EconomistMom.com

I was signed up to attend this New America event this morning, called “Are Today’s Teens Better Off Than Their Parents?”  In fact, I had arranged to bring my 16-year-old daughter with me who sounded mildly interested when I invited her.  But my best laid plans fell through when I had to adjust to the last-minute changes in my daughter’s social calendar (I won’t elaborate).  So I ended up missing the event as well.  Oh, the irony!

I hope they’ll post a transcript so I can see what the consensus answer of the experts is.  I only know the answer to that question as it applies in my own family!

Yesterday I was home with the kids (and dogs), and it went like this:

8:00 am:  take kid #1’s car to drop kid #2 off at her summer arts program (cost, $200+/week for 4 weeks, for $800+);

8:30 am:  drop kid #1’s car off at the Ford dealership for badly-overdue tune up/maintenance (initial quote, about $1500; later find out the alternator’s bad, so $2000 (but refuse to raise that to $3500 to get the AC fixed));

10:00 am:  bring kid #3 to her ballet camp (cost, $250+/week for 4 weeks, for $1000+);

10:30 am:  bring kid #1 to the oral surgeon to get 4 impacted wisdom teeth removed per our regular dentist’s orders (cost, $2745 out of pocket before our insurance, which the dentist does not participate in);

1:00 pm:  bring groggy kid #1 home to pick up kid #4 (who’s been home alone for awhile because I couldn’t get him to come with me for kid #1’s appointment), and bring kid #4 to the (same) oral surgeon to get 2 baby molars extracted per our orthodontist’s orders (cost, a mere $490, also out of pocket before insurance);

3:00 pm:  go out to fill prescriptions for kids #1 and #4 (out-of-pocket cost for the generic antibiotics, pain killers, and anti-nausea medicine, a shockingly low $4-$5 TOTAL);

3:10 pm:  while prescriptions are being filled, go to grocery store to buy lots of liquid and otherwise soft foods and somehow end up spending $150+ on juices, yogurt, applesauce, canned soup, and ice cream.

Let’s see, that’s about $7200 worth of family infrastructure spending!  Not exactly a “typical day” for our family, but it’s proof that one really has to be rich these days in order to have kids (especially that many kids).  (At least I didn’t really spend anything on the dogs yesterday, although my old beagle made sure that I spent time cleaning up his evening “accident”–to make it a pretty typical day in that regard…) 

Fortunately, it turns out our very generous dental insurance (courtesy of the Federal Reserve) will reimburse us for 90% of those dental expenses I paid up front, even though the oral surgeon “does not participate” with any insurance plans.  I didn’t find out the high reimbursement rate until this morning when I called our insurance company.  Yep, I had made and gone through with the appointments knowing in advance that the surgeon did not accept insurance, knowing the cost was estimated at $3000-$3500 for the two kids, and yet not knowing how much our insurance would cover for us.  Why?  Well, the “mom” in me was obviously more in charge than the “economist” in me, going through that simple, irrational, two-question test:  (i) is there any possible benefit associated with the expenditure (is marginal benefit positive)?, and (ii) do I have the money to pay for it? 

A week ago I was at my regular dentist for a checkup and mentioned that our favorite oral surgeon (and the one our dentist had referred us to) was no longer participating in any insurance and how much we had to come up with in advance to pay for the treatments.  My regular dentist said she knew of other oral surgeons that she thought did still participate in insurance that she could refer us to instead.  But then when I mentioned that we already had appointments (with nonparticipating oral surgeon) for the following week (and which I had easily scheduled just the week before) and how both kids were already overdue and could not afford to wait until August when cheerleading and fall baseball started (so it seemed they had to have it done ”now or never”), my dentist said “oh, well, you’ll never get an appointment with that little notice with [that oral surgeon who takes insurance].”

Plus, we already knew and liked this (nonparticipating) oral surgeon–we’ve been his patients for many years.  He’s got such a pleasant chairside manner for someone who’s putting you through torture…

And there you have it–back to my earlier point about why health care will always be unreasonably expensive.  I can’t shop for my family’s health care the way I love to comparison shop for other things.  There will always be people like me who are willing to pay unreasonably high prices for high quality (good and fast, and familiar) health care, even without the reality or awareness of third-party payments to hide the true prices.  And for the others who will not, or cannot, pay those unreasonably high prices– well, they just have to wait an unreasonable amount of time for an appointment.

I mean “trust fund” in a “public accounting” sense rather than “personal estate” sense… My husband and I have no personal wealth to put into a real trust fund…

My 15-year-old daughter was complaining to me last night about how her 16-year-old sister is making “like $150 per week” at Baskin Robbins, how she’s quite jealous of that and wants to find a job, too.  I started to explain to her that besides the fact that she would not be able to drive herself to a job, I really needed her to help around the house (now that we no longer have an aupair), and that that’s why she’s getting a pretty nice allowance lately.   She then correctly pointed out that she has not literally been “receiving” allowance lately because of my casual accounting system, where she typically gets NO cash at all each week, because I have been buying her photographic supplies and clothes each week and keep saying I consider it “a wash.”

She said she knows that it’s pretty much a wash, but that it’s a wishy-washy wash (my translation), so it doesn’t feel like she’s getting paid an allowance.  I think there’s some analogy that I could make to the idea that tax expenditures (the government devoting resources to tax reductions) aren’t viewed the same as other forms of government spending (and in fact aren’t treated at all the same in the budget process), but my daughter then took my analogy-oriented mind in a whole different direction by suggesting:  “why don’t we set up a fund?”…

I said ”do you mean literally set up a fund, or just set up a fund as an accounting device?”–and my 15-year-old knew exactly what I meant and immediately said she just wanted the latter–a way of keeping track of the weekly pluses and minuses to her “fund,” so she could see her credits for her weekly allowance and her debits for the goodies I was buying.  She said she’d then feel as if the allowance system was more tangible and more fair (whether on my end of the transaction or hers), and that she’d also then have more incentive to do the work around the house.  In fact, she suggested that I give her a specific list of chores and special cleaning and organization projects to do each day and each week, so she could check tasks off the list so that I (and she) would know she was deserving, and entitled, to her weekly allowance to be credited to her ”Fund.”  And she could check the balance in her “Fund” each day or week and feel good about her contribution to the household economy and the benefits she was receiving in return.

Does this sound a little like the Social Security Trust Fund to you, too?

I then told my daughter that if we go ahead and set up this more explicit accounting mechanism for her allowance, and the more explicit conditions for her to be “entitled” to that allowance, that I would really need to monitor and enforce how this system was working, because if, for example, she wasn’t really cleaning the bathroom, then our family finances would require that we reduce her allowance so that we could afford to hire a housekeeper to come in every couple weeks or so.  In other words, we’d need to revisit the terms of our allowance agreement (the structure of the flows into and out of her “Trust Fund”) in the context of the entire family budget–our full complement of needs and our full complement of means.

And she seemed totally fine with that idea. 

Such wisdom from my 15-year-old… (and all my kids are very smart–have I mentioned?) 

Now, I trust that readers don’t need me to spell out how this parallels the debate on the need (or not) to reform the Social Security system in the broader context of our longer-term fiscal challenge.  I’ll be more directly explaining my perspective on the issue later, anyway. 

So I think we’re actually going to implement this “Allowance Trust Fund.”  I know, I know, I have the benefit of being able to start this Trust Fund from scratch, and that’s what makes it totally different from dealing with the Social Security Trust Fund.  Not to mention the fact that this Trust Fund will be managed by more a (neat and easy) “benevolent dictatorship” rather than a (messy and complicated) “democracy.”  Still, it’s kind of a groovy little personal experiment, don’t you think?

Last week during our vacation to NV and AZ, my family experienced life with an SUV for the first time.  (You might find that amazing, given our 20-year-old human infrastructure project.)

We rented a Ford Expedition, so I was being good to my Ford engineer sister.  (Our household owns three Ford vehicles–two minivans and a compact car.  We’re soon to get a new compact and will donate the older minivan to charity.)

My husband says we filled up the gas tank three times, each time about $80 worth–so $240 in gas for the week.  Per person, that’s not bad ($40).  I just looked up the approximate mileage we drove in traveling from Las Vegas to Sedona, AZ, to the Grand Canyon and back, and back to Las Vegas.  I think that’s around 820 miles.  (We did a little bit of driving around each destination though, so adding maybe 20 miles to that gets us to 840 miles.)  With gas about $4 per gallon (it was actually cheaper in Sedona than Las Vegas, which surprised me), that’s 60 gallons of gas.  So that works out to 14 miles/gallon.  Ford says the Expedition is supposed to get 12-18 miles/gallon, so that’s right in there.

All in all, I think it was a good opportunity to experience the SUV and made financial sense for us–at least for the one week.  And it was a very comfortable ride.  I have to admit I’ve had this aversion to SUVs because of their reputation as gas guzzlers, and we won’t be buying one in the future (at least not until more hybrid, not-so-gigantic versions become available), but when I got home and looked at a few photos I had snapped of our vacation SUV, I realized that framing/context really matters.  (This psychology stuff is fascinating to me.  See yesterday’s post which mentioned “cognitive dissonance”.)

Here’s a photo of our vacation SUV filling up at the gas station:

…And here’s a photo of our vacation SUV near the red rocks of Sedona:

Kind of gives you a totally different impression of the SUV, doesn’t it?  I think I need to apply this lesson to the way I talk about the long-term budget outlook and the need for reforms. 

Back from vacation–as of 2 am this morning!

Thanks to Bob Bixby for pointing out this new LA Times/Bloomberg poll on the economy to me.  From the story, several lessons on economic policy are learned.

First, it’s obvious that tying your economic platform to some continuation of the “Bush Economy” is not going to win you many votes:

Nine percent of respondents said the country’s economic condition had improved since Bush became president, compared with 75% who said conditions had worsened. Among Republicans, 42% said the country was worse off, while 26% said it was about the same, and 22% thought economic conditions had improved.

Second, no matter what economists try to explain about gasoline prices, the basic laws of supply and demand, and the near mpossibility of government being able to counter natural economic forces, people will blame the government for either causing the high prices or not doing enough to prevent them.  The last thing people do is think that they themselves might have anything to do with the high prices.  (Did I mention that our family was driving a big SUV during our vacation?  More on that later.)

Asked for their view of the cause of the higher [gasoline] prices, respondents blamed the Bush administration and oil company profits in roughly equal measure — 29% holding the administration responsible and 25% blaming the oil companies, a spread within the poll’s margin of error.

Thirteen percent of those polled said commodities speculators were responsible for the increases; 14% said they were not sure who was at fault.

Amber Guckenberg, a 28-year-old stay-at-home mother in Kalispell, Mont., said she wasn’t sure Bush deserved all the blame for rising energy prices, but she wished he had found a way to rein them in.

(Makes it easy to understand why the politicians have felt compelled to suggest such things as gasoline tax holidays and windfall profits taxes, doesn’t it?)

And finally, here’s the part that’s most interesting to me.  Concern about the deficit as a “top priority” seems to be growing, but many more people (more than half of the respondents) think a top priority should be to do things that would most likely increase the deficit:

Though respondents had strong opinions about the economy, they were not sure how to make it better. Asked what the top priority for improving the economy should be, 27% said cutting taxes, 20% said reducing the federal deficit, 13% said funding public programs and 13% said addressing the price of energy.

It’s also likely that here, too, as with gasoline prices, there’s a lot of “cognitive dissonance” going around, where people choose to believe that the lower taxes or increased government spending that they want would not have an adverse effect on the federal budget, but might even improve the budget outlook.  (Hence, tax cuts that pay for themselves, and infrastructure projects that would pay off just like the Hoover Dam, are born.)

Thanks to Brooks who pointed out this NYTimes op-ed on ”cognitive dissonance” (and how it affects campaign strategies) to me.  I was drawn to this one passage mentioning Oliver Wendell Holmes…

In 1919, Justice Oliver Wendell Holmes of the Supreme Court wrote that “the best test of truth is the power of the thought to get itself accepted in the competition of the market.” Holmes erroneously assumed that ideas are more likely to spread if they are honest. Our brains do not naturally obey this admirable dictum, but by better understanding the mechanisms of memory perhaps we can move closer to Holmes’s ideal.

…because I once wrote an op-ed which opened with the famous (but I guess naive?) quote from Holmes:  “Taxes are what we pay for a civilized society.”  Hmmm…

Note that the authors of that NYTimes op-ed are (my emphasis, and link to prior post of mine, added):

Sam Wang, an associate professor of molecular biology and neuroscience at Princeton, and Sandra Aamodt, a former editor in chief of Nature Neuroscience, are the authors of “Welcome to Your Brain: Why You Lose Your Car Keys but Never Forget How to Drive and Other Puzzles of Everyday Life.”

 Wow!  I’ve got to get that book!

Today my husband and I celebrate our 20th wedding anniversary, while out in Nevada and Arizona with our four kids.  So here’s the latest photo of this 20-year-old “human infrastructure” project I’ve been working on–with a lot of help from my husband, of course.  (That’s Lake Mead in the background, taken right before we saw the Hoover Dam.)  Note that I am the 3rd-shortest person in the family, with only my 9-year-old son and 11-year-old daughter still shorter than me, so I’ve managed to construct pretty tall projects just like the Hoover Dam area’s been doing.

My family leaves for a week in Arizona tomorrow.  A few weeks ago I brought up the issue of what I was going to do with my three dogs–whether I might actually put them up in a doggie resort of sorts, such as a place nearby called “Dogtopia.”  A Dogtopia publicity guy even commented on that post, thanking me for putting in a plug for them–and even a link.  (Did he offer me a discount in return, though?…So this time, no easy link…)  One of my (human-childless) budget-expert friends even revealed to me that he brings his doggie children to Dogtopia regularly.

Well, our doggies are not going to Dogtopia, because when I looked into the cost, I realized that if we brought the dogs there, we’d be spending more on lodging on a per capita basis per dog, than per human.   Yes, I’m serious.  I mean, I love my dogs, but I’m not that crazy about them.  I actually think they’ll be happier to stay in our home and our backyard anyway, with our home-from-college neighbor looking after them.  (The other weird thing about these big “dog resort” places is that they’re almost all completely inside big hanger-type, warehouse-style buildings that the dogs must get used to as their indoor and outdoor world… They have fake grass and fake trees so that the dogs will still feel “at home” when they have to pee underneath a roof instead of under the sky…. I mean, how could I pay more per dog for that kind of “scenary” than what we’re paying per human to stay near the red rocks of Sedona?)

Will be writing from the road this coming week, laptop in hand, kids and hubby beside me.

Today was my mom’s 75th birthday.  My mom’s been an avid reader of my blog, and both my parents are totally fascinated with my blogging, so tonight I let them watch how I do it, and we tried out the nifty built-in webcam that’s built into my new laptop.

I’m visiting them sans the rest of my family, here in the Cleveland area, while I’m doing yoga during the day in Pittsburgh.  It’s been a good few days where each day I spend a few hours driving and listening to NPR, a few hours doing yoga, and a few hours spending unusually high-quality time with my parents.  (I think the last time I spent time alone with my parents was just after I got engaged and took a trip with my parents to Mexico.  That was 22 years ago.)  I’ve got a couple more days here before I head back home on Tuesday night, so that’s a couple more days of blogging from Ohio.

I was blissfully oblivious to all the bad economic news that came out today, until this evening when I got to read and watch the news…  Wow.

The unemployment spike is especially troubling, and now five straight months of job losses.  And then there’s the price of oil and, gee, the stock market pretty much freaked out today, didn’t it?  Maybe we really are in a recession, after all…  Economists keep changing their minds about this, and any official call from the National Bureau of Economic Research (NBER) doesn’t typically come until after the recession’s over.  Want to know more?  Go visit the NBER’s business cycle dating page (…sounds intriguing, doesn’t it?).

I spent the day driving to Pittsburgh for the first day of a yoga conference (I’m a yoga teacher in one of my other lives), so instead of fretting about today’s bad economic news, I was getting in touch with my inner self.  Then tomorrow I start a few days of commuting between yoga in Pittsburgh and visiting my parents in the Cleveland area.  While I’m visiting with my parents, I’ll be pretty oblivious to the longer-run economic problems our country faces as well, because our family faces no such demographic challenge.  My mom is celebrating her 75th birthday on Sunday, and my dad is almost 76 and is still working full time.  They don’t yet need me or my sister to support them–in fact, I doubt they ever will need my financial support.  (They’ll always need me for technological and other miscellaneous “support.”)  And of course, I have four children, which is not just good for supporting my own old age but is also my little contribution toward the Social Security crisis.  In fact, kid #1 is already paying Social Security taxes at her Baskin-Robbins job.  (I’m pretty confident she’ll eventually have an even better, more productive job later in her life, but she already views her job as much more productive than mine.  By the way, she highly recommends the “tropical ice” flavor.)

And getting back to today’s bad news, economists are saying (on Wall Street Journal blog) that my daughter’s recently acquired Baskin-Robbins job is actually related to the spike up in the unemployment rate, as more teens and young adults are looking for summer jobs and entering the labor force.  But that doesn’t necessarily soften the bad news–because the fact that so many of these young people are suddenly desperately seeking summer work, compared with years past, could just be yet another sign of a recessionary economy and the financial straits American families currently find themselves in. 

An article from the front page of the Business section in today’s Washington Post highlights how some people spend amazing amounts of money on their pets.  (The article emphasizes veterinary bills, proving that the rising health costs problem, featured in my Friday post, is not confined to human health care.) 

Sometimes these people spend that much money on their pets because their pets are effectively their only “kids.”  Others of us spend that much money on our pets because our pets are a lot like additional kids.

So have 4 human kids and 3 canine kids (and 2 hamster kids and 1 bird kid)…

Here are my 3 canine kids on Rehoboth Beach during spring break:

We take them with us when we can.   When we go to Arizona later this month, we cannot bring them.  So I’m in the process of investigating pet sitting options, including sending them to a “spa-like” vacation at a doggie resort.  It turns out there are many doggie resort options in the northern VA area (including a place called “Dogtopia”–really, check it out), because people around here have a lot of money, and some people don’t have human kids and so have even more money.

I’ll keep you posted on what I find in terms of pricing and what I end up deciding to do.