Monday, June 29, 2009

The death sentence for Bernie Madoff...

71-year-old Bernie Madoff was just sentenced to 150 years in prison.

For all of us, a sentence like that is a death sentence. He will not, of course, be put to death by the state, but if all goes to plan, if he is not paroled in an inexcusably short period - say like in 18 months - or five years or - in a decade - he will die in prison.

Madoff had been stealing money from people for more than two decades. Only instead of robbing banks, in the public and flamboyant way of a Dillinger, Madoff worked his criminality in secret.

He stole billions by offering the lure of easy money to his investors. The great dream of America. Money for next to nothing.

He was an equal-opportunity rip-off artist, stealing from millionaires and the middle class and also from Holocaust victims.

His investment advice ruined many couples who dreamed of an easy retirement. For some of the investors who believed Madoff's promises, their retirement now consists of working multiple jobs, living hand-to-mouth, far removed from the life on Easy Street that Madoff had dangled in front of them.

Madoff's lawyer, Ira Lee Sorkin, called this sentence absurd. "Vengeance is not the goal of punishment," he's quoted as saying in today's NY Times article.

Some of Madoff's victims hope this sentence will be a deterrent for future white collar criminals. But if Madoff is the only person called to task for the destruction of middle class retirement funds seen as a result of the crash of 2008, I think we'll see a swift return to "business as usual" in the financial community.

And "business as usual" on Wall Street enabled a master swindler like Madoff to steal for decades... and somehow created an environment where no one is accountable for the mountain of toxic assets that towers over Wall Street today.

Friday, June 26, 2009

More required reading by Atul Gawande....

Atul Gawande wrote one of the most talked-about stories on health care - his story on the over-use of medicine in McAllen, Texas.

(You can find it here.)

I sent off a bunch of my questions to him and received a thoughtful response from him not long after. His comments on why he selected Medicare costs to develop "the baseline scenario" are instructive:

"We do need broader data than medicare but there are so many fragmented private insurers one cannot gather easily a comprehensive picture of the US practice patterns."

That is a key issue, in my view. A major roadblock to real reform, in fact. We are setting out on a tumultuous journey to control costs in medicine, but because of the fragmented nature of the private sector, it is impossible to gain this "comprehensive picture of the US practice patterns."

There is a problem using Medicare as the example of the cost conundrum. Medicare pays at a lower rate than private insurers pay. There are doctors who will not accept Medicare patients because it is not cost-effective for them to do so. I wonder how much of McAllen's over-use of medicine is common to practices with a high volume of Medicare patients - they order more tests specifically to bring in more money to augment the lower reimbursement rates they get from Medicare.

Would they feel the same economic interest in tests if they were paid at the higher private practice rates? Is medical over-use like that found in McAllen as frequently found in practices with minimal contact with Medicare patients?

We don't know - private insurers are too fragmented to get a handle on their practice patterns.

Or to fully understand why healthcare costs what it costs.

When we start talking about the public option - the price and cost of care is a vital consideration - is the pricing for a public option going to attract the best docs? Or will it repel them, as you see today under Medicare and also under the current HMO model.

(In my experience as an HMO patient, the best docs and hospitals refused many HMOs - it was not worth it to them to see patients who paid significantly lower prices for the visits when they could very successful pack their practices with the higher paying PPO patients.)

Will the exchange plan being hyped by the Obama administration bring relief to the self-insured and uninsurable - or just another layer of admin fees added onto a system already breaking under the weight of administrative fees?

Dr. Gawande also pointed me to a speech he gave this month to the graduates of the University of Chicago medical school.

This should be required reading alongside of his McAllen article.

In this speech, he talks about what we can do right now to start reforming our system.

So what does he talk about in his speech?

Positive Deviants....

In his speech to med students about to enter the world of medicine, he points to the "positive deviants" as examples to follow. The people who somehow have never forgotten the real reasons why they went into medicine in the first place, to heal and treat people.

He opens his speech with a story about a friend, a professor of nutrition who was heavily involved in reducing hunger and starvation in third world communities. And when working for a program that was "starved for money," this professor began to focus on who within a particular village had the best-nourished children. They discovered simple, affordable solutions that were already implemented by some families - the ones with the best nourished children. When other villagers began following the examples of the "positive deviants" within their community, "malnutrition dropped sixty-five to eighty-five percent in every village."

Gawande continues:

"I tell you this story because we are now that village. Our country is in trouble. We are in the midst of an economic meltdown like nothing we’ve seen in more than half a century. The unemployment rate has passed nine per cent. For young people ages twenty-five to thirty-four, the rate is approaching eleven per cent. Our auto industry has filed for bankruptcy. Our housing and finance industries are shadows of their former selves. Our state and local governments are laying off teachers and municipal workers.

It is worth reflecting on how extraordinarily lucky we who are doctors, or doctors-to-momentarily-be, are. Consider the contrast between what every other graduation ceremony taking place today must feel like—the graduation ceremonies for the undergraduates, the business-school students, the law-school students, the architects, the teachers—and what ours does. There are thousands graduating proudly today but fearing for their future. Many have no jobs, no sense of how they’ll make it.

We doctors meanwhile remain with no significant unemployment. Virtually all of us can find gratifying and well-compensated work in our chosen fields, and that is remarkable. It is something to be deeply thankful for.

Yet the idea that we can proceed oblivious to the economic conditions around us is folly. In fact, it is not just folly. It is dangerous.

Job losses and cutbacks have produced an unprecedented increase in the uninsured. Half of hospitals were already operating at a loss before the economy tanked, and the rise in patients who cannot pay their medical bills have since pushed many into insolvency. Hospital closures and layoffs have started, as you know all too well in Chicago. We will be affected by what is going on in our country.

More than that, though, we in medicine have partly contributed to these troubles. Our country’s health care is by far the most expensive in the world. It now consumes more than one of every six dollars we earn. The financial burden has damaged the global competitiveness of American businesses and bankrupted millions of families, even those with insurance. It’s also devouring our government at every level—squeezing out investments in education, our infrastructure, energy development, our future."

"We are now that village..." he told the med students.

And all of us share the burden of responsibility. Patients need to take better care of their health. Patients need to push doctors to fully explain the benefits and costs of certain treatments.

Doctors need to responsibly use the vast array of treatment, technology and services we have available to us today.

We are all that village - and we are all responsible.

He ends his speech with some advice to the new docs:

"No one talks to you about money in medical school, or how decisions are really made. That may be because we’ve not thought carefully about what we really believe about money and how decisions should be made. But as you look across the spectrum of health care in the United States—across the almost threefold difference in the costs of care—you come to realize that we are witnessing a battle for the soul of American medicine. And as you become doctors today, I want you to know that you are our hope for how this battle will play out.

As you head into training and then further onward into practice, you will be allowed into people’s lives in a way that no one else in society is permitted. You will see amazing things. And you will develop extraordinary abilities.

Along the way, you will sometimes feel worn down and your cynicism taking over. But resist. Look for those in your community who are making health care better, safer, and less costly. Pay attention to them. Learn how they do it. And join with them.

If you serve the needs of your patients, if you work to ensure that both overtreatment and undertreatment are avoided, you will save your patients. You will also save our country. You are our hope. We thank you."

Read Gawande's speech. Watch the positive deviants in action.

Absorb their positive behaviors as your own. It's our best and brightest hope.

Monday, June 22, 2009

The Mysterious Madness of Medical Billing...

I am a rebel, I suppose, a van-driving soccer mom of a rebel - one who works as a freelancer, who married a freelancer.

We work out of our basement, I as a writer, my husband as a photographer. We love what we do - we love the clients we have the good fortune to work with - we love the fact our careers make us more available (sort of) to our children.

The price for our rebellion against the corporate way of working is that we must buy our own health insurance plan for our family. We pay $600 a month for a the privilege of paying for the first $4000 in medical costs. It's a major medical crash and burn plan.

It's what we can afford.

We are healthy. We see the doctors primarily for annual check ups. Occasionally, a child has an illness that requires us to head over to the doctor.

Otherwise, we see little of the medical establishment.

My twins had their five-year-old check up recently. Required for school, as are eye exams (not sure of cost yet) and dental exams ($350 to cover both girls!)

(For the self-insured, it is quite pricey to gain access to public school for your children.)

Anyway, I got the bill for their check up. One thing we liked about our crash and burn plan is that it pays out $300 per child for annual checkups. One would think - at least I had been thinking - that $300 would be PLENTY for an annual check for a healthy child.

Silly assumption! $300 no where near covers the cost of a well child checkup any more. The doc's office billed the insurance company $508 per child. They wrote off almost $200 per child. And billed us $100 to cover the rest of the charges. ($100 may not sound like much, but when you pay $600 a month and you think that the well child visit is covered in the insurance plan - it's too much.)

$508 for a well child annual checkup. And double that for twins. That's right, the doc's office billed the insurance company more than $1000 to survey the health of my two five-year-olds. (A thousand dollars for a visit that lasted a lot less than one hour to cover both girls.)

Here's the breakdown of costs per each child:

-$79 for a polio vaccine
-$159 for the chicken pox vaccine
-$172 for the visit with the ped
-$37 to check out their development (strange how that's in addition to the visit)
-$39 administrative fee to administer the first vaccine
-$22 to administer the second vaccine.

So I wonder, as I look at the bill, just what the $172 cost for the visit covers. Certainly it's not for the developmental assessment one might think would be included as part of an exam of this nature. And certainly it does not cover the extra work (!) needed to administer federally mandated vaccines....

And I wonder how a healthy child's annual visit can cost more than $500 for about 20 minutes of the doc's time. (x 2 = $1000!!! I'm stunned by that figure!)

Then my son got sick with a wrenching cough that lingered for a good long while, long enough to warrant a trip to the ped's.

She tested him for whooping cough, something he'd been vaccinated against. Later, she let us know that it was a long shot, that he had whooping cough, but felt a test was in order. She also ordered an antibiotic for us, just in case the test came back positive. Otherwise, if it was negative, it was viral and the antibiotic would not make a difference. (We chose not to pick up the antibiotic, because the test came back negative; it was viral; the antibiotic was useless against this illness.)

Let's not even think about the doc's visit. Let's just look at the bill for the test. The lab charged $357 for the test.

$357 to test my son for a bacterial infection he'd been vaccinated for.

The lab wrote off more than $300.

My portion of the bill (as someone with a $4000 deductible, remember, it all comes out of my pocket at first) is $53.76.

And I look at THIS bill and realize that pricing in health care is something people dreamily create up as they look at their little spread sheets. They put numbers on a page, create magical equations - and voila! The cost of the procedure is really nowhere near what they bill for it.

But let's put out some arbitrary numbers just to make people feel like their getting a deal. Or to satisfy some kind of numerical game devised by the bean counters.

As a consumer of healthcare, I'm not getting a deal. I'm getting the shaft. And I'm really sick of it.

The Surrealistic Quality of the Recovery....

"It's surreal out here," said a soccer dad to my husband at our village fair this weekend. The soccer dad works in print advertising, so you can imagine the surreality of his existence. He had to lay off seven people last week - and is concerned about the longevity of his own position.

One neighbor we know just laid off two people in his department. It sickened him to do so - he himself had been a victim of downsizing a few years ago and knows how it wreaks havoc on the soul, the psyche and the bankbook.

A Cub Scout dad we know used Facebook to post his "success story" in temporarily keeping his job, which was to be terminated right around the end of the school year. His corporation, despite the leadership of a man now being paid more than $10 mil a year, is on very shaky ground and may not be around much longer.

Downstate, things aren't much better.

A neighbor of my in-laws, a developer, is in bankruptcy right now. Another person they know confessed he'll likely be "terminated" soon from his job at a training company. Training people to excel on the job is an unaffordable luxury for many companies in this environment.

A story in today's Washington Post expresses many of the concerns felt by millions outside of Washington and Wall Street:

"Since the recession took hold in December 2007, the U.S. economy has lost 5.7 million jobs, a rapid decline that caught administration and other economists off guard. In recent months, the velocity of job losses has slowed substantially, which, combined with a rising stock market and increases in consumer spending, has offered hope that a recovery is beginning to take hold.

But employers still cut 345,000 jobs last month, while the nation's growing working-age population requires the job market to expand by 125,000 to 150,000 a month just to keep the unemployment rate stable.

The dynamics of the modern economy further dim the employment picture. Job growth was weak for years after the past two recessions, in 1991 and 2001. Employers have grown increasingly slow to rehire workers, and steady advances in technology have allowed businesses to do more with fewer workers."

Right now, the unemployment rate is 9.4 percent, and has surpassed the "adverse scenario" used in the Fed's stress tests.

What does this mean for our heralded recovery? Will banks deemed healthy when unemployment was estimated at 8.8 percent remain healthy with unemployment inching closer to 10 percent? Doubt it. I doubt it.

The startling unemployment figures do not bring confidence to consumers. And as everyone knows, the illusion of confidence is as important as confidence itself. With an economy that relies heavily on consumer spending (70 percent!), the surreality of the nation's unemployment is a very grave threat to the recovery.

Sunday, June 21, 2009

On health care in McAllen...

It is supposedly "required reading" in the Obama White House - and many of the blogs I read point to it as "the" source for answers on the health care crisis in America.

It's Atul Gawande's story on the "cost conundrum" of providing medical treatment in McAllen Texas, which appeared in the June edition of The New Yorker magazine.

Tonight, I finally had the chance to read the story. And it left me with more questions than answers.

Gawande points to McAllen as what’s wrong with American medicine today, but takes pains to point out that McAllen is actually the second most expensive health care market in America – coming in behind Miami.

So why is McAllen – the “outlier” – actually proof of what is wrong? It is an extreme example of the problem, not necessarily a reflection of the ordinary, every day “average” world of the garden variety medical practitioner.

Gawande compares McAllen to El Paso – in that they have similar demographics (poverty level, obesity rates, etc.) and though El Paso’s health care costs are half that of McAllen’s – the story focuses on McAllen, as if that is the “norm.”

What I want to know after reading this story is how much El Paso’s costs have gone up in the last few years. (My health insurance rates – despite no change in family health – went up 25 percent this year – and I’m no where near McAllen.) El Paso seems to have a handle on controlling excessive tests – but how much have their actual costs risen in the last decade? Are higher costs only associated with the "overuse" of tests?

In comparing McAllen to Mayo, I wanted to know what the obesity and poverty rates were for the patient pool at Mayo. Are we comparing apples to apples? The health care issues for the obese are a terrible problem. Is Mayo dealing with the same issues or are they more focused on cancer treatment – or knee replacement surgery – or heart surgery in thin, pre-retired people?

As McAllen goes, so goes the rest of the health care industry in the US? Seems a stretch – but perhaps Gawande is right to assume this. Would like to see the facts to back up the assumption, though.

Why is Medicare – the government program for retirees – the best source of pricing information for health care? If that is truly so – then we are negotiating health care reform from a position of ignorance. Truly. And that needs to change immediately.

To point to McAllen’s “overuse of medicine” in the second most expensive health care market in the country – within a community with a significantly high obesity rate and a per capita income of $12,000 a year – as THE example of the problems of health care in America is like looking at the Super Size me guy (the one who ate at McDonalds every meal for way too long for his documentary) as the poster child for the American diet. Great PR – but not necessarily providing the right icon for the issue.

I’d frankly like to know more about El Paso’s story….

Wednesday, June 17, 2009

Motor City Madness...

Seems if you want to open a store in Detroit these days, you really are a "fool for the city." According to a story in the WSJ, retailers are fleeing the Motor City as if inspired by the V8 engine, fast and furious.

Just four Starbucks remain within the city limits. (In my little Chicago suburb of 20,000, we have nearly that many 'Bucks to visit.) The affordable luxuries that bring happiness to so many appear beyond the reach of most Detroit residents.

I went to Detroit once, about 15 years ago. One of my friends had grown up in Detroit (the city proper, not an affluent suburb on the ring of it) and her mother was moving out of the family house. Back then, in the early 1990s, it had sold, this little house in Detroit, for about $5,000.

You couldn't get a Chrysler for that price in those days. I'm sure there were houses in Bloomfield Hills where you couldn't get a door for that price....

The house was on a block that had "changed" about 20 years earlier. White flight. My friend's mom was one of the last whites on the block (perhaps even the last.) A couple of the other homes were owned by the people who lived in them - you could tell which ones because their lawns were neatly manicured, houses were painted, they bore all the right signs of ownership - they appeared loved and cared for.

The other homes were rented out. Lawns were covered in weeds, grass was high, paint was peeling, the heavy security bars on doors and windows were black and ominous. Cars parked out front had bullet holes in the windows.

We drove into the city center, past dead neighborhoods, past boarded up houses. The art museum seemed surrounded by devastation. We saw hardly anyone on the streets.

Coming from Chicago, a thriving, bustling city, I was shocked at the poverty, shocked at the deterioration of what had once been a vital city center. Yes, there is poverty in Chicago, but alongside of poverty you'll also find lively neighborhoods, children playing outside, people walking, talking, living.

Oh yes, and lots of Starbucks coffee shops. And grocery stores and gourmet retail shops.

In Detroit today, the unemployment rate is 22.8 percent. National grocery chains have looked elsewhere for business. Not one national grocery chain has a store in the city, according to the WSJ.

Green shoots are so remote a possibility in this city, it's as if Detroit inhabits a different galaxy, breathing a different kind of air, the kind not suited for growth and greenery.

Can a city where 30 percent of its residents are on food stamps ever rebound? I'm not sure anyone has the answer to that question....

Here's the Wall Street Journal story in full:

JUNE 16, 2009
Retailers Head for Exits in Detroit
Shopping Becomes a Challenge as Auto-Industry Collapse Adds to City's Woes

DETROIT -- They call this the Motor City, but you have to leave town to buy a Chrysler or a Jeep.

Borders Inc. was founded 40 miles away, but the only one of the chain's bookstores here closed this month. And Starbucks Corp., famous for saturating U.S. cities with its storefronts, has only four left in this city of 900,000 after closures last summer.

There was a time early in the decade when downtown Detroit was sprouting new cafes and shops, and residents began to nurture hopes of a rebound. But lately, they are finding it increasingly tough to buy groceries or get a cup of fresh-roast coffee as the 11th largest U.S. city struggles with the recession and the auto-industry crisis.

No national grocery chain operates a store here. A lack of outlets that sell fresh produce and meat has led the United Food and Commercial Workers union and a community group to think about building a grocery store of its own.

One of the few remaining bookstores is the massive used-book outlet John K. King has operated out of an abandoned glove factory since 1983. But Mr. King is considering moving his operations to the suburbs.

Last week, Lochmoor Chrysler Jeep on Detroit's East Side stopped selling Chrysler products, one of the 789 franchises Chrysler Group LLC is dropping from its retail network. It was Detroit's last Chrysler Jeep store.

"The lack of retail is one of the biggest challenges the city faces," said James Bieri, president of Bieri Co., a Detroit-based real-estate brokerage. "Trying to understand how to get it to come back will be one of the most important keys to its resurgence -- if it ever has one."

Detroit's woes are largely rooted in the collapse of the auto industry. General Motors Corp., one of downtown's largest employers and the last of the Big Three auto makers with its headquarters here, has drastically cut white-collar workers and been offered incentives to move to the suburbs. Other local businesses that serviced the auto maker, from ad agencies and accounting firms to newsstands and shoe-shine outlets, also have been hurt.

The city's 22.8% unemployment rate is among the highest in the U.S.; 30% of residents are on food stamps.

"As the city loses so much, the tax base shrinks and the city has to cut back services," said Margaret Dewar, a professor of urban planning at the University of Michigan. That causes such hassles for retailers as longer police-response times, as well as less-frequent snow plowing and trash pickup.

While all of southeast Michigan is hurting because of the auto-industry's troubles, Detroit's problems are compounded by decades of flight to the suburbs.

Hundreds of buildings were left vacant by the nearly one million residents who have left. Thousands of businesses have closed since the city's population peaked six decades ago.

Navigating zoning rules and other red tape to develop land for big-box stores that might cater to a low-income clientele is daunting.

The lack of grocery stores is especially problematic. The last two mainstream chain groceries closed in 2007, when The Great Atlantic & Pacific Tea Co. sold most of the southeast Michigan stores in its Farmer Jack chain to Kroger Corp., which declined to purchase the chain's two Detroit locations, causing them to close.

A 2007 study found that more than half of Detroit residents had to travel twice as far to reach a grocery store than a fast-food outlet or convenience store.

Michelle Robinson, 42 years old, does most of her shopping at big-box stores in the suburbs. When visitors staying at the hotel near her downtown office ask where to shop, she sends them to a mall in Dearborn, 12 miles away.

A few retailers are thriving. Family Dollar Stores Inc. has opened 25 outlets since 2003. A handful of independent coffee shops and a newly opened Tim Horton's franchise cater to workers downtown.

Discount grocer Aldi Inc. opened stores in the city in 2001 and 2005. A spokeswoman said the chain is "very bullish" on Detroit. Farmer's markets draw crowds looking for fresh produce.

Olga Stella, an official at the Detroit Economic Growth Corporation, works to persuade businesses to move to the city. She says companies have underestimated Detroit's economic potential and that Aldi and Family Dollar are proof there's money to be made here.

Meanwhile, the former Lochmoor Chrysler Jeep is now Lochmoor Automotive Group, a used-car dealership and repair shop. Gina Russo, daughter of the dealer's longtime owner, is being groomed to take over the family business. She has agreed to start selling small pickup trucks made by India's Mahindra & Mahindra Ltd.

Write to Andrew Grossman at

Printed in The Wall Street Journal, page A3

Friday, June 12, 2009

Loop Dreams: the Musical....

It glitters like a jeweled crown rising out of the prairie - a towering tribute to muscle and hustle, sweat and tears. It is Chicago's Loop - the city's downtown - where buildings that emerged from the ashes of the Great Fire in the 19th century are dwarfed by the architectural accomplishments of the 20th century.

And for children who grow up in many of the neighborhoods that surround the Loop, it is as remote a place as Mars. Poverty makes it seem unobtainable. The poverty that surrounds the glittering beauty and power of the Loop is as desperate and as extreme as you'll see anywhere in the country. Each year, approximately 12,000 children drop out of Chicago public high schools.

What's the best ticket out of poverty? Education, of course. Which means that dropping out of high school makes it that much harder to rise above poverty.

Last night, Kanye West, one of Chicago's very own, a very famous and wealthy rap star, the child of an educator, gave a free concert to 3000 Chicago Public School (CPS) students who stayed in school and improved their grades. It was part of his Stay in School initiative, funded by the foundation started by Kanye's mother, Donda, before her death in 2007.

The Kanye concert was initially the brain child of a Highland Park High School student named David Abrams. Highland Park is one of the suburbs that makes up Chicago's affluent North Shore. Abrams was moved to act after hearing an NPR story on the challenges facing CPS students. He and a number of other students banded together to organize a free concert to incent students to stay in school and improve their grades.

I love this story. I love the collaboration between philanthropists, educators, students and artists. I love incenting children to learn - it works for executives on Wall Street, so why not try it with students in high risk neighborhoods?

More links follow....

Chicago Sun-Times coverage of the event

Kanye's foundation

Chicago Sun-Times story about the North Shore students who organized the event

WBEZ (public radio) coverage of the event

Friday, June 5, 2009

Dueling Job Reports! But Which One is Right?

Just the other day, the payroll firm ADP issued a report that said more than 500,000 people had lost their jobs in May. They also revised their April unemployment records upward - to 545,000 from the previous estimate of 491,000.

Today, the Bureau of Labor Statistics issued their report with a much sunnier view of the labor landscape - "nonfarm payroll employment fell by 345,000 in May, about half the average monthly decline for the prior 6 months."

Not sure how the two organizations came up with different numbers but both estimate unemployment to be at 9.4 percent (which, as some have noted, is a worse scenario than depicted in the Fed's stress tests, but we all know those were rigged, right?)

As you can imagine, the numbers cited by the BLS are happily received by the MSM. Some links to stories about this topic follow....

Denver Business Journal story on the BLS report

WSJ story on BLS report

MarketWatch story on ADP report

Reclaiming the word "Bonus" from the Ash Heap of History...

We live in a world where people in the financial community have turned “bonus” into a debacle – who insist that there’s no reason to work at a place if you can’t make astronomical sums of money, who quit when large bonuses are not paid out to them by a bankrupt company.

(Click here for a glimpse into that world...)

I am a mother of three small children, and what has been hardest for me, with regard to the collapse of our economy, is reconciling the lessons I teach my children with the situation we have today. I teach my children to share, to help others, to work with others and to become stewards of our community.

I see that to succeed in America today, these lessons are fraught with contradiction. Sharing is out of the question. Greed is inevitable. Bonuses are structured so that performance is irrelevant. Really smart people use their intelligence to wrest the most money for themselves. Money is the end, not the means to an end, of our labor in this life.

I sound naive, I realize, in bemoaning all that. But as spring turns to summer, I've come to realize I'm not alone in my naivety - that outside of Wall Street and Washington, there is a world of people who actually work in jobs they love, money be damned, and who believe a "bonus" should be a reward for a job well done, instead of an inevitable occurrence.

With my children wrapping up their school year this week, I realize that teachers – good teachers, that is – show how nonsensical the Wall Street way really is. Teachers make okay money – not great – not awful. When they do their job well, however, they pass on a legacy that lasts for a lifetime.

My three children received a golden bonus this year for sure – they all had wonderful teachers who were passionate about their work and their students. A great teacher is a priceless gift to students – something no amount of money can quantify.

And as my children wrap up their year and head into summer vacation, I know that outside of Washington - outside of Wall Street, there are a bunch of teachers in my town who understand the true meaning of work – and who recognize that sharing the gift of knowledge is the true bonus that results from their labor.

Thursday, June 4, 2009

"Replace the Receipt" - Another Phrase for "YOU'RE SCREWED!"

I'm not sure when "pre-owned cars" replaced "used cars" as a commodity, but certainly, "pre-owned" was a fabulous way to rebrand something that had long been associated with getting ripped off.

In Chicago, we have unleashed a new euphemism for getting fleeced - "replace the receipt." Here's the story from one of my Chicago spies who was in the city yesterday, trying to find some street parking at one of the highly controversial new parking meters....

The new meters not only have cost the city nearly a billion in future income (according to Chicago's Inspector General), they don't work. My spy dutifully inserted his credit card into the new meter (they've recently installed credit-card loving meters - replacing the need to lug around a small bank filled with quarters - the private company was asking for 28 quarters for two hours of parking - it's a mess, I tell you, a mess!) The meter noted that payment had been received, but then no receipt was issued.

The receipt, in this new Chicago version of street parking, is your proof that you've paid. So if the machine doesn't spit out the receipt, and the machine doesn't show you've paid, you get a ticket. You can contest the ticket, certainly, but that requires going to traffic court and leaving it in the hands of the judge.

Without a receipt, you have no proof. And in Chicago traffic court, it is not a given that the judge will listen to the consumer (though they're having such a tough time with the meters, that they're leaning toward helping out the general public these days in matters of the meters.)

Since my spy didn't get his receipt, he calls the number on the meter for help. He's informed that he can "replace the receipt" by going over to another box and paying again.

(You know that the operator on the phone did not come up with this phrase herself - I'm sure there was an entire marketing team dedicated specifically to the task of coming up with innocuous phrases to lob at consumers in an attempt to cool their passions.)

My friend isn't sure he's heard this correctly - so he asks if the person on the phone will void the payment he just made so he can "replace the receipt" at another box.

No, no, no. The meter people aren't able to void payment at broken meters. But my friend can certainly "replace the receipt," if he so chooses.

In other words, he can "replace the receipt" by paying twice. And that's if he's lucky enough to pay the second time at a working meter. In Chicago, these days, that's not a given.

So to get proper proof you've paid to park at a meter in Chicago, you may need to pay the extraordinarily high fees (some of the highest meter fees in the country!) multiple times in an effort to "replace the receipt."

Makes you yearn for the days of the horse and buggy - when the only sh*t you'd find on the streets was of an organic nature....

Wednesday, June 3, 2009

The Summer of Our Uncertainty...

Gas prices in my 'hood are now at $2.75 $2.89 a gallon, up nearly a dollar since a few weeks ago (and up 14 cents since yesterday morning.)

The ADP National Employment Report provides no solace. More than 532,000 people lost their jobs in May - more than some analysts expected; less than what others had anticipated.

Still, more than a half a million more people were shed from productive employment last month.

Small businesses - the ones not big enough to qualify for a bailout - have been hit hard by the economic downturn, according to the ADP report:

"Since reaching peak employment in January 2008, small-size businesses have shed 2,125,000 jobs."

Unemployment is likely to rise to 9.2 percent for May. From this point in early June, summer looks to be long and hot, especially for those with no income coming in. Let's hope the stimulus kicks in with a breeze that cools down the unemployment figures.

Here's the ADP summary of their report:

"Wednesday, June 3, 2009, 8:15 A.M. ET

Nonfarm private employment decreased 532,000 from April to May 2009 on a seasonally
adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from March to April was revised by 54,000, from a decline of 491,000 to a decline of 545,000.

Monthly employment losses in April and May averaged 539,000. This is a notable improvement over the first three months of the year, when monthly losses averaged 691,000. Nevertheless, despite some recent indications that economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months, although perhaps not as rapidly as during the last six months.

May’s ADP Report estimates nonfarm private employment in the service-providing sector fell by 265,000. Employment in the goods-producing sector declined 267,000, with employment in the manufacturing sector dropping 149,000, its thirty-ninth consecutive monthly decline.

Large businesses, defined as those with 500 or more workers, saw employment decline by 100,000, while medium-size businesses with between 50 and 499 workers declined 223,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 209,000. Since reaching peak employment in January 2008, small-size businesses have shed 2,125,000 jobs.

In May, construction employment dropped 108,000. This was its twenty-eighth consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,345,000. Employment in the financial services sector dropped 32,000, the eighteenth consecutive monthly decline.

For information on the construction and use of the ADP Report, please visit the methodology section of the ADP National Employment Report website at"

Bum Rush Means Bad Deal for Chicago

We live in a culture driven by the automobile (the bankruptcies of GM and Chrysler, notwithstanding.) You'll find densely packed cities to be densely packed with cars, in addition to people. As a city dweller in Chicago, I'd perfected the art of parallel parking my tiny car into the tiniest spaces.

Parking is a premium commodity in Chicago. And in the Loop, one has become accustomed to paying dearly for the privilege of parking.

But in Chicago these days, finding a place to park your car has become embroiled in scandal. In his quest to fill up empty city coffers, Mayor Daley and his rubber-stamping city council have been trying to sell off city assets like there's no tomorrow; thus, with the gleam of gold in his eye, Daley leased the parking meter commodity for the next 75 years to a private firm (somehow, Morgan Stanley is involved in this deal, not sure how!) for the sum of $1.5 billion.

The deal meant parking rates would go up dramatically, leaving Chicago with some of the highest parking meter rates in the country (to pair nicely with the highest sales tax in America.)

Not the best deal for consumers - but a good deal for a city dealing with a significant budget shortfall, right?

Not according to the city's inspector general, who issued a report yesterday lambasting the deal.

The Chicago Sun-Times reports:
"Chicago’s 36,000 parking meters were worth nearly twice as much as the $1.15 billion Mayor Daley got when he rammed through a 75-year lease in a few days without analyzing what the system was worth, the city’s inspector general has concluded."

Apparently, the city signed the deal before conducting an assessment of what the lease would be worth.

Thus, the private firm got a bargain - a steal, really. From the intro to the Inspector General's report:

"In other words, by giving up control of the parking-meter system for 75 years, the City relinquished future parking-meter revenue that has a present value of approximately $2.13 billion. This means that the City received about $974 million less for the parking-meter system than it was worth to the City – or alternatively, that the City leased the system for a price that was 46% lower than its value to the City."

Daley's peeps are saying that the report is tossing around "dubious figures." What's dubious is leasing an asset for nearly a century without putting in the due diligence to determine what a fair market value would be. Charging half-off out of desperation is a very bum deal for the "city that works."

Links to more stories about this issue here:

The Inspector General's Report

Chicago Tribune story on the report

Sun-Times opinion piece on the deal

City press release from March 2009, addressing issues resulting from the transition to the new meters.

April story in the Chicago Reader, covering the problems with the deal

Tuesday, June 2, 2009

The Equal Opportunity Big Mouth

Dick Cheney has placed himself prominently in the public eye once again, this time as an advocate for gay marriage. Speaking at the National Press Club yesterday, he said, "people ought to be able to enter into any kind of arrangement, (but) that it ought to be left up to the states."

He is consistent, I'll give him that. He's long been a steadfast supporter of torture - and he's been a voice for gay marriage since at least 2004.

Cheney did not focus his thoughts only on the rights of gays to enjoy matrimonial life. While at the podium at the National Press Club yesterday, he also took the time to:

- Defend the war in Iraq, despite the lack of evidence that Saddam Hussein had anything to do with 9/11.

- Say that the White House's refusal to declassify CIA memos on detainee torture was "foolish, deeply unfair and sets a dangerous precedent..."

- Call the closure of Guantanamo prison "a terrible mistake."

- Let the world know that "freedom means freedom for everyone. I think people ought to be free to enter into any kind of union they wish, any kind of arrangement they wish."

The nation's strongest voice for torture is also the conservative movement's biggest advocate for gay marriage.

Now that, to borrow from Churchill, is a "riddle wrapped in a mystery inside an enigma."