On Tuesday, “iPhone Queen” replaced “Welfare Queen” as an attack on lazy Americans who don’t want to pay for things. This attack is much broader, however.
“So rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on that, maybe they should invest in their own health care….They’ve got to make those decisions themselves.”
We all know deep inside that politicians are constantly lyi….er, framing, how they speak to us. Words they choose have been carefully selected, and often extensively test marketed. That’s why it’s so powerful when an unscripted moment occurs, or when someone says something in a way that’s not “smooth.” Voters get a glimpse of what she or he really thinks of them.
Hillary Clinton’s “deplorables” comes to mind. So does Mitt Romney’s “47 percent.” As does “Let them eat cake.”
And so today we have Jason Chaffetz (R-Utah) saying Tuesday morning that Americans should stop whining about health care premiums and instead cut back on extravagances like iPhones.
Taken literally, the statement is ludicrous, and even those prone to defend all things Republican didn’t defend it. Health care costs for a family of four (@ $2,000 a month) cost more than 35 new iPhones in a year.
But taken figuratively, in the best possible light, the statement is only a little less ludicrous. It does however have its roots in a convenient but flawed line of logic that has bedeviled personal finance writers for years. It’s the $100 sneakers argument. The “latte factor” that my friend Helaine Olen has written so elegantly about. Most important, it’s a simple, magic bullet solution for all of America’s ills.
“People are poor because of their own choices.”
Here’s one translation: “If only people didn’t drop $4 a day at Starbucks, they could afford a home, college and and health insurance.”
Only people who are bad at math, and are blissfully unaware of their own good fortune, fall for this. Sure, $4 a day adds up. But it’s not going to help pay $30,000 college tuition, or a $2,000 health insurance bill. And sorry, the extra $100 a month doesn’t actually make a dent in a $60,000 student loan debt, either.
But keep going with that line of thinking, and you’ll hear that people should be ready to sacrifice more — they have all these TVs, and iPhones, and shoes and such. If they didn’t waste money on that stuff, they could get ahead in life.
That theory also runs in to a reality brick wall when you take an honest look at real consumer expenditures on things like electronics and clothes. These things are much cheaper than they were a generation ago. I wrote a long story about this for NBC several years ago. Please have a look. But here’s a taste of it:
“A look at 1971 Sears catalog offers a glimpse of some plummeting prices. In 1971, a basic Sears refrigerator cost $399. Adjusted for inflation, that would be about $2,000 in 2005 dollars, or nearly seven times the $297 price of a basic fridge in today’s Sears catalog. Put another way, a fridge costs more than two week’s work for an average earner in 1971, but less than two day’s labor today. Other household items were similarly expensive in 1971 — an 18-inch TV cost $429 (the equivalent of $2,150 today) and a 24-inch dishwasher cost $249 ($1,200 today).”
You know what is A LOT more expensive today than in 1970? Health care and housing.
Sure, people do splurge on more stuff. The rise of off-site storage companies attests to this. And plenty of Americans could do more with less. But as many people testified in the Facebook discussion I’m having today, paying for health care can require cutting out nearly all their discretionary spending. It’s my belief that people are buying stuff, like TVs, to soothe the pain they feel because they can’t possibly save enough to buy a home in the city where they grew up.
So what’s really going on here?
Consider for a moment how convenient it is as a policy maker to say, “Freedom” or “Choice” when there’s a really intractable problem to solve like health care. Obamacare is indeed full of issues. Premiums are spinning out of control. Fixing that is really hard work. It would be nice to find a magic bullet like, “if people just stopped buying iPhones they wouldn’t need government help!” Believe me, I wish that were true.
And it is true, if you are a member of U.S. Congress and someone else pays for your health care. Or if your company pays for most of it. But for millions of Americans, suggesting that cutting back on iPhones will solve the problem is the same as saying, “It’s not my problem.”
But here’s the horrible, hidden truth about health care. It is our problem. America has had universal health care for a long time: It’s called the emergency room. People get really sick, then go to the emergency room. And that’s the most expensive way to deliver health care. NOT dealing with the problem is going to cost us all a lot of money.
And lest you think Chaffetz misspoke, he did not. He really did mean it. Given a second chance at comment, here’s what he said:
“What we’re trying to say — and maybe I didn’t say it as smoothly as I possibly could — but people need to make a conscious choice and I believe in self-reliance…And they’re going to have to make those decisions.”
I’m all for self reliance. I think we could all agree that some number Americans overspend and could fix their personal finance problems by tightening their belts. On the other side, some number of Americans are simply victims of the mathematical reality they must live in: median incomes haven’t kept pace with the cost of college, housing, or health care. Where we might disagree where the slider would would land between these two groups. Sometimes, it’s hard to find good data on that, though I have tried in my Restless Project to show just how hard it is for Americans to afford decent housing in most big cities.
I can assure you, however, that the fix for health care premiums is not belt tightening. Suggesting so isn’t just a terrible punting of leadership, it’s a harsh insult to every family struggling with health care costs. I’ll bet that’s you. And I want you to demand real answers from our elected officials, not cliches.
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