September 2009

Money shotIn spite of all the legal investigations and media scrutiny, a lot of mystery remains in the Bernie Madoff case. How did he attract so many investors and inspire such trust – even awe – in what turned out to be a financial shell game?

He was wildly successful for one big reason, according to David Krueger, a psychiatrist-turned-coach and author of the book, The Secret Language of Money. Madoff was able to make his clients feel special.

“There are dozens of money mistakes and financial fallacies that we embrace because of the way our brains work,” Krueger recently told “One that applies to Madoff is exclusivity, the desire to be special or chosen …”

“Madoff appealed to people’s desire for status by offering them membership in his exclusive club. He would turn down wealthy people. One investor said you had to go to him, he wouldn’t come to you, and the first few times he said, ‘Not yet.’ Finally, when he did say yes, they would give him every penny.”

He had also built himself up into a trusted authority figure, Krueger adds, via his leadership of NASDAQ and his reputation as a philanthropist. “We tend to idealize people who portray confidence and manifest wealth, in hope we may participate in some of their glory.”

For more on the psychology behind the Madoff fiasco, see Krueger’s column, What Can We Learn From Madoff?

When it comes right down to it, the cash we take out of our pockets every day is just a bunch of paper. Still, it represents much more than just what it can purchase in goods and services, Krueger argues.

“We use it to measure success and buy happiness — or try to. We use it to bolster our self-esteem. We use money to communicate. Money language mirrors the unspoken self.”

But it’s not always about the Benjamins.

For example, when couples fight about money, the conflict may not actually be about money, Krueger points out. Other issues “hitchhike on money” because financial problems are more tangible, he says.

In other words: Money really does talk, but it doesn’t always say what we think it’s saying.

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I wrote last week about my disgust with the Obama Administration for advocating sin taxes on soda. I wasn’t defending the wonderful health benefits of Coke, Pepsi and Dr. Pepper. I just don’t like the idea of the government sticking its nose into every nook and cranny of human behavior.

I ran across this post in that explains the issue better than I did.

And while I’m still on the subject, why not put a special tax on ice cream as well? In fact, this is a product loaded with both sugar AND fat – so maybe we ought to make it a controlled substance.

It would bring a whole new meaning to the word when a cop shouts: “Freeze!”

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No cell phone zoneUnemployment, downsizing and even company reorganization can trigger mental health issues among survivors who maintain their jobs. But is the culprit just plain vanilla insecurity, or is it something deeper?

The debate has arisen in France, where one of the country’s largest employers, France Telecom, is in the grip of a suicide epidemic within its ranks.

A total of 23 employees have killed themselves over the last 18 months, including a 32-year-old woman who recently jumped out of a fourth floor office building in Paris. She was in the debt collection division of the company, which employs about 80,000 workers.

The company has shrunk by about 20,000 positions over the last three years, and restructuring of the remaining workforce has caused a lot of unease.

The Telecom chief financial officer tossed out another explanation this week – stress caused by the 24/7 “connectedness” of workers. He blames pressures that have built up in the corporate culture of the Blackberry, email and other high tech communication devices.

“Today for people working in business, whatever the level, whether they are CEO or even first- or second-rank level employees, they are always connected,” Gervais Pellissier told Reuters.

The company’s 20,000 managers were holding meetings with workers to assess the suicide problem, and try to find some answers. Telecom observed a moment of silence in honor of the workers on Monday.

The union that represents the workers boils it all down to job insecurity.

The answer may be that both problems play a role. In one sense, high tech communication makes a job less stressful because you can be more productive. Accomplishing tasks with less effort would seem to reduce stress, not increase it.

On the other hand, being “always on” allows no time for a battery recharge. That’s even more true in the U.S. than in France, where workers get six to eight weeks of vacation, compared to one or two weeks here.

Companies are always going to be restructuring and resizing their workforce in order to fit economic conditions. The key is to provide people with as much information as possible so they don’t feel like they are adrift in a disorganized sea of chaos.

The solution to the BlackBerry and email problem is potentially much simpler, in my view. Because all of these gadgets come with a built-in stress reducer. It’s called an off button.

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Should the government try to tweak human behavior so that the population becomes more fit? That’s one of the questions emerging from the health care jabber in Washington, starting with President Obama and on down to the new head of the CDC, Tom Frieden.

Frieden, formerly New York’s health commissioner, along with Mayor Michael Bloomberg, have been trying to alter unhealthy habits in the city for years by banning trans fat in restaurants, pushing companies to restrict salt in their products, and trying to eliminate public smoking.

The idea of putting a heavy tax on soda – which adds up to $3 per case – is that by cutting consumption, kids would get less sugar and trim down. It’s a direct way to attack the obesity epidemic.

Obama has been talking a lot about personal responsibility in health care issues, and this fits right in. He admitted in an interview with Men’s Health magazine that he still “bums” a cigarette once in a while, but I guess that’s OK because he’s president and under a lot stress.

“I actually think it’s an idea that we should be exploring,” he told the magazine. “There’s no doubt that our kids drink way too much soda. And every study that’s been done about obesity shows that there is as high a correlation between increased soda consumption and obesity as just about anything else. Obviously it’s not the only factor, but it is a major factor.

“Obviously there is resistance on Capitol Hill to those kinds of sin taxes. Legislators from certain states that produce sugar or corn syrup are sensitive to anything that might reduce demand for those products. And look, people’s attitude is that they don’t necessarily want Big Brother telling them what to eat or drink, and I understand that. It is true, though, that if you wanted to make a big impact on people’s health in this country, reducing things like soda consumption would be helpful.”

Taking on public smoking is one thing. It’s an activity that really does infringe on someone else’s “space.”

But taxing soda is an idiotic idea. Are they going to tax regular soda but not diet soda? If they make an exception for diet soda, isn’t the government then encouraging the consumption of artificial sweeteners?

The new goal in Washington is to fine people for engaging in any kind of unacceptable behavior, whether that’s being without health insurance, smoking, drinking, or eating fast food.

I wonder whether Obama, Frieden and their underlings are really that worried about the personal consequences of risky behavior in Americans, or whether they just don’t want their cronies in the insurance industry to pay out more money to fix health problems that MAY have been caused by certain habits.

Obama says he understands that people don’t want Big Brother telling them what to eat and drink. I beg to differ. Apparently he doesn’t understand that.

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Binoculars“June! I’m home!”

Ward Cleaver speaking there, on arrival from the office. June is in the kitchen putting the finishing touches on a delicious home-cooked meal. Wally and the Beaver are sent upstairs to wash for dinner.

Soon they’ll all be enjoying a wonderful family dinner while they chat amicably about their day. Ward is still wearing his suit.

Fact: Both boys sailed through adolescence with no problems whatsoever. Oh sure, sometimes they were confronted with minor ethical questions and relationship problems with rascally friends. But their record was, overall, spotless.

Fast-forward to 2009. Kids are knee-deep in psychological problems, juggling varying combinations of anxiety, depression, eating disorders and peer pressure. We’re not in Mayfield anymore.

But a University of Illinois researcher says public policy makers can help put the toothpaste back into the tube by encouraging family meal times.

“Most people don’t think of family meal times as a policy issue, they think of them as private events,” says Barbara Fiese, a UI professor of human development. “But sometimes policy makers work against the best interests of families.”

A university news release points out that:

– Teens who eat five or more meals a week with their families are less likely to smoke cigarettes and marijuana and to abuse alcohol.

– Children who take part in regular family meal times have greater vocabulary growth and higher academic achievement.

– Frequently shared mealtimes protect against obesity in children and eating disorders in preteens and adolescents.

– For young children, family meal times mean fewer behavior problems.

– Teens who dine regularly with their families eat more fruits and vegetables.

– Meals prepared at home tend to be lower in calories and fat than restaurant fare.

How can policy makers actually effect this kind of change? Fiese says communities should launch educational campaigns, through schools for example, to stress the importance of family meal times.

Zoning laws could help pave the way for stores to offer healthier fare, instead of convenience and fast food stores that peddle junk food.

“Because of the advocacy of behavioral and social scientists, people have learned to wear seat belts and bike helmets for their own protection,” she says. “Now it’s time for policy makers to promote family meal times as a proven way of protecting your family’s health and well-being.”

All well and good. But here’s the real problem. The middle class is now stretched so thin – each parent sometimes holds down two, maybe even three jobs – that planning a family meal time is virtually impossible. It’s a squeeze play that gets worse by the year because we have an economy that has ripped the middle class to shreds.

We need to have our unbalanced economy mended before we can have this kind of social healing take place. And it’s hard to be optimistic about it because that ship set sail so many years ago, and keeps drifting further and further from land.

If you had a good pair of binoculars and focused in on the fading shoreline, you might see the Cleavers waiving goodbye.

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While here in the U.S. we are arguing over public financing of the most basic forms of health care, a new medical issue has come up in Britain – public financing of heroin for addicts.

A group of “drug experts” appointed by the government proposes to open up “shooting galleries” in which addicts could get a fix compliments of the taxpayer. The cost is estimated at about $25,000 per year per addict.

Heroin is one of the most dangerous drugs on the planet, and governments ought to be concentrating their efforts at getting addicts off of it. But there’s also an argument to be made for getting drug use off the street by folding it into the medical treatment system.

The National Treatment Agency for Substance Misuse sees big benefits in crime reduction and street drug dealing if the heroin use takes place under the watchful eyes of health care providers. The idea is based on similar programs in Switzerland and France. There has also been a pilot program in operation in Britain since 2005.

The approach “medicalizes” the heroin addiction issue and takes it out of the arena of social rebellion and into the hospital. It also means drug addiction would no longer be a matter for prisons to grapple with.

In an editorial on Monday, the UK Independent said: “Though the clinics have helped to improve the health of local addicts by providing clean needles and a safe environment in which to shoot up, prescribing heroin in clinics is not a ‘treatment’ for addiction. Its primary purpose – and, as we have seen, effect – is to minimize the social harm that heroin addicts inflict on the wider community.

“Yet a reduction in crime and anti-social behavior is not to be sniffed at. Britain’s hard core drug addicts are believed to be behind three quarters of all acquisitive crime in the UK. The potential gains here are obvious. Moreover, if shooting galleries were accompanied by a beefed-up drug rehabilitation service, there is every reason to believe that general addiction levels would also begin to fall. Such an approach would certainly be expensive, but the cost would be more than offset by a fall in the criminal justice budget.”

A recovering heroin user and supporter of the drug facilities told the paper: “If you encourage people to go to a shooting gallery where they are prescribed diamorphine (pharmaceutical heroin) on a regular basis, it becomes a mundane sort of workaday experience.

“People think if you give a heroin addict heroin then they’ll be on it for life, but in fact many do decide enough is enough.”

I’m sure there’s opposition to it in Britain, and rightly so. There is something unsavory about the use of tax dollars for this type of program. But it appears that Europeans can talk about controversial health care proposals without having opponents of them begin foaming at the mouth.

Talk radio and cable pundits would be apoplectic if an idea like this floated out of the Department of Health and Human Services in Washington. Outrage has become a media preoccupation and a cottage industry in the U.S., not only in health care but in practically every other social and cultural issue.

As Joan Rivers used to say: “Can we talk?”

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I originally had no intention of watching President Obama’s health care speech on Wednesday night. But when I flipped on the set there he was, framed by Joe Biden and Nancy Pelosi. The man gives a good speech, and I enjoy watching the delivery.

But he ended up doing just what I feared he’d do, which was to weasel out on the public option. Folks, flexibility is a fine attribute, but at a certain point it comes into conflict with the concept of leadership. Some compromise is a given, but the word compromise should not be confused with the term sellout.

Liberal commentators crowed about the speech. CNN’s Paul Begala said he loved it.

“It rallied dispirited Democrats, reassured disenchanted independents and intimidated Republicans,” he wrote. “He called a lie a lie, and pledged to call out the right-wing thugs if (well, when) they continue lying.”

I didn’t find much reassurance, and I doubt sincerely that Republicans were intimidated. This is a group so skilled at creating organized opposition, they’re practically still running the country in spite of a minority status.

Before the debate on health care started, reformers talked about fundamental change. Even Obama suggested that a single payer system might be best, but he realized it was politically impractical for many different reasons.

The public option was considered a compromise. That way, people could keep their health care insurance if they liked it. And the public option would provide some competition to the private sector, perhaps lowering premiums.

But it wasn’t long before Obama started compromising on the compromise. And in reality, what do we have left?

The latest proposal is for a “trigger” to be inserted into the reform bill. It would create a public option (or something like it) if private insurers don’t cough up the cost savings we need, while expanding coverage to the 46 million Americans who don’t have it. All this does, in my view, is kick the can down the road.

Obama should be putting pressure on Congress to approve key elements of his health care vision. That can be accomplished through public statements as well as backroom arm twisting.

At the end of it, though, he ought to force a vote on a real reform plan by promising to veto legislation that goes wide of the administration’s goal posts. We keep hearing that something is better than nothing, but that’s not true.

A “win” just for the sake of bragging rights in health care reform puts Obama and the Democrats in the same partisan political boat as the Republican opposition. Each side wants to say: We got the job done. But in either case, the American people are left empty handed.

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The unemployment rate checked in last Friday at 9.7 percent, but let’s toss that aside and talk about the real rate – 16.8 percent. That’s the so-called U-6 rate that includes people on unemployment, those whose benefits have run out, people who’ve given up, and people who are working part time for economic reasons.

That’s the national rate. But there are pockets where things are far worse, such as California. There, according to the San Francisco Chronicle, 40 percent of “working age” Californians are unable to find a job. The figure comes from a Sacramento-based research group called the California Budget Project.

Unemployment rate graphThe organization published a 19-page Labor Day Special Report that notes: “The current recession stands apart from prior downturns for both the depth and breadth of destruction in the job market. California has lost more jobs at a faster rate in the past two years than during any prior recession for which data are available, and employment has fallen in nearly every major sector of the economy.”

The report predicted that the state’s unemployment rate would remain in double digits through 2011, and said even a return to modest GDP growth would likely result in a jobless recovery.

Now, for the health implications. Another Labor Day report published by Rutgers University based on a survey of long-term unemployed, as well as newly unemployed, warns that a tidal wave of related mental-health problems are washing over the nation, from coast to coast.

“Three-quarters of the still jobless report stress in their daily lives, two-thirds report being depressed, three-fifths feel helpless, and more than half say they’re angry,” the report said. “Significant numbers report having trouble sleeping, avoiding social situations, strained family relations, and increased substance dependency.”

The report (full release can be downloaded here) was based on a “scientific sampling” of 1,200 Americans unemployed and looking for work over the last 12 months.

The 894 who were still out of work at the time of the survey were described as “shaken, traumatized people coping with serious financial and psychological effects from an economic downturn of epic proportions.”

Carl Van Horn, director of the John J. Heldrich Center for Workforce Development, which conducted the research, said: “Millions of unemployed Americans are suffering economic and personal catastrophes. This is not your ordinary dip in the business cycle. Americans believe that this is the Katrina of recessions. Folks are on their rooftops without a boat. The water is rising, and many see no way out.”

More than half have borrowed money from relatives or friends. A quarter have missed mortgage, rent or credit card payments. Half are optimistic – but half are pessimistic – that they will be able to find a new job.

More than a quarter of those laid off were earning more than $75,000; an equal percentage had at least a four-year degree.

It’s fair to say that many employed people are nervous about what may happen next.

Unemployment issues have been mostly discussed in the media, and by elected officials, in economic contexts. I think it’s pretty obvious that they should become part of the health care debate as well.

Graph: Bureau of Labor Statistics, September 4

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dog injusticeFeel like you’re getting the short end of the stick sometimes? You’re at work and figure heck, he’s getting paid a lot more money than I am. Why should I go out of my way to get this project done?

This is baked-in human behavior, according to a September article in the American Psychological Association’s Monitor on Psychology. Researchers have discovered that other primates like Monkeys and dogs will “go on strike” if they determine that they’re being treated unjustly.

In a look at a compilation of studies, psychologists said dogs that were normally happy to “shake paw” with humans refused to do so if they noticed that another dog was getting treats for interacting, but they were getting nothing.

“Pay one monkey with a delicious grape and another with a ho-hum cucumber for the same amount of work, and the monkey who got the lesser reward will probably quit working for you,” The Monitor reported. “He may even throw the vegetable back at you.”

The conclusion is that animals dependent upon cooperation for survival develop a sense of fairness that is passed on from generation to generation.

Marc Bekoff, a professor of evolutionary biology at the University of Colorado at Boulder, has been studying this kind of behavior in wolf packs.

“The fate of a wolf or coyote pack can really hang on whether an individual pulls its weight,” says Bekoff. “These animals learn not to tolerate unfairness.”

Reserchers have hit on another trait universal to humans and animals, and that’s generosity. For example a monkey, given a choice between bringing a marshmallow to a fellow in the next cage and an apple, the marshmellow will be chosen more often. And for no apparent reason.

This should be viewed as a hopeful sign for all of the more socially developed species. People can’t always be counted on to do the right thing. But the good news is that it tends to be part of their nature.

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The health care reform debate is focused on the 47 million Americans who have no health insurance. But how many people who are insured have bogus individual policies that pay little or nothing when push comes to shove?

I’ve seen the signs myself as I drive around town – health insurance, $100 month. Full coverage. What you have to remember is that “full coverage” is a meaningless term; it has no legal definition. (For the same reason I still see “Cash for Clunkers” ads on TV for car dealerships – nothing stops them from using the term even though the federal program is over.)

It’s wise to fall back on the old adage: If something sounds too good to be true, it usually is.

The latest cautionary tale comes out of California, where a woman received a $73,000 hospital bill after being bitten by a rattle snake. Not a big problem, she thought, I’ve got health insurance.

But then she found out that the policy only paid $3,000 toward the expenses. Why? Because in the fine print, the policy capped hospital reimbursement at $3,000 per day.

She told a reporter: “I’m probably a typical insurance purchaser. I believed what I was told by the person selling it to me.”

On paper, the policy didn’t look bad. The $281 monthly premium actually sounded reasonable for single coverage. The $500 deductible is pretty standard. It even capped hospital expenses overall at $50,000. But then there was the fine print….

Since elected officials insist on pursuing insurance-based health care reform, putting more enforcement teeth into regulation seems worthwhile. The simple guideline should be that people get what they pay for, and sign contracts written in clear language without a lot of fine print.

Meanwhile, there’s the Coalition Against Insurance Fraud, which offers tips and an electronic newsletter to help people pick a policy that actually provides some benefits.

This is not a broad indictment of the insurance industry, by the way. The Coalition is a group that includes insurers, consumers and government watchdogs. This comprehensive article in Forbes magazine from 2008 has more details on trends in this area. I suspect the situation has gotten worse, not better, as the economy has deteriorated and people scramble for coverage.

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