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Thursday, February 25, 2010
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71 comments:
I know these numbers are a little late, but I finally had some time to look into the tiered CS numbers. the low tier was -0.17%, the middle tier was -0.22% and the high tier was -0.27%. Below are the last couple months of data
low mid high
July 0.61% 1.61% 1.70%
Aug 3.44% 1.85% 1.23%
Sept 0.18% 0.63% 0.81%
Oct 1.93% 0.38% -0.92%
Nov 0.39% -0.39% -0.23%
Dec -0.17% -0.22% -0.27%
To me this really shows the impact of the 8K on the low tier. The low tier has fallen from positive to negative right after November. The high tier which is less effected by the 8k continues to be slugish with its 3rd negative month in a row. I think the high tier is dominated by where most of us are looking e.g. Arlington, Vienna, Oakton... and a couple places in Maryland. My best guess is we will continue to see the high tier fall at a slow rate. I am much less confident about the lower tier. My guess is it will continue to be the most volatile
Regarding FX County tax assessments.
I checked all sales in 2009 for one particular condo development.
Every sale (except 1) was consided "valid and verified". Even sales from Lenders and all shorts, as shorts don't even have a notation, are valid.
The one exception was listed as a "foreclosure". There were at least 40 sales and I seriously doubt one was truly "normal".
The question is whether these comps carry forward once the distress are gone? I've seen 40%+ increases in prices in other lower-end (under 200K) over the past year.
The development I looked at was converted and sold in 2005 and 2006. Original prices of 380K+- have been selling for around 200K. Assessments have dropped from a peak of 340 something to about 210K.
So, in essence, the distress sales are the new comps for assess. purposes.
It's really rather silly for the County to say they don't count distress. I'm quite sure the 2 shorts in my neighborhood were included in the reassessment.
VA-
I agree they should have said they don't count foreclosures but count other distressed sales or something like that. At least I assume they do not count anything sold at the court house, because "normal people" can't/don't buy them. Personally I think it makes sense to count shorts and REOs, but they should be clear this is what they are doing.
The reality is shorts and REOs do impact normal sale prices, which is why I think they should be counted. In my condo building there is almost no spread between organic sales and short/reos. There are plenty of sales and people see no reason to pay more for a normal sale than to get a REO that is in good shape.
hb,
The only issue that may be relevant is the extraordinary percentage of cash sales on the shorts and reo's. It's not "normal" to see this. So, while all present sales are "comps", they are rarely available to the normal buying public - at least the stuff I'm looking at.
HB -- thanks for the tiered CS numbers. Would you mind posting the raw numbers by tier (i.e. 178.6 or whatever)?
Im curious to see if they have (more or less) congealed around the same number.
Anon-
low mid high
Jan 161.45 168.48 175.43
Feb 159.02 165.5 170.6
Mar 159.15 162.43 167.91
Apr 163.81 164.77 168.1
May 160.98 166.78 170.98
Jun 163.16 170.96 173.23
Jul 164.16 173.72 176.18
Aug 169.81 176.93 178.34
Sep 170.12 178.05 179.79
Oct 173.41 178.72 178.14
Nov 174.08 178.02 177.73
Dec 173.79 177.63 177.25
Mid and high are very close low is doing slightly worse but is pretty close. Over the past ~10 years low has been the most volatile and high has been the least volatile.
Va-
I agree there are more cash buyers than usual, but there are still way more non-cash buyers. Maybe there are more cash buyers for the properties that have been totally destroyed, but most shorts and REOs don't need to be gutted they just need a little work...
No house hunting this weekend, we'll be in Florida. It's actually something of a relief, I won't have to think about it for a few days.
This article/video was highlighted on patrick.net. CNN profiles a family in Alexandria, VA in talking about the middle class.
The most important part is in the video which notes that there was only a 20% gain in middle class income between 1990-2008 (most of it in the 1990s) while housing costs went up 56%, college costs 60%, and health care costs 155%. I think it's pretty undeniable that the middle class is shrinking given these numbers but I know a few of you disagree.
tbw,
When you say the middle class is shrinking, what does that mean? That more people are going lower class, or the middle class is movin' on up? I've heard the phrase before, but wasn't sure what people meant.
TBW-
I would be interested in where they got there statistics. To me it looks like they are inflation adjusting wages are up ~20%, but actually wages are up ~70-80% depending what metric you want to look at. Also if you notice they were careful not to say housing costs went up 56%. In reality housing cost hardly up at all since 1990. They are saying the average houses price went up 56%, but mortgage rates went from ~9-10% to 4-5%, making the payment difference pretty minimal.
per capita income
mean & median household income
I assume you would agree that the median household is middle class right?
Wunderbar-
I think he is saying both of those are having. That there used to be a lot of people who could have a "middle class lifestyle" aka a reasonably nice house a car ... Now there are a lot more rich people that can have many cars and a mansion and there are many more poor people who live in apartments and have to take the bus.
The income disparity has grown some, but personally I still think there are a lot of middle class people particularly once you get outside of major metropolitan areas. I agree in DC, NY, LA... there is a huge gap between rich and poor, but once you get out of these cities this is not as true.
housebuyer,
Your second link shows they did not adjust for inflation because then the rise between 1990-2007 would be way less than 20%.
I think the median income went up more than 20% because upper class incomes shot up way more than 20%.
sehrwunderbar,
Yes it is a little of both some people becoming upper class and many going to the working/lower class.
housebuyer said
I agree in DC, NY, LA... there is a huge gap between rich and poor, but once you get out of these cities this is not as true.
Partly because in many of these cities housing costs never went up. And in the few that did we have seen massive corrections.
The housing bust has helped bring back the middle class lifestyle to the many who had no hope in 2006 (and the many who would have had no hope had prices continued rising.)
the Listing Agent of this property's own residence (at least on record) is being foreclosed - the original loan? $2M!!! I wonder where did all/most of that money go. Flipping properties and propping up the market that caused more distressed homeowners and foreclosures?
This is an overtly political report. The inflation adjusted income is up 20%, they did adjust for inflation in the income. It is up about 20% for the subclass of the middle class having familys with 2 children and 1 or 2 adults. For other categories it is much less. They then cherry pick 3 categories of expenses which have gone up a lot, but they omit lot of other things which have gotten a lot less expensive, with the average being that number we call "inflation". The report is geared to the pre-determined conclusion that the middle class is worse off, when in fact they are much better off.
TBW how does rich people making a lot more money impact the median price at all. They were above the median originally now they make more. Unless I am missing something this impacts the median 0%. The only way to impact the median for the middle persons income to have gone up and I don't think you believe the middle person is rich.
You are right my second link says the median is up ~10% in real terms and and the mean is up ~20%. I was thinking they were taking the real mean income gains. Either way there is no metric I can think of that says the middle class only makes 20% more now than they used too.
shamrock-
I agree completely I think they inflation adjusted the wages. Did not inflation adjust the other items and picked the items that went up the most. Maybe they should have looked at computers that went from 2K-0.5K over that time period..
If you inflation adjusted wages and they are up that means the people can buy more of the average basket of goods than they used to be able to buy
now, here's an attorney who lives in a luxury TH (which was gifted to him) in Courthouse (BROMPTONS AT ROSSLYN - assessed at $1MM+ just a couple of years ago), letting his other property fall into trustees sale for a loan of $455K on the same date he obtained the property through partial interests transfer for $285K.
this guy and the RE agent above - strategic foreclosure or 'genuine' distressed?
but, housebuyer, if everything else is up similarly
(adjusted for inflation as well) then they can still buy the same amount and are in no better (or worse) position.
I believe CNN adjusted all of the percentages for inflation. For example, see this report that indicates that real US housing prices (to 2007, and we all understand what's happened since then, of course) went up >50% since 1990. Real housing prices went up even more in certain other countries.
http://www.elconfidencial.com/fotos/global2809.pdf
I would guess that you'd be able to find sources for the other #s as well on the Commerce Dept. website or elsewhere.
These costs comprise an important part of many household budgets, so they weren't chosen arbitrarily.
The income for the top 2-5% of households has gone up dramatically more rapidly than has the income for other groups, so it's a bit difficult to compare median at time 1 vs. median at time 2. Much of the increase in household income in lower groups has come from the addition of more work hours (e.g., a spouse working part time has moved to full time).
You'll find many other sources suggesting the same conclusions that CNN does.
HB, It really is not correct to compare monthly payments on a long term debt in lieu of comparing the overall debt amount. There are many reasons for this - the most obvious is that one can refinance a 9% interest rate and get a much lower payment on a $150K house than someone else who bought a $250K house at the lower rate to begin with. A second is that most people don't own a home for more than 8 years but the debt is theirs no matter what. If they move, they have to repay it in full at the time.
So, I have carefully studied assessments for some of the areas I track. I believe county has done decent job at adjusting assessments in the right direction (lower). Some of the assessments have dropped significantly (over 15-20%)
Now, we need sanity in lending to not approve loans at crazy amount over the assessments. I am not saying assessments are exact indication of the prices - But, let's not go insane.
Hopefully, banks have learnt their lesson and you would think they have risk management practices built-in to their lending operations!!!
Having said that, knowing the moral-hazard problem caused by bail-outs - bankers may still think they are gambling in Vegas with tax payers money. So, we will see....
I randomly stumbled across these old "Where We Live" columns for Arlington from the early 1990s.
I must say they describe the various Arlington neighborhoods pretty much the same as you would now. Except, of course, the prices.
Charm has a certain price tag. There are seven houses available with prices ranging from $229,000 to $365,000, Anderson said.
One longtime resident, retired lawyer John Daugherty, said Ashton Heights seemed like an expensive neighborhood when he moved there in 1958. What he paid $25,000 for then, he said, today would sell for about $250,000.
"It's appalling to me," he said. "But it is a very good neighborhood, with good services and close proximity to the city. When I think what these places are now worth, I have to treat my house well."
Replace Arlington with Fairfax in the URL and you get a similar list of articles for Fairfax County.
Wunderbar-
By definition inflation is the amount the average basket of goods people buy goes up. So on average goods go up exactly inflation. Obviously some things have gone up more than inflation and something have gone up less than inflation, but the average good has gone up exactly the inflation amount
Ace-
I agree that you should combine some mix of house price vs. mortgage payment I don't think either by it self is a fair comparison. I am confused why everyone here is talking about income growth of the top couple of percent of people impacting the median income. I agree it impacts the mean income, but this is why I choose the mean not the median. The median is the exact middle person so even if the top people made 100 times as much money it wouldn't impact the median at all.
TBW-
Some of those articles are humorous.
tbw, that's an interesting link...
Very interesting. Perhaps the discrepancy comes because C-S only looks at SFH I believe...
FHFA: D.C. housing prices jump 10.5%
Washington Business Journal - by Jeff Clabaugh Staff Reporter
A government report says housing prices in the Washington area posted the biggest year-over-year increase in the nation last quarter, jumping more than 10.5 percent.
The Federal Housing Finance Agency says average prices in the Washington area were up 10.55 percent in the fourth quarter compared to the fourth quarter of 2008. It says average prices jumped 5.63 percent from the third quarter.
Nationally, FHFA says average year-over-year housing prices fell 1.2 percent.
FHFA calculates its Home Price Index using only Fannie Mae and Freddie Mac-acquired mortgages and excludes some foreclosure sales.
A separate report, the S&P Case Shiller Home Price Index, earlier this week reported Washington area housing prices in December were up 1.9 percent from a year earlier.
When broken down by states, the FHFA report saw price appreciation in Virginia was the second best in the nation, up 3.07 percent in the last year, topped only by Oklahoma’s 3.53 percent annual increase. Maryland prices in the fourth quarter were down 5.49 percent from a year ago.
oh oops and this metric is excluding some foreclosure sales (probably most). I believe C-S includes those, right?
TBW-
I think the bigger issue is that CS is supposed to be based on all houses not just things that have sold recently. It only uses recent sales to change their value estimates on all properties. If FHFHA is dealing with mortgage amounts they are only dealing with sold houses. So I would think the last quarter had far fewer people going for the 8k so the sales were probably skewed from lower priced houses to higher priced houses. So it is a mix issue not an actual price change issue.
HB, the median is less sensitive than the mean to outliers, but it's not entirely unaffected by changes in the distribution shape over time. Further, when you are talking about median salary or wealth, and particularly when you are talking about implications for housing availability, the superwealthy can crowd out the lower paid people with their buying power.
So while we may not agree on all the details, at least with regard to the main points that CNN is making, I think they're basically accurate.
It seems in this region that there are two different discussions.
1. Has income outperformed in certain areas.
2. Has the region, in general, outperformed.
I believe many studies have concluded that the middle and lower class has lost in terms of real wages, while the "rich" have gotten richer.
I suppose it depends on personal circumstances whether this is a terrible trend. I would suggest that most of you looking in N. Arl, Vienna, Oakton, etc. are not concerned by this disparity but only your personal financial desires.
Let's call a spade a spade.
Ace-
I agree that distributions changing can impact the median, but if anything the wealthier having a higher percent of wealth should lower the median. So the fact the median is still up means there is a real increase.
It sounds like maybe they inflation adjusted everything in which case I agree they are being honest although perhaps misleading. Although the fact they used housing prices from 2007 is a bit absurd seeing that housing prices are well below these levels also the average person did not buy a house in 2007 so the change in prices doesn't really impact their cost of living. My final compliant about this is that they comment that medical costs have gone up 100+%, which is absolutely true, but this should be counted as a increase in their wages. Seeing that most people have health insurance their employer is paying most of the increase in health care costs. Sure deductibles/copays have gone up, but this is pretty minimal compared to what the firms are paying.
I just find it very misleading when some says inflation adjusted your wage went up, but you should feel poorer now because some costs have gone up. (No kidding thats what inflation adjusting was supposed to account for).
regarding fhfa dc price growth ---
can you explain where have they got this 10% increase?
i look at this link and see nothing close to 10% increase.
http://www.fhfa.gov/Default.aspx?Page=215&Type=summary
tbw,
FHFA only includes conforming loans. I don't know how they dealt with the expansion first to $407k and more recently to jumbo conforming. But in any case, CS gets the whole distribution, but FHFA is weighted towards the entry level housing in prime instruments + FHA only. CS should capture all sales including those in cash (but not bought at auction which are specifically excluded).
city data
Konstantin,
yeah the city data looks nothing like that either. Its negative on percentage change and has been since Q3 2007.
(I can't find a chart with the raw numbers...)
Konstantin,
but if you use the HPI calculator
and put in Q42008 and Q42009 it gives a 10.5% increase in the price.....
I guess the other one must have been indexed to some given year....
konstantin,
I have no idea how they got that 10.5% figure. It sounds dubious and perhaps Cara has figured out the discrepancy.
VA Investor said
"I suppose it depends on personal circumstances whether this is a terrible trend. I would suggest that most of you looking in N. Arl, Vienna, Oakton, etc. are not concerned by this disparity but only your personal financial desires.
Let's call a spade a spade."
Wow.
Actually, HB, that's one way of looking at the health care cost data but another way is this. Many employees ARE paying much more of the cost (in $ and % terms) than they did in 1990. Further, the additional amounts that employers are paying on behalf of employees are not buying them more than what they (or their counterparts) had in 1990. This should NOT be counted as additional income in an analysis which attempts to show that employees have less available to pay for the typical middle class lifestyle than their counterparts had in 1990. They don't get more for this additional expenditure. The analysis supports CNN's point -- many people are paying more (or working longer) to get the same lifestyle, or have had to sacrifice some other aspect of their lifestyle (e.g., a parent who was at home or wanted to be at home now is in the workforce).
I don't know what measure of inflation was used but there have been many criticisms of certain widely used measures, e.g., that "rental equivalent" is used rather than true homeownership costs.
I also don't know whether the analysis examined the drop off in quality of many goods purchased. Appliances are much cheaper today, for example, but they don't last 20 years as they once did. Clothing and furniture are also less expensive but shoddier. I supposed it's impossible to compare apples to apples in these types of studies, since there is some subjectivity involved.
LJJ-
I think that is a fair comment. She is not saying all of us are evil, but instead that in general most people care about their own circumstances more than other peoples.
The rich generally don't like that they have to subsidize the middle and poor class.
The middle class thinks the rich should have to pay way more taxes to subsidize everyone. The middle class also thinks the poor get too many subsidies.
The poor think the rich should pay more taxes since they have lots of money they don't need.
Obviously not everyone falls in these categories, but at least generally from the people I know a lot of people do. I don't think it is fair to make VA_Investor sound like a mean person for saying this.
Ace-
You are correct that health care costs have definitely gone up over this time for individuals. I was just trying to get at the fact that individuals have been at least somewhat shielded from the full cost of the increases.
I do strongly disagree with you that the additional cost does not buy you more now than you got in 1990. I think health care is one of the places that has seen the most advances since 1990. Drugs like Lipitor, HIV medicine, Viagra... have given people much longer and happier lives.
You are correct that some things have gotten much worse like appliances, but many have improved and become cheaper (computers, TVs). I think cars have also improved in quality, safety, and MPG over this time. So without an in depth study it is difficult to determine if quality has improved or gotten worse over the decades.
Wunderbahr, Shamrock
This is a long video, have a coffee
in hand before you watch it, but,
really consider this before you
put on your Political Blinders.
Liz Warren was a hard core Republican selected to sit on the Bankruptcy commission, and she said all of the popular wisdom is foolish, and that
we will soon see America with no Middle Class
http://www.youtube.com/watch?v=akVL7QY0S8A
housebuyer,
Sure, some of the increased premium cost comes because we have more medical technology and prescriptions available to us.
You could also argue that colleges cost more because they offer nicer services. Whenever I read the alumni magazine I read about new dorms, new classrooms, new sports arenas, new Center to Study such and such, new major faculty hire, etc. I do not doubt the above inflation increase in tuition at Virginia's state colleges has gone toward something. And of course some of the higher tuition goes toward replacing declining state support.
And the consequence of both of these has been more people are uninsured and the student body at state colleges skews wealthier and wealthier.
Maybe I'm misreading you but I don't think the answer is to just wash our hands of it. Clearly we either need to subsidize both more or we think hard about maybe not requiring health insurance to cover these super-expensive new medical procedures/drugs and whether colleges really need all these bells and whistles.
What is Middle Class?
It's not just a statement, it's a lifestyle. My Father was a computer programmer for an Oil company in the 60's, before that he worked for an Auto Company and before that he was at Boeing.
He worked a lot, but we lived about a mile from the train station, so he took the train. We went to good schools. My parents had a 3 BR 1.5 Bath Ranch House. They had 1 car
and a 1 car garage.
The lot was small, but it seemed enormous when i'd cut the grass.
At least until I was in School Dad could let Mom stay at home and still provide for us.
That was Middle Class. I went to school with kids who'se parents were Dentists, Doctors, Lawyers, Carpenters, Welders, painters, Steel workers, butchers, dry cleaners.
Dad drove an AMC Rambler.
We had a decent sized Color TV, I think it was a 22" model from Zenith. Weighed a ton, i hated when Mom wanted to spring clean because my Brother and I had to move it so she could vacuum under it.
We had some consumer stuff, a Slide Projector, 2 35MM Cameras, a Super 8 Camera and projector, a Fisher Stereo/Turntable/Receiver (Took 5 minutes to warm up).
That was pretty much it.
That was a lifestyle my classmates lived with parents who were in construction, teachers, professors, car mechanics.
Sure some of the kids in the neighborhood had parents who were VP's downtown, but, across the street, the couple He was a College Professor. Down the block was one of my Elementary school teachers.
Across the way Ricky's dad cut meat at the Packing plant.
I had a classmate who'se dad was blown up at the Oil Refinery.
That lifestyle is dead.
How many people on a single median income can have a house, in a nice area, a mile from metro, with good schools, raise 3 kids without privation?
We had people living in the neighborhood, one girl, her dad was a dry cleaner. He worked, her mom did some laundry, she went to our school.
How often does that happen now?
TBW-
I agree about college they spent a ton of money building new buildings and top of the line research centers. They probably could do without these, but I actually am not opposed to spending to enhance the college experience as long as the schools can give the students the aid they need. Rich schools are able to do this, but poorer schools don't have the funds so I am not sure whether I would rather have schools that are more expensive with better technology and more professors or schools that are more affordable for the middle class.
How much money should be spent on medicine is always a touchy subject. I agree spending several hundred grand to give someone with cancer an extra month or two may be bad for society and just plain too expensive, but where do you draw the line. Spending a couple grand a year for Lipitor or HIV meds, which could extend your life for decades sounds reasonable to me. Personally I am fine living in a smaller house and eating out less in order to possibly have medicine, which could substantially extend my life. I guess it just depends on peoples values.
As an interesting side note I was reading recently about some of the top medical inventions this decade and they were talking about advances in treating wounded soldiers. Apparently around the turn of the century there was close to a 1:1 ratio between wounded and dead soldiers. Medical advances in handling wounds and infections has increased this ration to 7:1.
Pat-
That lifestyle is available in most of the country. Although it is hard around expensive cities, I think the bigger issue is that people want more stuff than they used too. As you said you had a single 22 inch TV and probably didn't pay for cable. Now a similar family wants 2-3 tvs that are 40 inches with cable and video game systems. Every kid needs an ipod, a cell phone, and a car on their 16th birthday. Lets not get into the fact that everyone buys SUVs, which 50%-100% more than a smaller car or a minivan.
The life style you talk about sounds exactly like my Uncle raised his kids. He worked at Safeway for 30 years his wife worker ~5-10 hours a week as a maid. They have 4 kids and live on a couple acres in rural PA. I don't know how much he makes, but it couldn't be that much and his family was never lacking anything. So I think the issue is cities and keeping up with the Jones' rather than an unaffordable middle class lifestyle
HB, I think you are still missing the point, to some extent. To buy the best technology and health care available in 1990, employees and employers paid FAR less than they do today for the best technology and health care today. They also have to get approval from providers, may have to accept lower quality and quantity of service and less choice in ADDITION to paying more. For example, people are released from hospitals much more quickly after a major surgery. And there are many, many more people without health care insurance today. If you are lucky to work for the fed. govt. or another generous employer, you don't feel the impact of these changes nearly as much as many other people do. So obviously, there is no question that some health care technology has moved forward, but you're dismissing the more important point about both the reductions in care AND greatly increased cost, for the average person. We have the highest per capital health care costs in the world but rank only 37th in terms of health care outcomes.
In academia a lot of the increased cost goes for financial aid for students who are academically qualified but have substantial need. In many of the top private schools well over half of the students receive a significant portion of financial aid.
HB, I really encourage you to investigate the data further. It is not simply a matter of subjective opinion.
huh,
my healthcare plan costs about 15.5k a year for a family with a child.
75% of that is paid by employer, but so what. every doctor's visit has a copay. i understand, that this is insurance, so it can cover things like cancer treatment/major surgery/diabetes, etc for some of my fellow employees and costs balloon for these treatments, but i'm not sure if the price to quality ratio of servives is really good in the hospitals and insurance companies these days. i strongly believe that there are major inefficiencies in this business, that cost me a ton of money.
regarding middle class lifestyle --- i tend to agree that median income will give you all the things pat described in most of the country. in major city it will mean a longer commute and probably a townhome at best, but this is a quite typical set up in the major metropolitan area with large population density. i also think that there is a sort of imbalance between availability of jobs, career growth and culture vs. the cost of living, sometimes you get a lot for you dollar, sometimes not too much. i would say that washington area is a little bit overrated in this regard. and it is very tough on uneducated people.
HB
Stop drinking the Right Wing Coolaid.
I would suggest you watch the Warren video.
Yes, I have way cooler electronics then when I was a kid, but guess what, it's a way smaller percentage of my income.
Clothing? Cheaper.
Electronics? Cheaper.
Travel? Cheaper.
As Liz Warren says, 3 things cost a lot more, 2X more. Housing, Education and Medical Care.
Those are the big ticket items.
Ace-
I assume when you say to research the topic more you are talking about health care not education right? That is a good catch about financial aid I didn't think about that and you are correct. I am pretty sure at my school the average student paid ~20K/year and the education cost ~50 with the rest coming in the form of financial aid and endowment spending.
I agree that our health care system is a mess and should be simplified to cut out a lot of the administrative costs and provide insurance to more people, but I didn't think this has changed that much over time. Maybe I am wrong, but I thought that a lot of the increase was do to the massive research budgets of pharma and biotech companies. Obviously if these companies stopped researching when drugs and equipment went off patent they would become much cheaper. Part of the reason that our system is so expensive is we do most of the worlds medical research and we sell them the medicine cheaper than we sell it too ourselves (I have always been a little confused on why we do this.) So as I said I agree we need changes and maybe I am misinformed, but where do you think all the money is being wasted that wasn't being wasted 20 years ago.
The last couple of comments I have is yes people get kicked out of the hospital faster than the used to. Part of this is bad and part of it is due to modern medicine is less intrusive so you need less time to heal. Have you seen someone scar from an appendectomy recently they aren't even an inch long. Finally we are only 37th best if you are financially constrained. Our system is based on money not on equality. If you have money the best doctors & surgeons in the world are in the US if you don't have money you get bad treatment. I would like to see people without insurance get better treatment, but by no means so I consider this treatment a god given right.
Does anyone here think that employers' paying half of SS and subsidizing health care doesn't come right out of THEIR paycheck?
VA-
Yes I know it is coming out of my paycheck, which is why I was saying that this is part of the increase in pay over the last 20 years.
Pat-
Do you really think I am super right wing? I have voted for a whopping 1 Republican Presidential candidate in my life. Don't you always say I am crazy for wanting the government to bail people out isn't this the exact opposite thing the Republicans want?
On housing I agree with you it was super expensive last decade, although this has been corrected in many parts of the country and continues to be corrected in others. So luckily this one will likely be less of an issue going forward.
Education-
If you are from a wealthy family I agree it has become much more expensive; however, if you are from a poor family I think it has become cheaper. Financial aid is far more available now than in the past. Most of the ivies let you go free if your family makes less than ~50-60K and they substantially reduce tuition if your family makes under ~150Kish and they no longer make you have any loans as aid. Many other schools have similar, but slightly less generous programs. So yes wealthy people pay more, but good students from lower means don't pay more.
Medical care-
Yes this is a problem, it would be great if we could make medicine cheaper particularly the administrative part and the part related to malpractice issues. We could also reduce spending on terminal patients. I don't want to decrease spending on research, because as I said before we are leading the world in this field
Dartmouth has already had to curtail its financial aid policies. These programs also were of recent vintage (2007-08) and limited to the top private schools. So these programs are mostly irrelevant to the average family whose child will be deciding between a state school and non-Ivy private schools without such programs. Those choices are more and more unaffordable to the average family.
HB
One does not have to be a Registered Republican to drink their Kool-Aid.
Don't worry, they lie so efficiently, and easily, it's almost a full time job to track their lies.
1) Health Care: What makes health care a market good? When you are sick, do you price shop the Ambulance? When the ER Doc says "We need to take an X-Ray, do you say 'Woah, doc, I can get that for $20 at the Rite-Aid, so I'll just dart over get that and come back'"?
Now the right wingers throw out the line that Health Care is a commodity, when it's not.
I can price Grain, and I don't need 2 tons of grain on 22 minutes notice.
Drugs: The Right wing lie is that drugs are expensive because of R&D.
You utterly swallowed that. You've said that 3 times. You think that
probably 75% of the cost of a drug is the Corporate R&D.
http://www.pfizer.com/investors/financial_reports/financial_report_2007.jsp
page 39
take a look $11B to buy the drugs they sell, $15B to Market the drugs they sell, $8B to do R&D.
you want to double Drug Research? Ban Advertising for drugs, Limit sales Budgets to 5% of Research.
HB
Is that a swig of koolaid for you?
But Pat, you can't shop around for an ambulance. Or effectively compare prices for almost any health care provider services. Most people have to go to the doctor or be admitted to the hospital and then find out how much it will cost.
I believe that one key component of health care reform should allow the average consumer to shop around and compare standard medical services in addition to the primitive rating systems now beginning to be available on the internet.
I'm not talking emergency medical services, but rather being able to shop and compare rates for dentists, pediatricians and other services that are scheduled days or weeks in advance.
However, I don't think that will happen.
Which may have been the point you were making too.
c-
I think pat agrees with you, he was arguing that I am wrong.
Pat- I never said that I thought that R&D was anywhere near 75% of the cost. I am not sure why you would put those words in my mouth. I would promise you I know the cost break down for nearly every better than you, seeing it is my job to know this. My comment was that I would not want to decrease R&D spending. I know many people are opposed to how much drug companies advertise, but as you said it is bad that consumers get no choice. Well the fact pharma companie advertise their product allows educated consumer to hear about the products and do more research online, which is one of the few places that people can influence their care.
In reality the main reason that I don't want the government involved is they mess up nearly everything they get involved in and I have no faith they could take on health care one of the most complicated economic topics and do anything successfully. Sure they should mandate electronic records, make more price transparency, and try and lower administrative costs, but I just don't think it will work out well if they do more than this.
TBW- That is interesting I hadn't seen that yet. Although it still says no loans for families making under 75K, which is way above median. I am pretty sure aid has been increased at the state school level also, but I might be wrong.
On Healthcare;
I don't know what proportion comes from ER visits, but what I've seen over the years is shocking.
People who are on medicaid (I'm making a presumption based on observation) have their kids in the ER for simple coughs and colds. They have no other place to go. Imagine what we (the gov't) pays for these services.
I believe that we need more "clinics" and that there should be triage and diversion to adjacent/nearby clinics for patients not needing ER/Hosp. care.
This is the same for people with no insurance. IF emergent care is required, then by all means - but I don't see waiting rooms crowded with true emergencies.
ER's are used as "ordinary" medical care.
c?,
As to college aid, it is true that many endowments suffered massive losses. My son goes to an Ivy that has both state and endowed schools. Recently we were told the there would be a transfer of funds from the endowed schools to the state schools to offset decreases in state funding. Not sure about overall aid. Just glad we only have 3 semesters to go!
VA-
On the insurance yes that is a major problem. Clinics will not take uninsured people who can not pay, because they don't want to lose money on the patients. Emergency rooms on the other hand will give you service no matter what and they just pass on the cost to those of us who pay for medical (tax payers and people with insurance)
hb,
I think a decent portion are "medicaid" which clinics should take.
Va Investor I had a bad cold/flu during the snow storm and went to a CVS. I asked the pharmacist what was the best over the counter for what I had and she told me to stop at the "Minute Clinic." It was about 10 paces away in the store. There was one person ahead of me with 2 kids both of whom had hacking colds. The nurse asked if I could wait a few minutes while she took the kids temperatures and checked their throats for strep. In about 5 minutes the mom and kids left and the mom took prescriptions over to the pharmacy and had them filled. The nurse checked me and told me I was a little sicker than I thought, told me what to take and told me what to do if my symptoms worsened. My time from talking to the pharmacist to leaving the store was about 15 minutes. The charge to see the nurse was $20. I was really interested in it, and the nurse told me they are usually swamped but that the snow was cutting down on patients. She said they get a lot of kids and people with cuts and burns who aren't sure if they need to go to the ER. I thought it was a great service but I didn't know anything about it.
For TBW: When I graduated from an Ivy, they gave me a "welcome to the development fund" letter. I have been sending money since, despite my student loans. I saw plenty of kids at my school who deserved every bit of financial aid they received, and I believe strongly in our endowments. I also saw plenty of waste, particularly for tenured faculty who were pretty lazy.
cb,
I think that CVS thing is a terrific idea. Wasn't the AOL guy involved in getting that rolling? My husband has used it.
I am not allowed to talk about medical care costs because it spikes my blood pressure. Having spent a career in medicine, let's just say our system is a wasteful mess, and the biggest problem is malpractice lawsuits, not pharmaceutical research and certainly not ER care. On a more positive subject, an alternative to ERs used by many poor people in Arlington and the surrounding areas is the Arlington Free Clinic. I have been part of it from the beginning and it does more to help people than all the jawboning that has been going on about medical care. If you have some extra dollars, always try to send them to your local free clinic. They actually are cost effective and keep people out of expensive ERs.
reecon,
re: bloodpressure
Hence why I'm unsubscribing from this bucket. I highly recommend it.
I'll only jump in here to shout out a big "hear hear" to the CVS minute clinics.
I pick them over my child's pediatrician every time we have a routine problem (ear infections or possible bronchial infections). There's no *interminable* waiting, and the nurse in our local CVS is top-notch.
Just one quick addition to the medical discussion- While there are some interesting aspect to alternative delivery methods (e.g. minute clinics etc.) the biggest problem faced is unsustainable medical expenditures as a portion of GDP. Partly this is just overutilization. I would submit that almost all of those visits to minute clinics were for conditions that were going to improve without ANY medical care. This is really part of the problem, not the solution. (And, yes, I am a physician, I do know something about the issue).
eponymous I dont' want to spike Cara's high blood pressure by prolonging this bucket, but a big "hear, hear" to you. As with food, gadgets, and other stuff, the U.S. overuses health care resources. The old "take an aspirin and call me in the morning" maxim had a good deal of validity.
Eponymous,
I realize that ear infections and strep throat would probably heal without antibiotics, but it's a lot of suffering.
A friend of mine tried to wait it out with her son until his skin started streaking as he was apparently developing scarlet fever.
I agree with you about over-utilization -- but in our case we use minute clinics perhaps once or twice a year at most for our whole family. We under-utilize the doctor's office because we don't like to waste our time or theirs. Of course, co-workers are definitely over-utilizing the doctor, so our corporate insurance is likely higher anyway.
Do you recommend incentives to prevent over-utilization? I can't think of any except for people having to pay a little something for non-emergency visits (as they would do to maintain their vehicles).
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