp fraud increases, and the insurance companies start feeling like even their mothers only call because they need something.
Compounding the natural cycles in the insurance industry, this year we've got once-in-a-lifetime investment losses and a sudden contraction in the number of individuals (families and businesses) that can carry the necessary rate increases. When you get three generations living in one house, they're only paying one homeowners' insurance policy. A lot of people in financial distress discover that they don't need a second car, maybe not even a first car. And businesses that go out of business drop all of their insurance policies - general liability, workers' comp, key-man life insurance, business continuation insurance, et. al.
Girl Scouts aren't the only ones passing their cost increases on to the consumer.
Sunday, March 01, 2009
Incongruous thought of the day
MySpace: "The W H Macy appraciation societies aims are to celebrate the William H Macy through the wearing of costumes..."
(If you don't know, William H. Macy is an American character actor, and I don't know that he has ever worn a costume, outside of wardrobe and sometimes props, like eye glasses.)
(If you don't know, William H. Macy is an American character actor, and I don't know that he has ever worn a costume, outside of wardrobe and sometimes props, like eye glasses.)
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