Boreal B[l]og

Two days ago, when I got into the car, it wouldn’t start.  It was dead.  No click, nothing.  I had two choices:  one, get the car jumped, drive to an auto parts store, remove the battery, buy a similar one, install it there, then drive home.  I could have paid less. The issue would have been only if I happened to stall on the way to the auto parts store, or if the problem were not the battery but a faulty starter, which sometimes will still allow the car to be jumped.

Instead, I called AAA, using my membership, under $100 annually, and in 20 minutes someone came over, tested the battery, said that indeed I had a battery problem, and sold me another battery for $116, including installation.

During past battery self-installations, I have lost screws and once dropped two wrenches into the heat shield of the car, where eventually they fell out as I turned a corner one day. I may have paid more than I could have, but having AAA come over and take care of my problem in 45 minutes was convenient.  It was worth it.  I didn’t get upset, I didn’t have to look at batteries, I got what I needed, and I got it installed.  If I happened to love cars, I would have enjoyed the work.  I don’t enjoy putting in batteries.  How much is the convenience worth?  I don’t know.  But it is worth something, and the older I get , the more worth I ascribe to convenience.

Convenience matters.  We left money on the table when we sold our house.  It was worth it. Not having to worry about the house when we left Tucson was worth a lot.  How much?  I don’t know.  I don’t really care.  It was one less major stress.

It costs me to have somebody clean the gutters.  I can do it myself.  I also can fall off the ladder.  Don’t laugh.  My wife, a radiologist, has told me countless stories of X-Rays she has read of people who fell off ladders.  The stories are gruesome—severe head injuries, dislocated ankles, hemothorax, or blood in the chest.  My father fell off a ladder when he was 77; his shoulder was never again the same.

Convenience stores are called that for a reason.  One pays for it.  If one needs a loaf of bread at 2 a.m., one pays a little more and gets it.  All insurance is a convenience.  I can put away money in case my house burns down.  Or, I can pay something and not have to worry whether I am putting away enough.

Urgent Care is a convenience, too.  One pays more for care there than with one’s personal physician, but if I have a bad cough on the weekend, and am concerned about pneumonia, I can get the answer then, not wait until I can be seen by my physician.  Yes, it costs more.  Being hospitalized for pneumonia that might have been prevented is costly, too.

With all of this in mind, when should one take Social Security, when they are 62, 66 (or the current “normal” age), or 70?

Virtually every financial advisor, including Suze Orman (who has changed her mind on the issue) says one should delay as long as possible.  The longer one delays, the more one gets, increasing approximately 8% per year.

A New York Times columnist says he has gotten many spreadsheets from people saying why taking Social Security earlier is better.  He doesn’t agree with them.  He’s right, from a purely financial, logical standpoint.  If one looks out to age 77 or beyond, taking Social Security later turns out to be significantly better, assuming one can predict inflation and one’s longevity.  If inflation stays low, and one lives long, without a doubt, starting Social Security later will be a better choice, if it is a matter of money only.

The issue with finance, however, and indeed with investors, is that we are neither logical nor rational when it comes to money, and that is not necessarily bad.  I haven’t heard “convenience” in any discussion about Social Security, since like many things in the world that have value (love, friendship, caring, kindness; pollution, degraded views, ugliness) convenience is often construed not to have value.  It does have value, but the individual has to decide how much.

So, what was convenient about collecting Social Security at 62?  At the time, I was retired and appreciated receiving money monthly.  It was a psychological boost, pure and simple.  I like to think that I enjoyed the money more at 62 than I will at 72 and 82, assuming I live that long.  Indeed, I’ve received money for the last 50 months, rather than not getting any by waiting.  Does that matter?  It depends upon one’s circumstances, inflation, and taxes.  How important is the psychological factor? I don’t know, but I think it is significant.  Four years into this, I have no regrets.

If it takes me until I am 78 until I start to lose money, or even earlier, I’m not going to be upset.  For 16 years, even 10 or 12, I was ahead of those who waited.  After that, they will have received more money from Social Security than I. I hope they enjoy it; I hope they use it well and are happy.

When should one take Social Security?  If one purely wants to maximize income, wait until age 70.  One gets about 80% more per month than at 62, but one also needs several years to make up the initial difference.  For many others, wait until 67.  The table shows it clearly.  There is no right or wrong answer, if one factors in convenience and psychology to the financial picture.  I believe that convenience matters.  If having the money now, even if less, to deal with the present is important, then taking Social Security early is the best move.  If getting more money later is more important, taking it later is the better strategy.

BORN 1943-54:                Age 62=75;     Age 66=100;   Age 70=132

BORN 1957                        Age 62=72.5;  Age 66=96.7;  Age 70=128

BORN 1960 OR AFTER        Age 62=70;    Age 66=93.3;  Age 70=124

I don’t underestimate the worth of those things that either cannot be or are not measurable.  If we factored our Middle Eastern policy into the cost of gasoline, we would now drive cars getting 150 miles per gallon, if they even used gas.  If we factored into the cost of food pesticides, transport, waste, and environmental destruction, we would be eating differently.  Economics often deals with things that can be clearly measured, using nice mathematical formulae, too often assuming those variables, and only those variables, are all that matter.  They don’t. We are emotional beings who think we are rational.

Life is not as simple as we would like it to be.

In 2002, I discovered  to my chagrin that I wasn’t going to get served a meal on a four hour flight.  That was an annoyance, but it was only a minor harbinger of the future.

A recent spate of articles in The New Yorker has alluded to the difficulties the average traveler has flying.  Those who fly frequently pay for certain conveniences: $85 for TSA pre-check, faster and friendlier, and not in stocking feet, $25 per bag check-in, so I go carry-on with a day pack crammed with everything I may need, and early boarding (Zone 2), which is a $89 annual fee on a credit card for which I can get a free flight in maybe a decade.  Zone 2 allows me to put my carry on in the overhead early, before it is full.  There are $6 “snacks” and $6 Internet, too.  I now bring a lunch.

First Class round trip from LAX to Australia is $13,000, and people pay it, either with their money, or corporate money, which is all of our money, since “corporate” got it by selling somebody something, and probably got a tax break on it, too.  Fly from Seattle to Amsterdam round-trip costs about $1200;  another $7000, you go first class.  I paid $7000 to take a course on quality in medicine that changed my life, although I never got rich from it.  I’m retired, should survive, but I can’t comprehend paying $7000 to sit in a different seat.  My wife says, “If you have gobs of money, why not?”  She’s right.  Economy seats have shrunk; the largest seats are about the same size as the smaller ones two decades ago. Why sit in the back if you can afford to sleep lying down up front, if you got the dough and you’re old?  It just seems ostentatious to me.  I know several not for profits who would be thrilled to have that $7000.  It would be life changing to seven students at a community college I support, if each of them got $1000.  I know.  I’ve read their letters.

Jet Blue finally bit the bullet, the last airline not to charge for what were once called “frills,” giving the airlines a huge profit.  What is not surprising is that fares have not recently declined, despite the fact that the single biggest cost—fuel—has become far cheaper.  But as soon as there is a rise in the price of crude, it is immediately translated into increased prices.  It was like the price of silver and film years ago.  When silver became expensive, so did film, immediately.  When silver became cheaper, well…….

The only thing that still hasn’t changed is that we economy folks get to the same place at the same time.  Now, we don’t get inside that place at the same time, but the arrival is still equal.

Gobs of money.  That’s the term.  There are people with gobs of money.  Not $3650, which puts one in the richest half of humanity, but gobs.  The richest one percent in the US own more wealth than the bottom 90%.  The top 1% make $519K, the top 1.5% make $250K.  The richest 1% pay 24% of federal income taxes, and they state that isn’t fair.  I counter with Willie Sutton’s Law:  When asked why he robbed banks, Sutton replied, “That’s where the money is.”

Wealth management pays well.  I was turned down for a trust company because my net worth hadn’t reached their minimum.  They mentioned (and they had no business saying it) that one of their clients had a net worth of $350 million. That is gobs of money.  It is incomprehensible, I don’t know who makes that kind of money, but to me that screams “charges too much,” “ought to be giving a lot to support poorer people, public education, scholarships” “ought to be taxed on it,” “drugs?” and other socialistic statements.  Really, $350 million?

High end stores survive recessions well, because there are always those with gobs of money.  Five thousand of these folks got more than $1 million in bonuses in 2009, ($20 billion total were paid in bonuses) after the economic disaster they created starting in 2005 came home to roost.  What has changed is that many have become more ostentatious with their houses, cars, and the right schools.  I’m not talking about a good college, I’m referring to the right kindergarten.   When I practiced neurology, we had to make a rule that only four times a year could somebody take their salary early, because some of those earning $400,000 a year were asking for it because of “needs”.  The day we discussed that topic, I thought I was on Mars.

“I earned my income,” I could say.  “I studied hard through high school, college, medical school, and residency.  I did it myself.”  Well, yes and no.  I lived in a country that gave me free public education, good teachers, cheap medical care, infrastructure, subsidized college education, both by alumni and by the government, paid for defense (and I had to serve), and had a progressive tax code.  That’s all gone now.  Most of these people are white, male, and have connections.  I had two out of three.  The rest often work just as hard and aren’t as lucky.  The people on the bench spend just as much time working as the starters.

There is something wrong with a country where employees need food stamps and health insurance, while their employers have $125 billion ($125,000,000,000) net worth.  There is something wrong when 20% of the homeless are veterans.  There is something wrong when people traveling with children can’t board before first class passengers, where an airline is going to proffer “economy minus” seating (stay tuned), where Germany offers tuition-free education, while our students are saddled with huge loans, and the outgoing (read: fired) president of the University of Oregon got nearly a $1 million severance package for his subpar leadership.  Personally, I would have been embarrassed to take it, slinking away quietly.

There is something wrong in a country where quarterly earnings matter more than long term thinking, where hitting financial targets are more important than public health targets: reduction of teen pregnancy, domestic violence, gun violence, obesity, smoking, and numbers of uninsured, to name a few.  There is something wrong in a country where the CEO/worker pay ratio was 20 when I was in college, 60 in 1990, now well over 200.

There is something wrong with a country where we have $1.1 trillion in student loan debt, not dischargeable through bankruptcy, has 11% default, changes what jobs people get, and is a tremendous burden.  A 0.125% tax on all stock trades ($1.25 per $1000) would generate enough money by 2026 to pay off current student loan debt.  That’s the America I’d like to see.

There is something terribly wrong in a country where the political party that brought Civil Rights (and African-American sports stars) loses almost every election in the South. There is something wrong when trying to insure a few million more people medically was met with devastating defeats in both chambers of Congress, where the other side has offered nothing.

America gave the world three gifts, all in danger:  liberty, the national parks, and public education.  There is a fourth gift, also in danger: a large middle class losing faith in the system.  Gobs of money are not trickling down, and they never have.  The direction of the trickle is upward, defying both gravity and logic.

They just keep on a comin’, surveys about my latest purchase, its packaging, its delivery.  But enough about Amazon—for now.  Even medical and veterinary practices survey these days.

I received an automated phone call the other day, and as soon as I realized it was from a doctor’s office—a physician whom I had just seen—the ugly S-word, survey, popped into my mind.  “The survey would only take a few minutes….”  Later, the voice told me they needed “just a few moments” of my time.

Let me be clear:  a few minutes is no more than four.  A few moments is a lot less.  The two are not equivalent, and I am the most time conscious person I know. I can quickly quote my age in billions of seconds and days to the nearest 5%.  I love numbers.

Because I liked the doctor, I decided to stick around to take the survey, my eye on the second hand in the kitchen clock, which had moved a quarter a way around the dial (more than a few moments) before I heard a new voice, computer-generated, a poor sound, which turned me off.  Sure, it saves money, but it is a bit tacky.  I made a honest mistake, pressed the wrong button, and the survey disappeared.  That was good, although I missed a potential learning experience from a computer-generated phone survey, and my doctor missed hearing something, too.  Alas, I’m not paid for “a few moments” of my time these days.

It’s unfortunate, because what would have worked for me would have been a nice cheerful young woman’s calling me.  Trust me, you could find one at any Dutch Brothers kiosk in Eugene, and for $15 an hour, you would have a person making good money using her personality skills AND get a better survey.  The conversation might go like this:

“Mr. Smith (Dr. Smith would have me send her flowers), this is Irina at  xxxx’s office. We wanted to thank you for your visit and ask if all your questions were answered, or if there was anything we could have done better.”  Notice the lack of  “survey,” which has become a big red flag for many, “just a few moments,” the use of “thank you” and the emphasis on “anything,” because that gets people, otherwise reluctant to comment, to say something.

“No, everything went well.  I really liked the doctor.  He explained everything and spent a lot of time with me.”

“Oh, that is so nice to hear.  If we can be of help, please give us a call.  Thank you so much for your time.”  (She acknowledges the time using only the possessive adjective).

That took 22 seconds.  Your time may vary.

Now, the bean counters and the spreadsheet folks aren’t going to like the data, because it is not numerical.  Let me be again clear.  I am the most numerical person I know.  But, this isn’t about numbers.  It is about patient satisfaction, post-visit questions, feedback and discovering potential problems in practices.  Not only that, the doctor would have my feedback three days after I saw him.  Why, I might even tell Irina the specifics of the visit I liked.  She got a response, and I bet she would get a census—every response—if she asked the question to others the way I just posed it.

Instead, they got nothing.  Actually it was worse, because I pushed a “1” on ease of scheduling an appointment, which was the wrong number.  I figured “please press 1” was coming, and I didn’t wait.  Shameful.  The computer-generated voice didn’t know what to do.  Irina never would have done that.

I understand the need for companies to get customer’s opinions.  In the old days, we wrote letters, usually complaining about something that went wrong.  When I cleaned out my late father’s things, I discovered copies of letters I never would have sent, excoriating people. It didn’t bother him.  I have sent positive letters, like to the guy at Delta who brought out something I left on the plane and gave it to me.  Good companies know how to respond to complaints.  I still have one from 43 years ago, when my wife and I, on our honeymoon, were late getting back to Woods Hole, because the ferry turned around and returned to Nantucket to drop off a workman who forgot to disembark while docked at Nantucket.  They inconvenienced several hundred people for a jerk.  The CEO told me that.  He didn’t waffle, say “we regret the inconvenience.”  If I remember correctly, he said that he had a shouting match with the Captain, and the Captain lost.  Now, that is a good, honest response to a complaint.  Don’t get many of those today.

Waiting time?  The front desk person can easily figure that out.  They know the time of the appointment and when you are taken back to the office. You don’t need to survey to get it.

People aren’t going to pick up the phone to take a survey.  Better to have an old fashioned suggestion box at the front door, with plenty of paper and a pen.  Label it “Suggestion Box”.  If it doesn’t work, then remove it.  See what happens, first.

Personalized calling is much better business.  If you use a veterinarian, notice how they call the day after a non-routine visit, to make sure everything was fine, asking if there are any questions.  Such a call shows personal interest, especially when the pet’s name is mentioned.

Doctor’s offices can do this, too.  My doctor’s day would have been made, had he heard the things I would have said.  Everybody loves a compliment.  And if something went wrong, people need to hear it sooner, rather than later, or not at all, when the patient disappears—and tells others the bad experience.

For those who want phone surveys, hire an Irina, and skip the S-word.  Jeff Bezos has a net worth of nearly $28 billion.  I suspect if 20 people a day got a call saying, “This is Irina from Jeff Bezos’s office at Amazon.  Has our service met your standards?”  Mr. Bezos would learn a lot.  Admittedly, it’s old fashioned, unlike the e-mail bombardment one gets after a purchase.  But there is an old-fashioned term given when the front office calls an customer: “courtesy.”  Jeff ought to make a few calls himself.  Wow, that would make waves in the B-schools.

Strange thing is….such a call is not at all innovative.  It used to be the norm.

We could learn from Floyd, one of my cats.  Every night, when I fall asleep, Floyd lies against me, but not so hard that I am uncomfortable or have to move.  Four hours later, I awaken, shoved over to one side of the bed.  Floyd is an incrementalist.  He pushes slowly, consolidates his gains, and pushes a little more slowly.  I move.

Mr. Obama’s decision to act on immigration has angered people on both sides of the issue.  That to me is the hallmark of a good decision.   One may look at it as “we didn’t get what we wanted, so it is no good” or “we got some of what we wanted, and we will strive to get more.”  The first is perfectionist thinking, which brought us George W. Bush.  The second was incremental thinking, and it brought us Medicare, which didn’t fix medical care costs, but got us a lot closer to that goal.  Bear with me:  I won’t forget cemetery thinking.

The idea that a president can act unilaterally is not new.  Herbert Hoover blocked immigration, lasting 5 years until FDR started taking in Jews’ fleeing Nazi Germany.

On Facebook, I know people on both sides of immigration, and they are angry.  To both sides, I have two words:  GROW UP.  Two more words:  NO WAY in a country of 310 million will each of us get what we want, when and how we want it.  The President is trying to ADDRESS the issue, not make it perfect. NOBODY CAN.  Indeed, the Senate passed an immigration bill upon which the House of Representatives refused to act, because Mr. Boehner, a Republican, not some liberal like me, chose not to act on the bill.  Minority leaders: Tea Party—didn’t want it.

Mr. Boehner wants to run out the clock on Obama.  Indeed, if you are winning, and there is not a lot of time left, you want to use as much of as you can when you are in control.  Conventional wisdom called Mr. Obama a lame duck.  Instead, he acted the way I did when I was a “short timer” in the Navy.  I wasn’t going to be there much longer; when my happiness quotient (time served/time left to serve) was 3, similar to Mr. Obama’s, I started doing what I thought I should, not worrying what somebody would do to me.  Mind you, I wasn’t a jerk, but I spoke up when I thought people were wrong, and they were stuck.  I accomplished a lot; I asked for what I really wanted, another cat ploy, realizing the worst thing that could happen was somebody would say “No.”

You see, back then, the worst thing for a doctor was to be was in the military, on a ship, and deployed.  I was all three.  What could they do to me?  Take away my birthday?  And what is the House going to do to Mr. Obama?  He transformed himself from being a lame duck to a pterodactyl.  He acted, and the Republicans must respond.  Given the complexity of immigration, the suddenness and timeliness of the action (although it was predictable), before the annual 6 week shutdown of America called the “holidays,” a big lump of carbon landed in a lot of stockings.

Get real, folks.  Immigration reform won’t please everybody.  We have to have some sort of secure border, we can’t take in the world, we shouldn’t split up families, and we shouldn’t be hiring workers who are here illegally.  That is only part of the problem.  I want something DONE, see what happens, and then modify it.  The status quo isn’t working.  If both sides get something, wouldn’t that be better?  Most rational adults would say yes. Mr. Obama is governing, and this isn’t fun.  But avoiding the issue is even worse, sort of like climate change, but that is for another time.

Mr. Obama apparently decided it was time to quit playing safe, trying to please everybody, and run the country as best as he saw fit, since nobody else was willing to, and he had the power.  He issued an Executive Order, one of about 190 so far, and Washington howled.  How dare he?  Well, Mr. Reagan issued nearly 400, and the previous president, who brought divisiveness and two unnecessary wars not paid for with a war tax, the doughnut hole costing $135 billion more than predicted, and wanted to privatize Social Security, which given the recession that followed, would have been disastrous, issued 291.

Here at home, Sen. Ron Wyden’s bill to deal with increasing timber harvest, yet putting controls on it and adding wilderness areas has been hammered from both sides.  I’m a life member of the Sierra Club, but I try to be a life member of the reality club. Given my druthers, I’d ban logging, stop poisoning the land after clear cuts, since the poison is getting into the water and into the bodies of people in this state, and have a lot more wilderness.  Well, I’m not going to get my wish.  Period.  We aren’t going to stop logging in Oregon.  We can, however, add some wilderness to a state which has one of the lowest percentages in the west. Eugene has no wilderness within 40 miles.

When you have two disparate groups arguing, you have four choices: one, keep arguing and doing nothing; two, give it to one side, which creates a lot of enmity; three, compromise that gives both sides something; four, find an out of the box, creative solution that never occurred to anybody.  I’ve pretty much given up on the last, although there are a lot of creative thinkers in this country, but we need to listen to them, not ask for their money, or recycle yet another governor, senator, or general, who really ought to retire and volunteer somewhere.  America can fix problems.  When both sides dig in, both lose.  Being angrily dug in to a position usually ends up burying a lot of good ideas.  And I call that cemetery thinking.

I don’t have a problem with the Sierra Club’s wanting more.  That’s fine.  But take what you can get, people, because at some point…..hmmmm, right now for example, the next few years are not going to be very good for wilderness, politically.   Having sensible actions, even imperfect ones, to make more wilderness, even at the cost of other areas, might work.  Then you work for more.

Health care reform?  I’m an incrementalist.  Ideally, I’d expand Medicare to the whole society.  That isn’t going to happen.  Realistically, expanding it to 55 and older is one option; another is expanding it to pregnancy, labor, delivery, and the first 10 years of life.  Put in measures that would serve to show what does and does not happen, good and bad.  I believe it would cover many poor women and children, and at the same time force abortion foes to make good on what pro-life really means. I ask, how can one be against a program that helps women and children?  Easy.

By being a cemetery thinker.