The Misery Index

When I first started my business in 2009 I had a working theory of why I’d be successful, at least as far into the future as I could predict: no one else will be willing to live like I do to beat me on price.

Other web professionals seemed almost decadent in their desire for the usual working wage. I, however, was not. I thought the market was clearly trending toward a world where web developers were overpriced. Graphic designers could maybe hold out a little while longer because “good taste” can’t easily be transferred to software or services. But most people don’t care. So neither should I.

Where everyone else had to meet payroll, student loan payments, car payments, credit cards, and had a desire to go out and pay for restaurants, drinks, and vacations, I had none of that. I still don’t. I make more money than I did 6 or 7 years ago, sure, but my prices are still lower for what we provide. My conservative estimate is we under-charge by about 60-80%.

I began to think of it as a “misery index”. That guy in Avon re-selling templates dirt cheap to customers won’t last because he’ll eventually have a kid. He did and left the business. That guy in Carmel I met at the networking event selling overseas labor for cheap won’t last because he lives in Carmel and will clearly want nice things, like a fancy car. He posted a photo of his Lexus online and left the business about a year later. That developer I see online from time to time in Greenwood won’t last because he’s over-extended on his house. I know how much he charges and how much that mortgage costs. He didn’t last and eventually took a full-time job after the IRS caught up to him.

Instead, there I was (and still am) the one who doesn’t go on vacations. I use the library. I ride a bike in the winter and take the bus in the rain. When I lived alone I ate half a tuna sandwich for lunch and the other half for dinner. I never did student loans, opting to quit when I realized the price was too high. I don’t buy much over $100. I’ve never purchased an alcoholic drink at a restaurant in my life because of the cost. I bought a lousy house in a do-nothing part of town because that’s what I could afford (and am hoping it will help me make rental income when it’s paid off). In total, I could live on $700 a month in income.

I could outlast a lot of people over the years simply because “I can be more miserable, for longer, than the other person.”

And I was a miserable person because of it. Internally I hated everything. I literally kept working almost out of spite just to prove myself right to only myself.

Obviously, everyone’s experiences are highly subjective and vary wildly. I’m not exactly a cancer-stricken drug mule in Somalia. Don’t overthink this. Everyone forms opinions based on experiences.

Today marks 15 years since my mother died. That’s framed a lot of my opinions on things. But I’ve also come to realize my opinions on most things aren’t worth sharing because my life has had to be hyper-realistic. It literally makes people uncomfortable.

“Oh please, that’s impossible, Justin.”

If you ask me whether people deserve health insurance or not, I skew straight to the notion that most people aren’t that important. I could die right now and it wouldn’t matter at all to the world. A few people would mind for a short while (I imagine). Thus, the only sensible solution is that frequently people will just die and everyone else will move on.

See. Now you’re uncomfortable.

I keep the possibility of being “friends” with most people at a safe distance because I assume they’ll move (far) away and we’ll never see each other again. You laugh at that, but it’s happened too many times with my closest friends. I’ll just let people stay as casual acquaintances. It keeps the misery index consistent.

I saw a tweet the other day that kids on SNAP (food stamps) deserve to have popsicles just as much as any other kid. “No they don’t,” I thought. “They should get used to never having nice things now. It’ll prepare them for life.” People always want things. I’d like a swimming pool. I don’t get to have one. You may think that’s an apples and oranges comparison, but what difference does it really make? Because one’s cheaper to you than the other?

Now you’re even more uncomfortable.

This is because so many messages tell us we can change, we can do anything, we can have whatever we set our mind to. No you cannot. Deep down, we all know that’s not true. Not everyone gets a fancy car or a nice childhood or their favorite spot at the table. Deplorable things will happen. If it knocks you too far off a high point your misery index won’t be able to handle the change.

Not everyone can just “change their mindset”, either. Because if that were true you’d just tell depressed people to change their mind. That shallow trope never imagines that science might show chemical imbalances that are nearly impossible to diagnose, treat, or correct. Sometimes, things just are.

Your disagreement to this is fine. It also doesn’t matter. Your life experiences were just different. Like the the amount of water in a small well, your misery index is set at a different level.

Repeal and replace…with what? How about this?

It seems likely that Republicans in the House and Senate are going to have their way with the Affordable Care Act someday soon. Trump, for his part, has expressed interest in keeping the more popular provisions, like children 26-and-under staying on their parents’ insurance and not denying people with pre-existing conditions.

Those are two rules that are likely to survive. The individual mandate, however, is likely not going to. Which is a key part of the system working. It already had a big hole poked in it from the Supreme Court at its inception. Another poke is likely to be a huge undoing.

“Repeal and replace” isn’t likely to happen, either. But people say they want it. They just never say what should be the replacement. Paul Ryan has been leading the way on this “A Better Way” campaign. When it comes to healthcare they’re largely hands-off, saying what they always said, like “buy insurance across state lines”. This won’t fix anything because the operations aren’t transparent enough for consumers to make informed choices. It’s another cozy relationship with Washington that’s going to begat more problems.

So I thought about it. I have routinely said for healthcare to work for Americans you have to pick a “side”. Either full-single-payer or full-free-market. Any mix of the two and you have too many special interests mucking things up. We know what we get with single-payer, and it does have downsides, but it’s easy to understand.

I happen to think a free market system would be more uniquely American and healthier in the long-term. Here’s Hartercare:

First, we’re going to require hospitals, medical providers, and pharmacies publish their prices clearly and consistently for everyone. If Starbucks can put the calorie count on a muffin, you can tell me how much a pill costs. This will give consumers the critical piece they need to make informed decisions on non-emergency care.

Second, we’re going to have a debate about patent reform. The fact hospitals often don’t seem to know how much an MRI costs or how much a drug costs is part-and-parcel with patents. A $30 million piece of equipment costs $30 million because of patents. Patents are important for a lot of things, but healthcare seems to be an area where that profit is more problematic. If transparent pricing doesn’t work, then let’s setup patent reform. This could be government buy-backs of technology, front-loading the research grants (maintaining our status as a research powerhouse), limiting their duration for drugs and life-saving patents, or all the above.

Third, encourage employers to stop granting health benefits at all to their employees. This was always a weird hack from WWII and it needs to stop. No one likes it when their employer issues them a phone or a laptop because it’s usually a crappy one. Health insurance should be about the same. The pool is now “everyone”.

We can ween people off this by slowly reducing tax write-offs and other incentives for employers over a period of 3-5 years.

Protect low-income, the elderly, and everyone else with a universal emergency plan. When your heart stops beating it’s not a time to Google around for price lists. And no matter what kind of private insurance exists on the market, low-income people are likely never going to be able to afford it. If we as a country are going to do something about that, we must have a universal system. I propose a universal emergency plan that covers everyone with basic care, preventative care, and emergency room care. This is paid for through taxation and distributed to everyone.

To supplement that, private insurance carriers, complying with the same rules on transparent and consistent pricing can offer add-on services. We already do this for a bunch of stuff, like supplemental Medicare plans, supplemental deductible coverage, and other benefits like Aflac.

Plus, having preventative care available to everyone saves money in the long-run for everyone. And having a “Basics” system removes all debate over contraceptives, abortions, and other hot-button issues.

Forget state lines, let’s open this up to the world. Insurance carriers and pharmaceutical companies’ cozy relationships with legislators are over. Let’s open competition globally. Drugs in Canada cheaper? Buy ‘em there mail-order. Health insurers in South Korea think they can provide better service to Americans than Anthem? Bring it on. Doctors in Japan want to provide tele-health services to look at grandma’s bunion? Let’s try it.

If Samsung can manufacture dishwashers from Korea and sell them against GE, and Tylenol can be made in Mexico and sold here, so can anything else. We have the systems and incentives in place to ensure people stay no less safe than they are now.

Stop incentives for the wrong things. If you read “Reinventing American Health Care” by Ezekiel Emanuel, one of the architects of the ACA, you’ll discover two important things:

  1. The Obama administration didn’t know what impact it would have on healthcare. They assumed it would either cut the costs and we’d see a permanent decline, or, we’d take “a big whack” where it went down for a few years and would proceed back up again. Seems we’re on the big whack track.
  2. Medicaid and particularly Medicare is incredibly distorting to the health system. Hospitals, for example, get more money back on reimbursement rates from the government for the same procedures if they’re in a new hospital. Thus, every hospital in the country is consolidating and merging and building shiny new buildings. Shiny, expensive, buildings. Because the government is mostly paying for the construction through higher reimbursements. Stop. That.

There’s no reason a little bit of profit with some healthy competition can’t be a solution that brings affordable care for everyone. Yes, some people are going to have better care than others. But that’s always been that way and always will be. We’re talking about ways to sustainably build a robust system that can scale to everyone, on demand, and without distorted incentives. These steps would go a long way.

And, there’s always single-payer system, too. Which is what most carriers think we’re moving toward anyway. It’s also what Emanuel points out in his book as one of the Administration’s “That’d be nice” goals anyway.

Is your social media unbalanced? Here’s some help to fix it.

Several people have commented that their social media feeds are depressing, upsetting, bitter, and in most cases: an echo-chamber.

I wrote about this recently on what you can do about “Your Facebook Bubble“, how the algorithm works (particularly on Facebook), and why it’s important. So today I thought I’d share a list of Twitter and other sources you might consider adding to your feeds.

I took the effort a year or more ago to balance out my streams and sources with opposing and bi-partisan sources. if you’re reading a lot of Slate, or getting all your news from Sam Bee, Sean Hannity, or Jon Oliver, try balancing out with some of these folks. I watch Jon Oliver, too, but that doesn’t help the echo-chamber.

I have tried to avoid large “ad” entities, like political parties’ sources, though I follow each just to read what they’re saying. There’s no Drudge or Breitbart here. There’s no hate-mongering people here. I’m looking for smarts, not entertainment.

I also include several Indiana-specific people, too. If you find yourself lacking in knowledge about what’s happening at the State House, these folks are indispensable.

And if you find yourself saying, “Oh, no, I don’t want to see that”, you’ve missed the point and opportunity. If you feel angry at these things, then it’s probably working.

Is this the end-all list? Of course not. But this has helped me understand more sides of important issues.

I’ve linked to Twitter and sites where possible here. Facebook and other URLs can often be found in the bios of these people. You can follow me directly on Twitter @jlharter.

Nicke Gillespie – Journalist at Reason.com, a libertarian-leaning news source.

Reiham Salam – Writer for Slate and the National Review.

Adam Wren – Writer for Indianapolis Monthly and POLITICO.

Charles Cook – Editor for the National Review, frequent panelist on Real Time with Bill Maher

Grover Norquist –President of Americans for Tax Reform (“the tax pledge”), which has the ear of every elected representative in Washington.

Brian Slodysko – AP Political Reporter for Indiana.

Dan Carden – Statehouse Bureau Chief for the Times of NW Indiana.

SCOTUS Blog – Indispensable source for Supreme Court coverage.

Indiana Law Blog – to add to the former, Marcia Odi has done stellar work over the years covering Indiana’s Judiciary.

Abdul-Hakim Shabazz – Veteran Indiana politics reporter with a conservative tilt.

Nikki Kelly – can’t recommend following her enough. Great Indiana government and politics reporter covering the State House. One of the few left.

Aaron Renn – Indiana native now working at the conservative Manhattan Institute. An urbanist covering issues related to city growth and economies.

Doug Masson – Lafayette attorney covering Indiana’s politics for about a decade.

Alex Griswold – Media reporter at Mediaite.

Matt Welch – Co-author of the Declaration of Independents.

HHR – The urban conservative blog.

Matt Taibbi – excellent writer and journalist (left-leaning) for Rolling Stone. Also a regular on Real Time With Bill Maher.

Windsor Mann – Writer and editor of The Quotable Hitchens.

David French – Senior Fellow at the conservative National Review Institute.

Last night was pretty normal

Pew in June of this year reported 55% of Democrats say the Republicans make them “afraid”. 49% of Republicans say the same thing about the Democrats. Think about that. Half the country is afraid of the other half.

Trump won last night and half the country is afraid. The other half is happy. The same thing was said when George W. Bush won. And when Obama won. And when Lincoln won.

I’ve spent a lot of time over the last year reading up on Presidents, their administrations, their leadership styles, and the electorate at the time. One thing jumps out at me: we’ve always been crazy. Americans, and people in general, are not very good at assessing risk. I’m not sure yet that Trump’s election is anything too out of the norm.

In fact, a lot was normal last night:

  • Voter turnout was relatively low.
  • White people turned out to vote, because they always do.
  • The country swung back to the opposite-incumbent party. It always does that. “Three terms” is rare.
  • The stock market freaked out. It always does.
  • Half the country freaked out. That always happens.
  • Urban centers voted on a slew of progressive movements favorably.
  • Rural areas voted against liberalism. They always do.
  • Everyone complains about long lines and voter suppression. One news story on TV last night was a man complaining his vote changed to Democrats when he voted straight Republican. I also just saw a man at a restaurant hand his phone to another random man and ask, “Do you know how to use Facebook? I think I’ve just posted the same thing three times.” Those aren’t related, but computers befuddle people. Nothing new.

Here’s what’s not normal (yet):

  • You being insulated by algorithms that makes you think things are how you’d like them to be.
  • We increasingly have a government that’s so large in people’s lives any changes to anything throws legitimate fear, glee, or confusion into markets.

I always tell clients that ask for “samples of previous work” that “past work is no indication of future performance, but here you go.” The same holds true here. Trump has said so many things we don’t know anything about his governance style yet. He could defer to Pence for everything. He could buck his party all the time. We have no idea.

I do think, however, that many voters are pushing for an ideal they’re not going to get: being left alone.

Everyone must stop insulating themselves from the working class. You must stop treating them like a block of “others”. To say things like, “They like this and don’t do that” is only slightly helpful and immensely harmful at worst. You’ve failed to understand deeply.

I’ll give you an example. In the modern era, starting after WWII and expanding rapidly under Nixon, Carter, and Reagan, our government structure has begun to look like this:
fed-state-local1

Where large amounts of income flow to the federal government and then down to states and local governments. This is exactly backwards of how most people would reasonably want it to be. It should look more like this:

fed-state-local

Where our local government receives most of the income for things used in that community. Where the separation of powers and authority still applies. This makes cities truly more competitive against peer-cities. It ensures a greater allocation of resources (fewer “bridges to nowhere”), and makes sure people see the benefits, or lack thereof, of their money in their daily lives.

The fact that our government has become so large, so powerful a force in people’s individual lives, that people fear it or jump in glee when something as simple as a president is elected is the problem.  I wouldn’t be so worried about marriage rights if the government weren’t even in the business of marriage (instead opting for civil unions for all), for instance.

Today I woke up to see people saying they were unsure of what to tell their kids now that Trump is elected. Do you remember what you said when gay marriage was allowed by the Supreme Court? “You’ll tell them people can get married now.” The same response applies here: “You’ll tell them a guy like Donald Trump is President”. Because that’s what happened and like learning about gay marriage, they’ll go back to playing Pokémon.

People in my stream, left and right, are saying they’re scared for their lives. But remember that you, too, can arm yourself. You can protect yourself. Just like you can change your diet or learn something new. You may not want to, but you can. And you can, you know, talk to people. Invite them out for a beer or a cookout or something.

Today for a lot of people the ideal of a limited federal government is more appealing. For me it was always appealing. Because without a “strong” federal government you may never get Alabama and Mississippi to legalize gay marriage or expand health coverage. But it’s a lot easier to move from Alabama than it is the entire country. Despite half a century of federal intervention by progressives, none of them want to live in Alabama. And despite half a century of federal intervention by conservatives, none of them want to live in New York.

Voters are just saying they want to be left alone. I think progressives and conservatives alike can find a lot of reasons to say the same.

Creating more than you consume

I’ve hammered on financial radio host Dave Ramsey before, but I’m impressed with his mastery of his show. I don’t listen to it, but I have in the past, and I know a lot of people who do listen to it. The gist is:

  1. Don’t ever go into debt.
  2. Pay off any debts you do have.
  3. Invest in mutual funds.

There’s more detail to it, like the percentage of money you should invest and so forth. But the simplicity of his message distills to “Don’t spend money you don’t have and earn more money”. It makes for entertaining radio.

I was thinking about his format this weekend because the “earn more” bit is grating. A person with $150,000 in debt and a $35,000 a year income will call in and he’ll tell them they have an income problem. They do, but the way to get into a better job never comes up much. That’s for the caller to just figure out.

It’s always about finding a better job though. Ramsey rarely encourages people to go into business themselves. That could be self-selecting because callers looking to go into business often have a bunch of other financial or personal problems.

Here’s the funny thing about all this, though: his advice to grow wealth is tied to the stock market. “Invest in good growth-stock mutual funds” …and wait 60 years. I get that for a lot of people that’s the safe, tried-and-true way. But did Dave Ramsey make his millions investing entirely in the stock market?

No, he did not.

Dave Ramsey made a business out of selling other people advice he wouldn’t settle for. If he called his own show 20 or 30 years ago he would have told himself to “Find a better job, chip away at debt, and invest.”

That’s not bad advice. But what did Ramsey actually do?

  • He wrote a book that simplifies a complex problem on an issue that impacts millions of people.
  • Started a series of talks and classes in churches (soft targets for people to speak about anything to a captive audience) to push that book and his name.
  • Published that book and worked into the syndicated radio show business to finally expand his reach to millions of people.

That’s all very impressive. I’m genuinely impressed at his ability to grow that and keep reinventing the wheel to expand into all kinds of different markets. He’s in the business of lecturing at middle and high schools, writing children’s books and faith-based books, plus podcasts, web series, and designing financial planning services that compete against Mint.

You have to do something else

If I hosted a competing radio show, I’d be telling callers another hard truth on how to achieve wealth: you must create more than you consume.

What you create must be able to scale up and reach millions of people (this is the fundamental flaw with my business).

My three steps would be:

  1. Turn off the TV and video games and spend that time building, writing, drawing, cooking, or creating something.
  2. Ensure what you’re creating can be reproduced or consumed by 10 people or 10,000 people.
  3. What you do consume should be related to your craft (like books on the subject).

This is somewhat antithetical to the notion of getting a job. People who grind at a job all day don’t have much mojo left at the end of the day to work on a book or a wood lathe. It can be done, but realistically most people just don’t have that ability. There’s also something to be said for “all work and no play” making people into dullards or worse.

Ramsey’s advice is an indication of another uncomfortable truth: the path to wealth in American is less and less through a job unless you’re in a highly credentialed field (law, medicine, etc.). It’s more through creation of your own business where you own the means of production.

In a capitalist society the whole thing would fall apart if everyone was a company owner. Eventually you require laborers. Creating a business is always a huge risk for people, too.

Just as Ramsey’s advice is to never go into debt and “make more money”, mine would go above that: “consume less and create more world-class stuff.”