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Rogue Wave

Now that elections are over, I have a few observations, in no particular order:

1.) New Jersey.  I don’t like Christie, didn’t vote for him and think he’s a bully.  But I do kinda understand why New Jersey re-elected him.  First, I’ve noticed that Democrats have been tending to not support candidates that are liberal.  I’ve mentioned more than once that there are no women in the Congressional delegation in either the House or the Senate and it’s been that way for a couple of decades.  In 2006, there were a couple of liberal candidates that got very close to winning congressional seats and were supported vigorously by the party.  That all changed in 2008 when the Obama campaign took over the machinery after Obama secured the nomination.

Second, there is Sandy.  It was pretty rough.  I lived 36 miles from NYC and the shore and it was still awful.  Power lines down for about a month.  No school for a couple of weeks.  Whole forests decimated.  Price gouging on firewood when my entire township couldn’t turn on their electric or gas heaters in November. And gas lines like you would not believe.  Seriously, people.  It was no picnic.  But there was one thing that stood out for me about Sandy that made me think of Christie.  It was this.  Two days before it hit, I was on my way to the movie theater to pick up Brook and I was at a red light at Route 206, which is the only, inadequate single lane road in central NJ.  It was dark.  All of the sudden, a convoy of electric company utility trucks  and cherry pickers passed by.  There were about 20 vehicles.  That was weird enough but what was even weirder was that they were from out of state.  They were from Michigan or Vermont or somewhere.

You can say a lot of negative things about Christie, and I have, but when push came to shove and he saw that monster bearing down on us, he swallowed his pride and begged for help.  And he got it.  He couldn’t do anything to stop nature but he went beyond the call of duty in making it bearable.  The state is still a mess.  In particular, the infrastructure is pathetic for a state that is essentially the suburbs of NYC and Philadelphia.  I put a lot of the blame on the Republicans for failing to change what is the worst part of living in NJ.

Taxes.  That is the third part of why Christie won.  Ironic because his party should take the blame for how ridiculously expensive it is to live there.  The property tax burden is especially brutal for middle class people living in the suburbs.  It’s actually not so bad for the very wealthy.  Some wealthy townships are in sending districts, which means they send their kids to a neighboring school district for high school.  Consequently, their taxes are relatively low in comparison.  And there’s not much of a sales tax, which is great if you live in NYC and can go shopping in NJ but now that I live in PA, I can see why a sales tax is so useful. The wealthy can’t get out of paying at least *something*.  In NJ, the wealthy can pick and choose what taxes they want to pay and they’d prefer to put the entire burden of financing the state on the backs of people who are in the middle who own houses.  My taxes on a modest little townhouse in a middle class burb?  $6700/year.  Ridiculous.

When it comes to elected officials, NJ taxpayers go with the person who promises not to raise their taxes.  They’ve had bad experiences with democrats who promise to reform the tax system and then throw up their hands in frustration and don’t do anything.  That would be Jon Corzine.  And they’re not fond of Democrats who say taxes have to be raised, like Jim Florio, because, frankly, there’s only so much blood you can squeeze from a stone.

Then there are the teachers’ unions.  Now, I was on the school board and I don’t begrudge teachers their salaries and pensions.  It is expensive to live in NJ and teachers are making a living wage there and that’s about it.  And I don’t think Christie is being fair or honest when he says NJ teachers produce a bad product.  Those teachers are pretty good for about 95% of children who live there.  They absolutely SUCK when it comes to the gifted though.  It’s criminal.  No, really, I mean it.  Now that I live in PA and the local school system tested Brook and we know exactly why she didn’t fit in to school for 11 years, it’s kind of a relief to know that there was nothing wrong with *HER*.  It was all the NJ teachers’ collective hive mind and their ridiculous ideas about heterogenous classroom experiences.  I do not miss NJ when it comes to the schools but I realize that we are a special case.  If you have a reasonably bright kid, his or her future on Wall Street is all but assured as long as they are obedient, compliant and willing to stay up all night.

That being said, there are a lot fewer New Jerseyans who can afford to pay these teachers.  That’s because the pharmaceutical industry, which was one of the few remaining non-financial industries left in NJ, pulled out en masse in the last 4 years.  I am not exaggerating when I say that everyone I worked with in the past 25 years was laid off because of site closings, mergers and other reductions in force.  Some of these people auditioned for new jobs in their companies and had to relocate to Groton or Cambridge or the west coast.  Others went to work for CROs.  Others are struggling  with small start ups or are self-employed.  Most of them are making much, much less money and many of them have no health insurance.

I was not surprised to see that the Obama administration is dismayed by the number of older people signing up for the exchanges.  I would love to see the numbers.  I’m guessing that there are a lot of 45-65 year olds in NJ who are in that cohort.  Their companies abandoned them in one of the most expensive places of the country to live and health insurance on the individual market is out of reach for most people.  That’s one of the reasons I moved to PA.  At least I could somewhat afford health insurance, although probably not for very much longer.  It’s sucking up all my savings.

So, anyway, the bottom line in NJ, as I see it, is still taxes.  Perversely, the higher property taxes are, the more a Republican who promises not to raise taxes is likely to do well.  A Democrat is either going to find NJ hard to reform or slap on a new tax and nobody there wants or can afford.  So, until the economy improves, don’t be surprised that Christie is a winner in NJ.  But let’s also not forget that he may be a local phenomenon.

2.) Virginia.  Ok, some of you lefties have a very weird thought pattern when it comes to Terry McAuliffe.  It’s like “He turned me into a newt!” and he wears a long pointy nose.  I think it has something to do with the idea that pure politicians are cool, detached, intellectual types who do not dirty their hands with money.  Yeah, that’s how we got Obama.  HE didn’t dirty his hands with money.  All of his financier class backers did.  I have read a lot of allegations about McAuliffe’s money but nothing feels or looks or reads as anything tangible.

Oh, but he was involved with the Clintons.  uh-huh.  That’s the thing, isn’t it?  The thing about the Clintons is that the Big Dog admitted that he made a mistake when he listened to his economic advisors.  He seems to have learned.  You would think that Obama would have learned too but he’s actually worse, so, you know, there’s that.

From what I can see of the Virginia voter demographics I’m going to guess that a.) it was an off year election, b.) many of the Democrats’ key constituencies are wondering if it’s worth voting at all ala Russell Brand and c.) many Republican hard ass so-called Christian types are still motivated to go out and punish people who insist on having sex without their permission, like that’s the only thing in the world that matters.  But it still wasn’t enough for the Republicans to win.

Never the less, I don’t know if there is going to be a wave election next year.  I’m predicting that Obamacare is NOT going to get better.  I think it’s going to be the equivalent of the work house for Americans of a certain age.  Everyone is going to be very, very afraid to lose their job because they might have to go on Obamacare.  We’ll see.  I’ve been right about Obama so far.

Gotta go.

Followup and stuff

A few random followups based on comments and such:

1.) I am well aware that there is a law (HIPAA) or guideline or suggestion that your insurance carrier has to provide you with a certificate of coverage and that you can not be denied insurance for a pre-existing condition and that new carriers have to pick you up within 63 days of the last day you had coverage from your previous carrier.  And I qualified for all of that.  I have never been without insurance for even one day since August 1986.  That has nothing to do with the cost of the premium.  You and the carrier can comply with the laws and you could still get stuck with a ginormous, whopping premium through no fault of your own because one of your family members has a pre-existing condition.  They can’t deny you coverage but they can make you wish you didn’t have to pay the premium.  That’s the insurance industry’s way of encouraging you to not bother them for a policy.  See how Congress has looked after us?  Heartwarming, isn’t it?

2.) I have no problem covering the costs of other people’s health care but I do have a problem with people who insist on consulting unproven alternative medicine and I’d like that to no longer be possible.  If you want to visit chiropractors and acupuncturists, do it on your own dime.  My point about insurance is that at this point in time, it’s easier for the ditzy to get their weekly back cracking covered than for those of us with ailing family members to get the care they need at affordable prices.  That’s wrong.

3.) Unrelated: Atrios posted a link to an older post he had on ACORN and the foreclosure crisis and how the Vampire Squids were shoving their blood funnels into every aspect oo mortgage and real estate interactions back in 2007.  That reminded me of the letter I got from Wells-Fargo yesterday.  It was a sort of frantic letter on their part saying, “We see that you are escaping our event horizon by paying off your mortgage and home equity loan.  We are trying frantically to reach you (by an old phone number) and haven’t been able to.  Please contact us so we can persuade you to renew your relationship with us.  We’d like to talk to you about new ways we can hook you back up to our perpetual money making apparatus.  Sincerely, your BFFs at Wells-Fargo”

Too funny.  By the way, I’m still waiting for the escrow account money Wells-Fargo generously decided to withhold for the payment of the ridiculous property taxes I paid in NJ and if the check is not here by the end of the week, I’m contacting my lawyer.  Sincerely, the newly emancipated RD.

Note: A curious thing happened when I called W-F about the payoff amount for the home equity loan (all of which went back into the house for really useful stuff, not vacations to majorca or a new car).  When I called them, they wouldn’t give me the payoff amount and they refused to release the lien on my house.  They told me that only a third party could do that.  In other words, my exasperated lawyer had to prepare a document and send it to them on his letterhead in order to get a payoff amount at closing and have the lien on the house released.  Both myself and the lawyer were pretty steamed about this.  It cost me extra legal fees and it seemed completely unnecessary.  The lawyer said that Wells-Fargo is full of serendipitous surprises like this that hold up closings.  So, what was the alternative?  Wells-Fargo said they would give me the payoff amount and release the lien directly IFF I contacted them by snail mail and waited- are you ready for this?- FORTY DAYS from the receipt of the snail mail.  By then, the closing would have had to be put off and all kinds of chaos and expensive and unnecessary mayhem would have ensued.  I have yet to hear a logical, rational, consumer friendly explanation as to why the loan account holder was not able to process this request within the 3-5 days and that it required the magic mojo of a lawyer’s third party stationary to get it done.  But I smell a scam.

4.) Chris Christie has set an October date for the election of a new senator to replace Frank Lautenberg who died recently.  The Democrats are howling at how unfair it is because it means there will be an expensive election separate from the one for governor to be held a month later and the earlier one will dissuade voters from showing up to kick Christie’s ass out of Drumthhhhhhhwackit.  As if NJ residents didn’t already have a zillion reasons to displace Christie.  I don’t know anyone who really likes him and quite a few teachers and school employees who actively hate his sizeable guts.

But all of the candidates that the Democrats are proposing to replace Lautenberg are male.  Corey Booker, another bonus class ass kisser in the mold of Barack Obama, is on the top of their lists, as is Frank Pallone, a Democratic Congressman.  NJ is not my problem anymore but I would like to point out- again- that there isn’t one single woman in the US Congressional delegation from NJ.  Not one single Congressperson or Senator from NJ is a woman.  NJ is the densest state in the union, in more ways than one (don’t even get me started).  You would think Democrats would make more of an effort to promote women into that delegation but I lived there for 20+ years and saw very little evidence of it, Linda Stender being a notable exception in 2006.  The state Democratic machine abandoned Stender in 2008 when Obama and Rahm Emannuel decided to knife liberal Democrats.

Take that in.  In the state with the densest population not one of their congressional delegates to either house is a woman and this has been the status quo for almost 2 decades.

I have remarkable little patience for either party in NJ but the crocodile tears the Democrats are spilling over this golden opportunity to elect a woman to the Senate and start cleaning up their shameful record of neglect for more than half of their population has me playing a very tiny violin.

Surviving a Layoff or How I did it.

I see the light at the end of the tunnel and it is not a train.  My house is under contract and I’m making a decent profit on it. I’ll be able to pay off all my outstanding debts, put away a good chunk for the kid’s college fund and have enough to live on for the next year if I manage my money well. Next week, I’m moving my furniture to the new house in Pittsburgh.

Here are some of my tips for surviving a layoff in the Little Depression.  Please note that if everyone took this advice, we’d be plunged into another recession because when you’re in survival mode, spending money to keep the economy going is not your first priority.

Pre-layoff

1.) Prepare for a layoff well in advance of one.  Have at least 6 months salary saved up.  If you can, set aside a year’s mortgage and tax payments.  My savings combined with NJ’s unemployment pay helped me immeasurably.  Kudos to the NJ Department of Labor.  They were kind, respectful and helpful.

2.) Pay off as much debt as you possibly can.  Don’t buy a new car unless you can pay cash or the monthly payments are low enough that you can still eat on your unemployment check.  Maintain your car.  Payoff your credit cards.  Don’t go on vacation.

3.) Make sure you are healthy.  Get a yearly physical, address health issues when they crop up and you still have insurance.  Don’t put anything off.

During the Layoff

4.) Try not to panic.  I panicked and almost made some major, major mistakes.  Thank goodness I had Katiebird.

5.) Get a Katiebird.  It’s probably best if the person lives in another state and can’t see you everyday.  Just chit-chatting with another person over stuff can calm the nerves.

6.) Don’t take the first job you see.  Take your time and develop a Plan B.  Consider what kind of work you like to do, where you want to live and whether you can afford to stay where you are.

7.) Don’t rule out working for free.  If you’ve saved money and you’re covering your bills, use the time you have to stay current with your skills or learn something new.  I was fortunate enough to hook up with some people I used to work with who let me participate in some projects.  As a result, I’m looking forward to a publication that was recently submitted and have been invited to stay on an ongoing project.  I’m now getting paid a small amount but the whole experience kept me sane and I appreciated every minute of it.

8.) If you can’t afford to stay where you are, move.  I used the last year to fix up my house, learned how to install faucets, wire lighting fixtures and garbage disposals and experienced the joys of ripping out 25 years of creeping juniper in order to create “curb appeal”.  In the meantime, I looked for a bargain house in my target city and found one.  I paid cash for the house I bought (more on how I did this later).  Now, when I move there, my biggest expense will be my health insurance.  I will have no mortgage and the house is about 1/4 mile from the bus line.

9.) Do whatever you can to keep your health insurance.  COBRA is ridiculously expensive.  In fact, it cost me about half of my unemployment checks. There really should be a law preventing that. But you never know when you will need medical care so don’t drop your insurance under any circumstances.  Also, keeping continuous coverage will help you transition to an individual policy.  Don’t skip this step. I’ve known people who thought they could get away with not covering themselves or their children and they are now regretting it because after 63 days of no coverage, it’s really difficult to get affordable insurance on the individual market.

10.) Cancel any monthly bills you can live without.  I cut the cord on cable but kept internet.  It turns out that Brook and I didn’t really miss much.  I reduced my car insurance because I was no longer commuting to work.  Don’t buy a lot of clothes and other material goods but don’t forget to treat yourself once in awhile to a Grande Cinnamon Dolce Latte or a Gelati from Ritas.

11.) Use your IRA carefully.  I rolled my 401K into an IRA and purchased my new house with part of it.  You can do this without tax penalties if you return the money to your account within 60 days.  That 60 day thing seems rather arbitrary and rules out using the money for things like starting your own business but that’s the deal.  This is what Congress legislated.  It’s a shame that my generation has been snookered by fast talking financial planners in expensive suits to socking our nest eggs and rainy day funds in “instruments” and retirement plans that are not liquid without huge, and I do mean HUGE tax penalties, but there you are.  You *can* use this money but you need to be very clever about it and ask a lot of questions over and over again to make sure you’re doing it right.

I recently met a woman who created her own IRA real estate investment fund.  She now invests her IRA money in this fund and uses it to purchase houses all across the country.  She fixes them up and rents them and plans to earn enough money to retire from this fund.  In her case, since she’s not taking the money out, there’s no tax penalty.  Something to think about.

So, now, I’m just waiting for the final pieces of my move to fall into place.  I don’t have a regular full time job yet but for now, I’m Ok.  I have some money left over, my kid’s future is not dismal and my health insurance is covered.  I didn’t lose my house and my credit is still pretty good.  When I move, my standard of living will be about the same as it was in NJ.  My house is about the same size and I’ve got more land.  It’s in a nice neighborhood and my neighbors are about the same socio-economic status as before.  It’s just in a different city.

I can work from home but I’ll probably be looking for a job when I get there.  At this point, I can bartend and still be fine.

That’s not to say that there weren’t bumps along the way.  There were plenty, including one major one that I will tell you about someday.  But in any case, it *did* get better.  Whether all this frugality is good for the country is another story and there’s no doubt that the idea that researchers can afford to do research on their own without the economy of scale of a bigger lab or company is just utter nonsense.  I don’t believe in “creative destruction”.  As Gandalf said, “He that breaks a thing to find out what it is has left the path of wisdom”.  Breaking the economy, breaking up R&D facilities, breaking up families and lives, just to see what happens and assuming that everyone will land on their feet all ticketyboo is not a good economic strategy.

But I survived.

****************

What are your layoff tips?  Add them in the comments.

 

 

O-care

Paul Krugman’s latest column is about the mess of our national health care system.  He makes a good point about how social insurance programs make us freer people, allowing us to change jobs and start new enterprises without the fear of economic catastrophe.  But I’m not sure the so-called “jahb creators” care about economic catastrophes that happen to ordinary people.  To them, the only thing that counts is success.

I’ve got to admire Paul’s sunny optimism about Obamacare but, frankly, I think it’s a pretty fricking bad piece of legislation that didn’t rein in health care costs, locked us into a decidedly UN-free marketplace  with zero competition, and was only achieved by throwing women’s right to an abortion under a bus.  So, you know, there’s that.  I don’t particularly like Obama’s method of getting universal healthcare.

It beats me why he didn’t take his own state of Hawaii as a model for healthcare where employers can choose from several tiers of coverage for their employees, from basic coverage to more swank.  Oh, wait, that sounds more like what Hillary proposed during the 90s.  You know, the system that everyone whined was too complicated?

At this point, I would take even a basic plan.  My COBRA coverage runs out at the end of this month. I can’t complain about my insurance provider, except for the outrageous premium, even with group rates.  The coverage was superb. That’s what my French company negotiated for us. But getting insurance on the open market is fairly terrifying.  I will be looking into CHIP programs for the kid.  It’s going to be an adventure.  Spending hours and days trying to justify my need after the decades I spent as a hard-working taxpayer is not how I want to spend my time.

Stupid Insurance Companies

I’m wasting time today trying to find a more affordable health insurance policy.  The one I have is outrageous and it all has to do with where I live.  If I move one state over, my health insurance costs drop to about 1/4 of what I pay now.  The policy I’m looking at has a higher deductible and co-insurance but in many respects, it’s identical to the one I had with Wyeth before I left.  It wasn’t until I went to a European company that I discovered what I was missing.  But along with that coverage comes a walloping, gigantic price tag every month and that’s the group rate.

I can’t believe that NJ has sicker people than in PA but there ya’ go.  Someone is taking advantage of a river.

But wait!  There’s more.  Reader givens sent me a link to this incident involving a lifeguard in Florida.  The lifeguard was asked to rescue a drowning man.  So the 21 year old lifeguard grabs his floaty thingy and runs off down the beach, Baywatch style.  By the time he gets there, some other people had dragged the guy out of the water and the lifeguard stayed with the semi-conscious man until paramedics arrived.  Great, you say.  Happy ending, no one drowned.

Not so for the lifeguard.  Here’s his account:

After the rescue, Lopez said his boss asked him to fill out an incident report and then fired him for leaving his assigned area.

“They didn’t tell me in a bad way. It was more like they were sorry, but rules are rules,” Lopez said. “I couldn’t believe what was happening.”

According to the private company that now manages the beach for the town, the rescue took place on an unprotected strip of beach not covered by the contract.  The swimmers in that area are advised to swim at their own risk.  The contractor says the liefguard left his section unprotected while he went frolicking in the surf.  The other lifeguards say this isn’t true and that they were aware of the situation and covered the beach.  Two additional lifeguards have quit in protest.

It’s likely that this dismissal was prompted by the rules set down for insurance coverage for the beach.  I don’t know if this is the primary cause but I’m betting that it is.

Now, what could the contractor have done differently?  I dunno but firing the kid seems a bit extreme.  After all, a lifeguard is trained to save lives and to not attempt a rescue might have gotten him in trouble with Good Samaritan laws, though, this *is* Florida we’re talking about so maybe they have never heard of Good Samaritan laws.  The drowning man should consider himself lucky that no one shot him for being on the wrong side of the beach.

But there’s more to the story.  It turns out that the contractor gets paid $334,000 a year for guarding this part of the beach.  But it only pays its lifeguards $8.50/hour.  Really??  You go through all of the physical and first aid training and you get as much as a hamburger flipper?  There’s something not right about this.

So, I did some math.  If there are 4 lifeguards on the beach making $8.50/hour for 40 hours a week for 52 weeks a year, that comes out to $70,720/year for all 4 lifeguards.  Let’s say the supervisor makes $16.00/hour.  That brings the cost to the contractor to about $104,000.  Add on an additional 10% for all of those employer related tax thingies (you know at this level of pay that no one is getting health insurance) and you come out to: $114,000.  Just to be on the safe side, let’s say that health insurance is included for some cheapo EPO with a $1500 deductible and 30% coinsurance for an additional $250/month per employee.  That comes out to an additional $15000 for a grand total of about $129,000.

What is the contractor doing with the other $205,000?  Maintenance on the beach towers and floaty things and first aid kits can’t be that expensive.  So, where is all the money going?  Is the contractor pocketing it or paying liability insurance?

And if they are pocketing a good chunk of the remainder, was privatizing the service really saving the town that much money?? And if taxpayers are so adamant about saving money, shouldn’t there be a cap on the amount of profit a contractor can make?  I’m just taking this thinking to its logical extremes.

Just curious.  How much do you want to bet that “privatizing” involves a lot of favoritism, kickbacks and corruption?

Wednesday: Brain drain?

This article from the NYTimes should get some attention.  It’s about an awards program from the Howard Hughes Medical Institute.  The awards are given to foreign born scientists who study here in the US and then return to their home countries.  The nation with the highest number of recipients this year?  China.:

China’s government has thrown billions in recent years into building a top-notch research establishment, hoping to keep its best scientists working here and lure back those who are abroad.

Now comes a hint that that effort is beginning to pay off.

The Howard Hughes Medical Institute, one of the world’s most prestigious research foundations, announced Tuesday that it washonoring 28 biomedical researchers who studied in the United States and then returned to their home nations. Each will receive a five-year research grant of $650,000.

Seven — more than any other nation — are from China.

“They’re incredibly energetic, extremely smart, highly productive and accomplished,” Robert Tjian, president of the institute, said of the Chinese winners in a telephone interview. The 28 are receiving the institute’s first International Early Career Scientist awards.

This comes as no surprise to those of us who have worked with Chinese scientists.  The cream of the crop came to study here in the last couple of decades and while some of those scientists are simply good, some are really top notch.  This is probably the case with every country’s academic superstars but China has been ferocious about developing their talent.

But here’s where the changes in our American culture are going to bite us in the ass.  It used to be that when Chinese scientists came here, they were reluctant to return home.  Not any more.  And it’s not homesickness that is driving them.  It’s all related to how the money has dried up in research here in the US:

“Young people go where they can flourish the best,” he said. “And those countries have been able to attract young scientists trained in the U.S. to go back.”

“That’s a big hurdle. It used to be that people thought people came here and never went back. But I think now that is starting to change.”

Some of the award winners agreed. “I think it’s very obvious in recent years, and we’re very happy to see that,” Wang Xiaochen, a former doctoral student at the University of Colorado who is now at Beijing’s National Institute of Biological Sciences.

While many if not most Chinese doctoral students who choose to remain in the United States after their studies, she said, in China, “I don’t have to apply for a grant,” while in the United States “the funding situation already is very tough.

I think I’d have opportunities, but I’d have to spend a lot of time applying for funding. Here, I don’t have to apply for my own funding. So it’s an easy decision for me,” she said.

This is the common complaint I am hearing.  There’s very little grant money and what there is takes a lot of tedious, time wasting paperwork to acquire.  And then there’s the political aspect of getting grant money.  I would wager to guess that most scientists are not particularly good at the kind of salesmanship that is required to constantly beg for money.  And that’s a problem if you have an area of research that doesn’t respond well to interruptions and postponements.

But it’s not just the academic/government grant area that is suffering.  Small start up biotechs are frequently faced with some stark choices.  Take the example of Alnylam that Derek Lowe of In the Pipeline posted about last week:

The news is that Alnylam, the RNAi company just down the street from where I’m writing, is cutting about a third of its workforce to try to get its best prospects through the clinic. This is a familiar story in the small-pharma world; there’s often money to try to get things through the clinic, or to pay everyone in the earlier-stage R&D – but nowhere near enough money to do both. There are companies that have gone through this stage several times, sometimes rehiring the same people when the money began flowing again.

So, you can have early stage research or clinical trials.  But you can’t have both.  This is really dangerous for Alnylam because if their best prospects get crushed in clinical trials, and this happens a lot, they won’t have much to fall back on because they’ve had to cut back on their R&D staff.  This is just an example of what small biotechs are facing all over the country.  The result is that scientists bounce from job to job, coast to coast.  The pay is not as good as it used to be, benefits are skimpier and when the money runs out in a year or so, you have to find a new job.  Where are you supposed to live?  Can you afford a family if you are living a precariat existence?  And what’s going to happen when you are required to pay health insurance premiums to private insurance companies without any attempt at cost control?  The costs to the individual researcher is going to continue to rise with no stability in their work or domestic life. Is this any way to treat people who take the toughest majors in college?

Once again, I have to caution politicians and CEOs who think this is a good way to run research.  It’s extremely counterproductive.  Research frequently requires long periods of continuous study and work.  There are high start up costs associated with equipment and reagents.  Biotech is not like Silicon Valley because microchips follow predictable physical laws.  Cells do not.  It’s great for China that it’s starting to invest heavily in it’s scientists but it’s still going to take that country many years to figure out how to crank out new discoveries that will pass the FDA’s rigorous safety standards.  It’s hard, hard work even for the brilliant.  And then there are the scientists who did not graduate from prestigious universities.  With the number of discoveries we are making in biology these days, there is more than enough work for all of us but without money, those of us with the ability and inspiration but not the opportunities are wasted.  You never know when one of your well trained staff is going to notice something or makes that extra compound that makes a billion dollars a year.  It happens all of the time and it doesn’t take a Harvard educated PhD to do it.  It does take a place to work, money to pay the bills and sufficient time to run the experiments.

If we don’t start putting money into this country’s scientific human infrastructure, it’s going to be gone.  And don’t anyone buy that crock of BS about companies that want to hire high tech but can’t find educated personnel.  There are about 100,000 of us sitting on our asses right now who can’t get employers to hire us.  As one former colleague said, “They want someone right out of school with 25 years of experience.”  In other words, the MBAs seem to think this is so easy that anyone can do it.  It’s merely a series of tasks that can be pharmed out to any sufficiently trained research labtech at a CRO, right?  Sort of like ordering parts for a car.  They couldn’t be more wrong.

So far, the only barrier to having full employment of scientists is that companies want to sit on their cash in the hopes of driving wages down and that government is being incredibly stingy.  You can’t make a life on $37K a year after spending most of your adult life studying.  And some of these companies are creating their own finance problems by locating themselves in the most expensive places in the country to work and live.  But there’s no getting around the fact that research is expensive no matter where you do it and that it takes a long time and investment in people for it to pay off.  Pay us or lose us.

Monday: Research Professionals in NY, NJ, CT- pay attention

A lot of you are understandably upset that the world expects you to take a steep cut in pay and forego benefits because they don’t see how the chicken gets made, plus you belong to a reviled profession.  You’re only a step above health insurance claim processors and nuclear reactor specialists (there are family members out there who are laughing very loudly right now).

Anyway, how do you pay for everything on your vastly reduced salary while you fly back and forth between coasts trying to keep your head above water?  Well, this article in the NYTimes describes one possible option.  It’s called the Freelancers Union and it is growing:

For most of the 20th century, it was efficient to link benefits to jobs this way. But today, more and more work falls outside the one-to-one, employee-to-employer relationship. Work is decentralized, workers are mobile, and working arrangements are fluid. However, the risks of life haven’t gone away: people still need protections. They just need a different system to distribute them. They need benefits that they can carry around, like their laptops. As things stand, millions of independent workers go without health and unemployment insurance, protection against discrimination and unpaid wages, and pension plans. It makes no sense.

One of the social innovators to recognize this problem early and act on it was Sara Horowitz, the founder of the Freelancers Union, which has more than 165,000 members across all 50 states.

She quickly discovered that their biggest concern was the cost of health insurance. But there were other problems, too. Unlike traditional workers who receive unemployment benefits, independent contractors have to rely on their own resources to get through hard times. In 2009, Freelancers Union surveyed 3,000 members and found that more than 80 percent had gone jobless or underemployed during the year. More than 60 percent had used their credit cards or borrowed from friends and family to make ends meet, and 12 percent had to turn to food stamps. Close to 40 percent had given up, or downgraded, their health insurance protection.

Another problem was getting paid. Some companies, like Time Inc., actually charge freelancers penalties if they request payment within 25 days. Freelancers Union found that 77 percent of its members had been cheated by a client during their careers and 40 percent had had trouble getting paid in 2009. The average wage loss was $6,000. The Department of Labor protects traditional workers from unpaid wages, but freelancers have no equivalent recourse. Then there were difficulties obtaining mortgages, the lack of access to 401(k) plans, and other issues.

Go read the whole article.  This is either a step in the right direction or the last resort.  Regardless, it’s necessary.  I didn’t know that some companies make you wait so long to get paid and penalize you if you ask in advance in order to feed your kids.  This is the up and coming area where labor laws will be fought because so many of us are being forced into contract work.  You don’t have to be a psychic to figure out how this will impact the economy in the future.  If you can never be absolutely sure that your work will be paid or if paid, paid on time, it’s very difficult to pay the rent or buy a car or any other little luxury in life, like an education for your kids or a retirement for yourself.  It’s the way of the precariat.  Expect that to eventually effect the cost of houses, the number of cars sold in the US and a rise in the number of emergency room visits that must be picked up by taxpayers.

When precariatism hits the experienced research professional it’s particularly disturbing because most of the time, we’re just not paying attention.  We don’t have the smooth talking survival skills of the salesmen.  Our work is vital, no question about that.  And it’s academically and mentally demanding.  But the bigwigs who run things are commissioning their next yacht.  They fail to see the way they are destroying their research departments, to the eventual disappointment of the shareholders, and they’re not particularly concerned with the impact that their short term decision making and trendy management schemes are having on the economy.

So, you have to do things for yourselves.  You can’t expect anyone else to do this for you.  I checked out the Freelancer’s Union site the other day and their health insurance policies were competitive with my COBRA policy and in most cases, the price was much more affordable as was their term life insurance.  When you’re out of the system *everything* is more expensive.  It’s really unfair to your kids.  But there you go, that’s the way it’s going to be until we get a handle on this new reality and figure out a way to gain the upper hand again.  Is every new idea going to be perfect at first?  Of course not.  Few things are.  But I was genuinely surprised to find that a freelancers union existed at all.  It’s going to be a long hard slog.  Start now.

Today, the Freelancers Union offers health insurance policies only to New York state residents.  They have a presence in NJ but no insurance policies yet.  I don’t know how long it’s going to take to get them either but we are in desperate need.  Those of you booted off the pharma payrolls in NJ might want to consider moving across the border if you’re commuting anyway.

Don’t let them force you into precariatism without a fight.

Or…

Paul Krugman had a recent post about the McKinsey study that purports to show that up to 30% of employers are planning to drop health insurance coverage due to the Affordable Care Act. The Obama administration and other Democrats seem to be in full denial mode, demanding that McKinsey show its data because it can’t *possibly* be true. Right? RIGHT?!

In some respects, this reaction is reminiscent of the Republicans who were adamant that Democrats take it back about Republicans trying to destroy Medicare in franked mailings and ads.

I’m of the “let’s wait and see the data” variety before I jump on the Democratic bandwagon. Paul’s a pretty smart guy but he may be jumping the gun here. Just because McKinsey isn’t revealing their data doesn’t mean their conclusions aren’t true. You don’t have to be a Republican to consider the possibility that the conclusions are valid.

Here’s just one possible scenario that may explain why McKinsey is holding out. The firms they are consulting for may be planning to layoff a lot of people and hire them back as contractors. If they do that, the employee is responsible for paying health insurance, not the company who is going through a middle man to add staff. Now, your consultants would know about this plan. Presumably, they were the knuckleheads that advised it in the first place. But you don’t want the employees to know what’s coming. I mean, have you *been* in a building that’s going through layoffs?? The people who aren’t wandering around like zombies are busily updating their CVs and contacting their network. No one gets any work done. (well, *I* did but I see now that I was crazy for all the good it did me) It’s a fricking disaster area. And let’s not even talk about the cut throat behavior of people back stabbing each other to make sure they secure the positions that are left. It’s an ugly bloodbath and no one comes out looking good.

So, maybe the reason that McKinsey isn’t talking is because it has to respect the confidentiality of its clients. In this business environment, the bottom line is the bottom line. Companies will do what they have to in order to appease the shareholders and right now, a lot of companies are desperate for cash and can’t cut much more without affecting productivity any more than they have. They still need the people. They just don’t want to have to compensate them so well. If that means laying off and hiring contractors without the burden of health insurance, well, the new Affordable Care Act gives them a great opportunity to do it. They just need to keep everyone working until then.

Of course, this is just a hypothesis. But it could explain the silence on McKinsey’s part. You don’t want to be the bearer of bad news that there is going to be a lot more unemployment soon and a lot more people without health insurance.

I’ll wait to be proven wrong.

We’re already paying for healthcare

the-far-side-comic


Opponents of health care reform seem to focus on two main points – cost and “rationing.” It is an article of faith among Republicans that single payer health care will cost a lot more but will provide less health care. Near as I can figure they think there isn’t enough health care for everyone so in order to extend coverage to everyone we’ll have to take some away from the people who have it now. But I don’t want to discuss the “rationing” fallacy today, I want to discuss the cost fallacy.

This is what we were paying for health care two years ago:

Total spending on health care, per person, 2007:

United States: $7290
France: $3601
United Kingdom: $2992
Italy: $2686

As of 2007 we were spending $7290 per person for health care. That is not an average of $7290 for each person lucky enough to have health care coverage, that is the average for everyone in the United States. Take the total amount we spend on health care and divide it by the number of people in the country and you get $7290.

But for all that money we aren’t even covering everyone.

For reasons that used to make sense most people that have health insurance get it through their employer. Most people that don’t have employer-based health insurance are either on Medicare, Medi-caid or have no health insurance. Some self-employed people purchase health care insurance but the cost is prohibitive especially for the working poor.

This is how we pay for health care now:

Employer contributions
Employee contributions
Self-insured premiums
Co-pays
Deductibles
Cash payments for uncovered/excluded treatments/medicines
OTC medicines
Taxes

Employer contributions are a non-taxable benefit your employer may choose to provide to you. It’s logical to assume that if they weren’t paying health care premiums with that money they could add it to your salary since they are spending it on you anyway. This is a point I will come back to in a bit.

Right now some people have good health care insurance, some have bad health care insurance, and some have no insurance at all. People with insurance or lots of money can go see a doctor for minor problems and routine exams. People without health care insurance or piles of cash are limited to urgent and emergency care. For too many people the local emergency room is their primary care physician.

When people go to the emergency room for non-emergency care the chances are they can’t afford to pay the bill. If they could afford to pay the bill they would go somewhere cheaper. So not only are premium services being used to treat minor illnesses and injuries, but those services end up being paid by tax dollars or by passing the cost on to the paying customers. (Basically the same thing)

When someone declares bankruptcy on medical bills the medical providers do what all businesses do – they raise their prices to compensate. Whatever your doctor charges for his or her services includes a calculation for bad debts. That’s just business.

There ain’t no free lunch. If we reform health care we still have to pay for it. But we’re already paying for it. If we took all those same dollars we’re spending now and applied them to a single payer system we would almost certainly far pay less than we’re paying now.

I can say this with assurance because every civilized nation with single payer or socialized medicine pays far less per person than we do. I qualified my statement by saying “almost certainly” because given half a chance our government will let the foxes into the henhouse.

The logical way to pay for single payer health care is through taxes. It would be similar to the current Social Security and Medicare people already pay. But even if we were able to cut our current costs in half that would still mean a cost of $300 per month per person. ($3600 divided by 12)

Poor people won’t be able to pay that amount. They can’t pay it now, and passing a law requiring them to purchase insurance won’t make them able to afford it either. The only people who can pay are the people with money.  That means that people with higher incomes will have to pay more. But they are already paying more. The trick is to figure out where that $7290 is coming from now.

Theoretically we could come up with a tax that would take the money we are paying now from the same people that are already paying it. Ideally it would be a progressive tax on all income. We should eliminate the artificial distinction between “earned” and “unearned” income. (Ever since the Sixteenth Amendment was passed the rich have been trying to get out of paying their fair share.)

If single payer became a reality it would sure be helpful if employers were to pass on all the money they are currently spending for health insurance coverage to their employees as a pay raise. Some would, but many would figure out a reason to keep it for themselves.

When someone starts yapping about the cost of health care reform and claims that Social Security and Medicare are going into the red, point out that we already pay twice as much as the civilized world pays and we’re getting less than they are for our money. If we do it right we’ll spend less than we are now and get more for it.

And point out that the problem with Social Security and Medicare is one of execution, not design. The Republicans want to bankrupt all the New Deal and Great Society entitlement programs so they can justify repealing them.


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Single payer vs Public option

This is all you need. Shove this in anyone’s face who starts saying, “But, but, but . . . the guvvamint!” From a comment by Mikirivi on Krugman’s blog, a graphic prepared by Dr. Klein for the Arizona League of Women Voters: (click on image for larger version)
side by side comparison of the two options

The one solitary “disadvantage” that I can see in the Single Payer column is that the insurance industry would need restructuring. I seem to remember reading somewhere that that’s over two million workers. So it’s nontrivial. But as I remember reading in the same place, most of the skills in the insurance industry are various office skills and are eminently transferable to other fields. (We could even, like, you know, help people make the switch.)

So we could have a system that costs half as much and insures everyone (“Single Payer and beyond” section in the link), or a variant on the baroque BS we have now. The choice is obvious. Baroque BS, of course.

The whole thing is eerily reminiscent of the electric car vs GM debacle. On the one hand everyone wins and GM has to be restructured, whereas on the other hand everyone loses and GM . . . .

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