“I just lost my job, and after a lot of late nights and panicked budget making, we think we can get along on just my husband’s income, but it will be very tough and there will be no money at all for extras of any kind. We’ve always used our discretionary income to support things we care about – in the last few years this was local farmers and craftspeople, and making ethical choices when we shopped. Now I feel like I don’t have the luxury anymore – I know a lot of things that I can do to save money will be environmentally sound as well – turning down the heat, cutting back on the lights, buying more used items, but I hate to go back to choosing the supermarket for food and Toys R’Us for gifts because they are cheaper, but they often are. Do you have any suggestions for frugal sustainable shopping?”

This is a great and timely question, and I do have answers, but unfortunately, I’m head down in the last bit of my book and don’t have time to respond right now. Thus, I pass it on to you, my readers. How do you balance the need to save money with making good and ethical consumer choices that support things that are important to you? What do you suggest to Gwen?

Thanks everyone!

These “hidden” costs of health care — like taking time off to care for elderly parents — add up to $363 billion, according to a report from the Deloitte Center for Health Solutions, a research group.

hat amounts to $1,355 per consumer, on top of the $8,000 the government says people spend on doctor fees and hospital care.

“We’re surprised that this number came in so high. It’s significant,” said Paul Keckley, executive director with the group.

The out-of-pocket costs that the government tallies usually include only insurance-related costs like premiums, deductibles, and co-payments.

Keckley said the study is the first to estimate how much consumers dish out on health care related goods and services not covered by private or government insurance.

These include: ambulance services, alternative medicines, nutritional products and vitamins, weight-loss centers and supervisory care of elderly family members.

“These costs can add up to billions of dollars, even eclipsing housing as a household expense,” said Keckley.

The study found that more than half of those costs were the cost of caregiving in lost wages.  This is a number we can only expect to see rise radically.  Many states have already cut aide and home health care support, assisted living kicks you out as soon as your income runs out, disability housing and services for the disabled are among the first convenient targets when budgets get tight, and the state funded nursing homes are both closing and becoming increasingly dire.  Add to that an aging population, and the outcomes are predictable.  The only alternative is for people to do caregiving at home – and at considerable cost in both wages and personal terms.  For those unlucky enough to have no one to take care of them, the outcomes are worse.

This is something I know something about – I worked for many years in elder care and hospices, then cared for Eric’s grandparents in our home, and eventually I will be my oldest son’s caregiver, since he is unlikely to ever live independently.  We are also guardians for our disabled niece whose mother is a generation older than I and who will also probably never live independently.  Giving care is something I expect to be doing for a long time.  I’m very comfortable with that part of my life, but I don’t claim it will be easy or that the costs will be easy to bear.

The hard reality is that a lot of people will have to come out of the workforce in order to do the work of caring for children, the disabled and the elderly.  The good/bad news is that a lot of people are coming out of the workforce, of course, but their obligation is to look for work full time – which pretty much precludes taking care of Grandma, your brother who is a war amputee or any children who need it.

Apparently many economists were surprised by the high cost of caregiving, of transporting the ill too and fro, of all the attempts to find alternatives and to soften side effects that go will illness and disability, aging and ordinary childhood health costs.  Anyone who lives them is not.  The reason these are surprising to some people is that they are “housewifized” out of existance – our society doesn’t recognize the value of caregiving except when it is professionalized and industrialized.  It erases domestic and family support, implies they are valueless and best undertaken in professional settings.  Then, when the money isn’t there or the professional settings are unhealthy, we pretend that this is not “real” work.

The shifting of nearly everyone into the industrial, formal economy resulted in the radical impoverishing of the informal economy – an impoverishment that must be reversed if outcomes are to be better than worst.

Sharon

“‘Economy’ is simply the Greek word for ‘housekeeping’. Remembering this is a useful way of getting things in proportion, so that we don’t lose sight of the fact that economics is primarily about the decisions we make so as to create a habitat that we can actually live in. We are still haunted by the dogma that the economic world, ‘economic realities’, economic motivations and so on belong in a completely different frame of reference from the sort of human decisions we usually make and from considerations of how we build a place to live. And to speak about building a place to live, a habitat, reminds us too that we look for an environment that is stable, ‘sustainable’ in the popular jargon, a home that we can reasonably expect will be an asset for the next generation.

Economics understood in abstraction from all this is not just an academic error: it actually dismantles the walls of the home. Appealing to the market as an independent authority, unconnected with human decisions about ‘housekeeping’, has meant in many contexts over the last few decades a ruinous legacy for heavily indebted countries, large-scale and costly social disruption even in developed economies; and, most recently, the extraordinary phenomena of a financial trading world in which the marketing of toxic debt became the driver of money-making – until the bluffs were all called at the same time.

If we are not to be caught indefinitely in a trap we have designed for ourselves, we have to ask what an economy would look like if it were genuinely focused on making and sustaining a home – a social environment that offered security for citizens, including those who could not contribute in obvious ways to productive and profit-making business, an environment in which we felt free to forego the tempting fantasies of unlimited growth in exchange for the knowledge that we could hand on to our children and grandchildren a world, a social and material nexus of relations that would go on nourishing proper three-dimensional human beings – people whose family bonds, imaginative lives and capacity for mutual understanding and sympathy were regarded as every bit as important as their material prosperity.”

And

“Earlier I mentioned the work of Kenny Tang. At the end of his wide-ranging recent book (pp.137-60), he sketches four scenarios for the second half of the twenty first century, varying from a ‘golden age’ picture in which economic stability offers a secure background for sustaining the planet’s assets, through a model in which good intentions for sustainable and ethical behaviour in respect of the environment are undermined by boom and bust cycles in the economy, a more serious model in which patterns of consumption do not basically change, so that we face ‘resource wars’ over our finite supplies, and finally a nightmare scenario of a planet that has become a jigsaw of ‘protectionist nation-states’, where each state both refuses to challenge its aspirations for material growth and helps to inflate commodity prices worldwide by protectionist strategies.

What is most sobering about Tang’s fourth model is that so much of it reads like a description of what is already happening in many quarters and what some of the rhetoric of the wealthy world seems to take for granted. And what his analysis points up is a message that can be derived from any of the economic forecasters I have quoted: without a stable economy, the rest is idle dreaming. And a stable economy depends on our willingness to question the imperatives of unchecked growth – which in turn is a moral and cultural matter. The energy for resistance has to come from the sort of stubborn moral and cultural commitment to humane virtue that I have been speaking about.

I realise that the word ‘virtue’ is hard for many to take seriously. But it’s high time we reclaimed it. We have no other way of talking about the solid qualities of human behaviour that make us more than reactive and self-protective – the qualities of courage, intelligent and generous foresight, self-critical awareness and concern for balanced universal welfare which, under other names, have been part of the vocabulary of European ethics for two and half thousand years: fortitude, prudence, temperance and justice. In the Christian world, of course, they have been supplemented by, and grounded in, the virtues of faith, hope and love that, in their full meaning, are bound up with relation to God. But there has always been a recognition that the four pillars of ordinary human virtue were not a matter of special revelation but the raw materials for any kind of co-operative and just society. Without courage and careful good sense, the capacity to put your own desires into perspective and the concern that all should share in what is recognised as good and lifegiving, there is no stable world, no home to live in – no house to keep.”

The combination of graceful prose and intellectual clarity is just lovely.

Sharon

Two of her rules:

“3. Never engage in any luxury activity at all, ever. Remember, you are currently taking public aid, which means of course that you must never, ever, find any way to enjoy your life that costs any amount of money at all. Do not ever do any of the following: go to movies, rent movies, go to the theatre, go to a restaurant, take your children to amusement/skating/other fun activities, or anything else that might cost money. You are poor–you don’t deserve a moment’s enjoyment of life. If you did deserve it, you wouldn’t be poor, right?

4. Never possess any item which could be construed as you spending money. This rule is a bit confusing, so examples might serve well here: do not let your SIL give you a manicure for your birthday, or fix your hair in any fancy way. Do not dress in business clothes, even purchased secondhand. Do not borrow your parents/in-laws nice car to go to run errands. Never dress your children in the expensive clothing purchased for them as gifts by loving relatives. Do not use public aid to buy your child a birthday cake and soda, which was the only thing they asked for for their birthday. Obviously, if an upstanding, tax-paying citizen sees you in a grocery store with nicely done nails & hair, driving a nice car, and buying a cake and soda, they are entitled to decry loudly (and post everywhere possible online) how abusive you are being of the system. Just because they have no idea how or why you have these things is no excuse–it is your responsibility as a poor person to never make taxpayers have to think about, well, much of anything.

You really do need to read the whole thing – she brilliantly articulates the way that our society punishes you for becoming poor.

Sharon

Yes, I know the problems of the rich are pale in comparison to the poor, but what I think is enlightening about this is the degree that even those who seem most insulated are involved, and unable to fully hide.  Yes, some of them are self-centered and greedy, and apparently too dim to grasp that when you run out of money, you should give up your gym and expensive haircuts and upper east side apartment, rather than taking out loans for an MA.  But then, that’s something we’ve encouraged over the years – the rich aren’t brighter than average, just richer.  And the very fact that the things that have worked for so long no longer do is worth looking at.

As a society, we’re keeping up appearances hard – we’re keeping up the mythos that things aren’t that bad, keeping up the idea that we can go back to what it was.  Here is a fascinating look under one layer of the appearances.

It is definitely worth a watch:  http://www.pbs.org/wgbh/pages/frontline/closetohome/view/?utm_campaign=homepage&utm_medium=proglist&utm_source=proglist

You’re sittin’ down and wonderin’ what it’s all about
You ain’t got no money, they will put you out
Why don’t you do right, like some other men do?
Get out of here and get me some money too

If you had prepared twenty years ago
You wouldn’t be a-wanderin’ from door to door
Why don’t you do right, like some other men do?
Get out of here and get me some money too. – Peggy Lee

 The Dow broke 10,000 again today, and my favorite source of humor news, CNBC, has a range of headlines to make sure that somehow, at some level, they will be right sometime about something.  “October Crash Still on the Way: CEO” and “Dow at 11,000 to 11,500 by Christmas: Market Expert.”  The front story “Stock Market Rally Likely to Continue, but Hedge Your Portfolio:Pros.”  Hmmm… are these the same pros that think an October Crash is on the way or the ones that think that the Dow will be at 11,500?   Must be different pros – the good news is we’ve got a lot of them, and since they all completely missed the mark on the present situation, all of their guesses are equally good!  Yay!

Now my guesses couldn’t possibly be worse than the vast majority of financial advisors, but I make no claim they are better. I  don’t have the slightest idea where the Dow will be by Christmas.

What I do know is this – we still won’t have gotten anything meaningful to most Americans out of 14 Trillion plus in bailouts.  Stock market rallies look good – but they don’t actually help most of us all that much.  Unless they are sustained, those who rely on investments for income don’t get much out of it – and the fundamentals of our economy are deeply unstable - there’s nothing there to sustain a rally when we inevitably stop pouring in funds.  With the exception of a few people who can sell out now in the next few months, this rally isn’t likely to mean much for your long term economic well-being.  Most of us don’t profit from a rally in any deep or immediate way.

This rally, however, is what you bought.  That and a good bunch of road work.  And money for people who happened to have bought giant low mileage cars and wanted to change over.  To me it looks a lot like some rich fool  saying to me “I bought this awesome RV, and a jet ski…I didn’t pay the mortgage or the health insurance, and hey, there’s no food, but lookee at my jet ski.”  Sigh.

Back in December, when I made my annual predictions, I bet that things would go back to normal for a while, and so they have.  It is certainly possible that normal will extend out longer than I’d expected.  The problem, of course, is that “longer than I expected” is not the same as “for a really long time.”  At some point there won’t be enough money to pour into the system anymore – we’re getting awfully close to that point.  At some point we have to pay for the Jet Ski, or start watching out the window for the repo man.  At some point we start singing like Peggy Lee, lamenting what once was, “You had plenty money 1922, you let other women make a fool of you…”  Our turn as the world’s momentarily rich fool may not be over yet, but sooner or later, you got to do right.  And then we’re in trouble.

Sharon

I find myself fascinated by the insistence of the media that things are getting better – it is true that the stock market is up, and that the rate of job losses has declined slightly (although not nearly as much, we learn, as the reports suggest), but the idea that not losing quite so many jobs constitutes recovery is sort of fascinating.  The definition of “a good sign” or an indication of “recovery” keeps changing, and getting lower. 

Meanwhile, at the practical “affects how you actually live” level, things are getting worse.  Deflation seems to have taken full hold, state budget receipts are falling, leaving deficits that state constitutions don’t permit, and services for those most in need are falling.  The big question is how long the nation can borrow from the future to keep things going.

So what does this look like through your eyes?  Are things getting better?  Worse?  How about for your community?

Sharon

 It is common to claim that last year, the economic crisis at Lehman Bros. nearly brought down the US economy.  The crisis at Fannie and Freddie is likely to be much more dramatic than that, and Ilargi does a really good job of explaining why today – it is worth a read.   If you think things have stabilized, seriously, think again.  http://theautomaticearth.blogspot.com/2009/09/september-9-2009-crime-that-will.html

Sharon

 In order to believe this you must also believe several things:

  1.  There are no more shocks coming, since, after all, we’re still pretty shaky.  This requires that you pay no attention whatsoever to things like the state of Fannie Mae and Freddie Mac.  2. That a short term recovery now is a recovery indeed. This requires you pay no attention to things depressing consumer spending, like still rising unemployment and increasing debt. 3. That you believe that the government stimulus is not just buying us a cheap jump, but actually stimulating a sustained and sustainable level of economic growth – that is, that we’re going to keep buying cars after cash for clunkers runs out of money, or that we’re going to keep buying houses after we stop paying people to do so.  4. That none of the pipers are going to have to be paid soon. And finally it requires you believe that all the news is realy as good as it seems.  I don’t, and I honestly don’t see how it is possible.

 Here’s just one point, on the recent job numbers that have everyone cheering:

 http://blogs.reuters.com/rolfe-winkler/2009/08/08/beware-the-jobs-number/

 Recovery?!  My Aunt Fanny!

 Sharon

“Rumor No. 5: Goldman Sachs is “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Those words are of course taken from a recent issue of Rolling Stone magazine and they are transparently false.

For starters, the vampire squid doesn’t feed on human flesh. Ergo, no vampire squid would ever wrap itself around the face of humanity, except by accident. And nothing that happens at Goldman Sachs — nothing that Goldman Sachs thinks, nothing that Goldman Sachs feels, nothing that Goldman Sachs does –ever happens by accident.”

The best I could muster way back in October was a vision of Paulson and Bernanke, in preparation for erotic release, drinking and singing “And no one’s getting fat except Goldman Sachs.”  I swear, I was trying to be funny, not making serious predictions.  Uh-oh.

 Sharon