Wednesday, October 24, 2007

For Children of the 80s Only

Just had this discussion with our school secretary when I should have been writing lesson plans: everybody who went to high school in the 80s should know the movie "The Breakfast Club." It's one of the John Hughes classics (along with Pretty in Pink, 16 Candles, and St. Elmo's Fire). Here's the quiz question for you, if you're old enough: which character were you? To recap, for the sake of the 80s-challenged, there was Emilio Estevez (the jock), Molly Ringwald (the princess), Anthony Michael Hall (the nerd), Ally Sheedy (the misfit), and Judd Nelson (the stoner/rebel). I'll go first--my students think since I'm a coach and have a track state championship banner hanging on my classroom wall that I must have been Emilio Estevez. But deep down, I'm Anthony Michael Hall.

As an aside, our secretary says I'm none of the above--that I'm Harry Anderson of "Night Court." And we decided that my principal is Henry Blake from MASH (which makes Sheila into Radar O'Reilly--also a good fit).

So answer with a character from "Breakfast Club," and, if appropriate, any other 80's pop-culture character who fits you.

Monday, October 15, 2007

Best TV Series Ever

I think we've safely established that the "Rocky" series is the best movie series ever... although the first three "Star Wars" (I mean the first three MADE, not episodes I-III) may be in the conversation. Even so, I have to be in a certain mood to watch Star Wars, or the Godfather (arguably the finest individual film ever made), or even LOTR.

But TV... ah, there's a tough one. And it's made tougher by the fact that entire series--supposedly even very good ones--have come and gone without me ever seeing an episode. But even though I love Seinfeld, and Cheers, there really is no contest. The best ever TV series is certainly MASH. Like "Rocky," it doesn't matter what mood I'm in... if MASH is on, I can watch it and enjoy it. Best character development of any sitcom ever. And if you don't tear up every time Henry Blake's chopper goes down in reruns, you have no heart. Period.

Wednesday, October 10, 2007

More Money Figures

Just a quick couple of notes about my rich man, poor man posts below. I went to Wiki and looked up the median national income. It's a little over $48,000 a year. The middle 20% of familes earn between $36k and $58k. I would speculate that an average-sized family could live a pretty basic middle-class lifestyle on that in most of the country. As I have pointed out before, in my hometown there is a disconnect between income and housing prices, which makes my examples seem a little skewed. And as both Becky and Pete have rightly pointed out, with a little common sense and self-control, it's not impossible to be comfortable on even a below-average income. I don't mean to suggest at all that a family making decent middle-class money in the USA is "poor," especially not by the standards of the rest of the world. I just wanted to point out that some of the folks we think of as "middle class" might consider themselves to be struggling, while some of the folks that many of us would call "rich" think of themselves as middle class. All of which seems petty if you really ARE struggling.

Since I teach, and do so in the same school from which I graduated, I often get asked about my own high school experience. I always say that the very best course I ever took was a personal finance elective my senior year (because I was too dumb and lazy for calculus). I firmly believe that if people made better financial decisions, many of their money problems would be avoidable. Like talk-radio guy Dave Ramsey says, "personal finance is only 20% finance, it's 80% personal."

Tuesday, October 9, 2007

Greatest Movie Series Ever

Actual conversation from the house of Sal last night:

Me: "Son, why aren't you in bed like your mother told you to be?"

10-year-old son: "Dad, Rocky's on, and it's almost time for the fight."

Me: "Which Rocky?"

Son: "Rocky III. Mr. T."

Me: "Well, OK."

Let's face it--the "Rocky" series is a terribly important part of every young American boy's development. And thanks to channels like Spike TV (which last night had the whole 5-episode marathon on), some Rocky movie is on pretty much every week. Admittedly, Rocky V (Tommy Gunn) was pretty horrible, but it's still a decent action flick. For my money, there is something truly awesome about each of the other 4, plus the recent finale. I, II, and VI (Balboa) are all very good, well-made films. Don't forget that the original won the Oscar for best picture. III may be the most fun of all of them... and don't pretend that Mr. T. wasn't really cool in '83. He may be a caricature now, but when he made his debut in that movie, he was a MAN. And the cold-war showdown with steroidally-enhanced Ivan Drago and the training in Siberia sequence--that's just a great guy movie. The message of Rocky is priceless: if you train harder and are tough enough to take the pain, you can conquer enemies that are bigger and stronger than you. That's worth a few more minutes at bedtime.

So, how poor is poor?

If rich ain't that rich, how poor must one be to be "poor?" Let's stipulate from the outset that very, very few people in this country are poor by international standards--lacking basic housing and nutrition. And there is a pretty decent safety net for those people. Not perfect, mind you, but OK. A family of 4 is below the poverty line at around $20,000. No doubt, that's poor--but those guys will get medicaid, food stamps, subsidized housing--they'll never be well-off, but they won't starve. (We'll leave for another day why someone would have a family income that low if they actually go to work every day.) But what about the family making double, even triple the poverty line number: 40 to 60k? In my town, If you make $52,000 a year (that's $1000 a week), that'll come out to about $3500 spendable a month. That same family of 4 will pay $800-1100 for rent, or more like $1500 for a small house in this town. You'd think if you make over $50k you'd want to try to be a homeowner. One car payment, plus gas and insurance, and you're down to $1500 left. If you have to buy your own health plan, you can't do that and still feed a family of 4 on that. If your car is paid for, your company buys your health plan, you don't tithe, and you have bought your house back before the market went stupid, you can be pretty comfortable on $50k. But change just one or two of those variables, and the fridge is empty leading up to payday. And forget private schools or vacations. I know my family of 5 would have a very hard time making ends meet on that--and we're pretty frugal. And of course, that family qualifies for no help, even though they may have two earners scratching and clawing every week while the "welfare poor" family may have less than one full-time job. Fair, huh?

Now again, don't get me wrong--I'm not advocating that the family making $50k necessarily get welfare (after all, somebody has to pay for that). But it seems to me that we have a very skewed idea of what constitutes "middle class."

How rich is rich?

On a similar topic to the recent discussion of health insurance for the "poor" is this one: I'm in class a week ago and teaching my usual stuff, modern US history. I was talking about the Supreme Court and how John Roberts is the new (and youngest) chief justice, and how judges have a great gig because they serve for life. One of my students asks, "How much does being a Supreme Court Justice pay?" I answer, "about $175,000." Then comes the money quote, since it's from a 12-year-old who doesn't have any clue what things cost: "Is that a lot of money?" Good question. I teach in a private school that costs about $15k per year, and live in a town where the "average" house costs well over $200,000. On the one hand, I think of $175k as being darned good money... more than double what my family brings in with two people working full-time in what I think are pretty good jobs. On the other, if you made $175k, you'd be paying well over a third of that in taxes (fed, state, and FICA). Let's say you're a Christian and you tithe, as well. So when all is said and done, you'll have about $96k to budget, or about $8000 a month. Still good. But if you are the Chief Justice, you don't live in a 40-year-old ranch house with no working dishwasher like I do. A home that costs $400k in my town is no mansion--we're not talking deep water dock here. And that payment runs about $3000 all-told. And you don't drive a '93 Lumina, you and your wife drive late-model cars with payments. Maybe $1000 more total. Put two kids in my school at $2500 a month total, and suddenly you're down to $1500 a month to buy all your insurance, food, utilities, etc. That's tight. Of course, you don't have to live in as nice a house or drive the new cars or put the kids in private school. You don't even have to tithe. But you would expect the Chief Justice to live that well. Maybe not private-plane and yacht well, but definitely private school and nice SUV well. I'd even go so far as to suggest that there are some people in my town that make that kind of money (upwards of a hundred and a half) who don't live lavish lifestyles and feel the pinch sometimes. If you ask them if they are rich, they'll probably say, "no--middle class."

Now don't get me wrong--I'm not weeping for the poor guy making triple or quadruple the national average. But it takes a LOT of money to live like the "rich." And if you can struggle on $175,000, imagine a working couple where neither makes over $50k, but together they bring in $80-90,000. Again, that's double the national average. But pay taxes, health insurance, put a roof over your head, maybe buy a late-model car, and you're too strapped to send a kid to college without a loan, or to aggressively save for retirement. They might be in the top 25% of income earners, but they certainly aren't vacationing in the Bahamas.

I think the best definition most of us use for "rich" is "somebody who makes more than me." But I'll bet those of us who say that are thought of as pretty "rich" by somebody else.

Thursday, October 4, 2007

While I'm on the topic, the S-Chip veto

Just in time for my rant about insurance, President Bush has vetoed a measure that would have helped insure "millions of poor children." Called Schip (state children's health insurance program), it provides coverage, not for those below the poverty line (who get medicaid) but for those slightly above, who slip through the cracks. Now why would big, bad Bush want to hurt those poor, poor children? Well, for starters, the program was being increased to cover a family of four making over $60k a year (I've read some estimates that said up to $83k, the $60k is the very low-ball figure). Sorry, if you're making that, you don't need somebody else buying your insurance. Secondly, the program was designed to be "revenue neutral" (paid for) for about 5 years... and then the costs would skyrocket. But of course, government never ever retreats on a welfare program, so when the bill comes, we'd just have to hike taxes (or, more likely, run up the deficit). President Bush offered to sign a "plain vanilla" version of the bill that would continue the present program, or to even pledge more money for those kids who were closest to the poverty line. But the political theater was too good for that to ever happen. It's a bigger political winner to say "Bush kills program for poor kids." On my last post, Phillip asked why the GOP won't engage on this issue. Plain and simple, they are licked. A huge majority of Americans want the government to "give" them health insurance, and they want someone else to eventually pay for it. So long as the voters continue to believe in Santa Claus economics, no party suggesting anything resembling fiscal responsibility has a chance.

Tuesday, October 2, 2007

What's Wrong With "Health Care"

I had the opportunity to shoot the bull yesterday with my new boss. He's an upper-crust lib, and I'm a working-class conservative (how's that for shaking up the stereotypes?). Yet we agreed on one thing, at least in principle: SOMETHING ought to change about "health care." I know it's supposed to be verboten for a conservative to mention anything other than free-market answers to health care reform, but I'm at the end of my rope with the current system.

First, some diagnosis. Don't tell me that "47 million Americans don't have health care." There may be 47 million who don't have a health insurance policy, but there's nobody who can't go to an emergency room and get treated. The trick is, what they do in the ER isn't free (news flash--nothing is). So the costs of treating those who can't, or won't, buy insurance is passed along to those who do, and that makes health insurance much more expensive. Indeed, many of the people who don't have health insurance are not the very poor (who have medicaid). It's the non-poor who find the cost of what's out there prohibitive.

Another thing that makes health insurance crazily expensive is the fact that it's not REALLY insurance, at all. Insurance is sharing the risk of a potential catastrophe. Your house is likely NOT going to burn down. But some small percentage of houses will. If we divide the risk of that happening among the right number of houses, as determined by the actuaries with slide-rules, and add a few bucks to each bill to provide profit to the insurance company and the agent who services the policy, that amounts to a genuine insurance policy. You hope you never have a claim, but the relatively small premium is a smart thing to pay. But if a house were already burning, that would jack the premium up to the cost of the house! Likewise health insurance. You can insure against hospitalization, serious injury, cancer, or a variety of other relatively unlikely events. But when we demand that every physical, well-child-checkup, and tylenol be paid for through our insurance, the company is going to have to charge us for all of that guaranteed cost ON TOP of the shared risk of the unexpected.

Then there's the role played by employers. My employer pays for my insurance (I have to pay for dependents). If I were single, I wouldn't have any incentive to care what it cost them. So I'm free to demand a cadillac plan. Of course, if you think about it, whatever your employer pays for health insurance could go straight to your salary if they made you buy it yourself. So it still affects my bottom line. But most of us with company benefits persist in the illusion that our health care costs are cheap or free.

On the other hand, those who buy their own policy (or have to pay through the nose for dependent coverage) have to make a decision based on opportunity cost. Paying several hundred to a thousand or more dollars a month for insurance directly impacts where you can live, what you can drive, how much you can spend on gas and groceries. For the healthy person, it's arguably smarter to pay your own way at the doc-in-the-box for routine stuff and take your chances on the more rare losses, knowing that no hospital is going to let you die anyway.

So, what to do about all of that? I think the biggest trick is to see to it that everybody has (and pays at least something for) a major medical plan with a high deductible, sort of like the "minimum limits" on your car policy. I don't care if this is done privately or publicly in the long run, or in combination somehow. But expanding the pool of the minimally insured is a good start. This can't be a cadillac policy--I envision something similar to the plans that go with the current HSA accounts--maybe $2500 deductible, 100% thereafter. If everybody had this, the larger pool would mean pretty low costs relative to what we have now. Care under such a plan would be somewhat rationed, in the sense that these things would likely not pay for Lasik and boob jobs. But lack of access to a 38DD is not a health care crisis. And besides, what we have now is rationed--a buddy of mine who pays a gazillion dollars a month for blue cross just found out his plan won't cover lap band weight loss surgery.

Of course, what to do about first-dollar care is the hard part. Here's a novel idea: how about pay your own way? Sure, if you'd like to pay somebody $500 a month so they can dole $5000 in annual costs back to you for low copays and still make a profit, I'm sure somebody will oblige you. But if you didn't have to pay the $500, you could pay a little a couple of times a year for a medical exam, or a doc visit, or a prescription. If you hit your deductible, it would be covered by the major medical plan. What a thought--people might even choose less-expensive options than they now do if it actually hit them in the pocketbook!

Perfect? No. Full of details? Not so much, but neither is Hillarycare 2.0. Discuss amongst yourselves and comment.