User-agent: * Allow: / Trenton Butcher Block: January 2011

"Our Liberties We Prize, Our Rights We Will Defend."

Commentary on national and local events from the standpoint of a Trenton city resident and state worker.

Sunday, January 30, 2011

How to Disturb the Neighbors

Libertad Lamarque was a famous Argentine singer and actress.  She got her start in the 1920s making tango records.  Her long career was almost as much the result as her ability to adapt to adverse circumstances as her talent.  For example, she learned how to sing tango because she was unable to secure work in opera as a soprano.  After slapping the future wife of Juan Peron, Eva Duarte (A.K.A. Evita) in the face while working on a movie, she was blacklisted in Argentina.  At the time, both women were in love with Mr. Peron, who was then a cabinet minister.  After Eva used her influence, Ms. Lamarque was unable to get work in Argentina so she moved to Mexico where she became even more famous.  At the time of her death in 2000 at the age of 92 she was still working, playing the role as a mother superior nun on a Mexican soap opera.  She recorded over 400 songs during her career, making her one of the most prolific recording artists of all time.
 The Princeton Record Exchange is a wonderful little store located across from the university campus on Tulane Street in Princeton.  This store sells a wide variety of new and used CDs, videos and vinyl records.  It is a throwback to the past.  Similar stores cannot be found elsewhere in the area outside of New York City or Philadelphia.

Several years ago after seeing my family doctor I went to Starbucks then to the Princeton Record Exchange to see what I could find for cheap.  I picked up a CD of some of Libertad Lamarque's early hits.  Prior to this time, I never heard of her.  To put it mildly, her early tango music was unique.  The CD included songs like La Chica de 17 and Negra Maria.  When she sang tango, she used her voice as a precussion instrument and carried the beat of the music rather than simply singing out the melody.

I liked the CD so much I went online and ordered some more of her music.  I found out she kept on making records right into the 1970s at least.  She did a variety of popular music as well as tango including Cielito Lindo among other things.  Some of this music is familiar to us in the USA, although it is normally played here without words.  It was good to hear the words that go with these songs.

Her resume also includes many movies as well as soap operas.  Here is the article about her on Wikipedia  Here is another biography on the English section of a Spanish-language website about tango.
As Billy Joel once said, "You can't get the latest sound from a story in a magazine."   And of course, you can't appreciate this talented lady by reading a Wiki article either.  So here are some links to her singing and performing in movies: and  also see where Libertad (the brunete) gets to show the blonde lady with the bad singing voice how tango is done.

Tango originated in the bordillos of Buenos Aires, and Libertad Lamarque is a little too refined to be an "authentic" female tango singer.  After all, she came from a relatively affulent background and got the benefit of training in the performing arts.  For someone a little more whorish, check out Tita Merello here .  I can gurantee that something this sexy back in the era it was made would never pass the US Motion Picture Code.  OK, it's PG, but that's about as strong as it got in the 1930s.  Here is Tita Merello's most famous hit, Se Dice de Mi, which is a humorous song about an ugly tramp.  In the Spanish-speaking world today, this song is strongly associated with the television character Ugly Betty, who is known south of the border as Betty la Fea.

Tita Merello lived and worked around the same time as Libertad Lamarque. She was born in 1904 and died in 2002. She worked in legitimate show business from the early 1930s until 1995.  Here is a good biography I found on her.  The Wikipedia biography lacks detail, so I went with this one .  Like Lamarque, Merello had a long career as a singer and actress.  She also danced.  Unlike Lamarque, Merello grew up a street waif and worked for a time as a prostitute and got her start in show business as a chorus girl at a seedy bar where the sailors hung around to pick up working girls.  She got noticed and moved up to legitimate singing and acting roles.  She had no formal training in the performing arts and basically portrayed women that were like herself before she became famous.

There is a lesson to be learned here.  Cream rises to the top, the weak fall by the wayside.  Use what you got, work hard and don't give up and you will feed your face.  Go through life with your hand out looking to mooch off freebees and you will become the bum you aspire to be.

So disturb the neighbors by blasting some old latin music.

I Just Want to Wet My Beak

In Godfather II, when the young Vito Corleone who was getting his family business started with a dress-stealing racket, the local Moustache Pete comes along and tells him that he doesn't want much, all he wants is to wet his beak.  Pay me, or I'll go to the cops and you will be done.  In New Jersey today, thanks to rules set by the state and others, there is a whole lot of beak-wetting going on.  That's one reason why it is so expensive to get anything done here. 
I want to wet my beak in Godfather-speak means that I want my cut.  Sadly, this practice occurs not just in the fictional world of the Mafia film series, but also in everyday New Jersey business life.  That's one reason why it is so expensive for businesses to operate here.

Take real estate for instance.  Here a whole flock of vultures are out to take a drink, ultimately at the home buyer's expense.  First, you have the real estate commission, which is built into the price of the house.  This expense is expected, because after all, the agent is not going to work for free.  Then you have the mortgage application fee, the appraisal fee, the mortgage points, the paperwork processing fee, the fee for your attorney, the title search and title insurance fees, the fee for the termite and radon inspections, the fee for the engineering inspection, the fee for the municipal inspection as well as the fees to the contractors for remedying the problems found by all these inspectors.  After paying all these fees, you can be out as much as $20,000 on a typical house.

Much of what you are paying is required by somebody - the bank, the state, the municipality, etc., and a lot of it is mandated on the premise that you, as the buyer, cannot be trusted to make rational decisions on your own without help from the experts.  After all, if you didn't get the "benefit" of paying all the inspection and appraisal fees, you may just go out and buy a bug infested house complete with deadly radon gas, that is overpriced and has numerous structural defects.  Oh gosh!  That would be terrible!

I remember spending my teenage years in Lawrence Township located to the west from Route 1, near the Lawrence Shopping Center.  As all you geology experts know, Route 1 was built on an old beach, this location was picked for the roadway because it is relatively flat.  It also is the approximate demarcation line between the part of the state that sat under water back in the dinosaur days when temperatures were a lot warmer, and the part of the state that was always above water.

If you go to the west of Route 1, you are standing on what is the remnants of a mountain range, that was created over a billion years ago.  As evidence of this, there is a layer of sandstone located a few feet below the surface.  This is where the sandstone for locally-built brownstone houses came from when they were built in the 19th century.  At that time, there were several quarries operating, including one in Hopewell Township that is now used as the Quarry Swim Club.

By the way, I'm not an expert in all things, I just sound like one.  I have to give credit for this tidbit to my 9th grade earth science teacher who told us about the local geology.  Because he was able to localize what would otherwise be a pretty dry subject for a special-ed kid in junior high, he was able to hold the class's interest.  The fact that I remember the story is proof of it.

Contained below the ground in the formerly mountainous part of New Jersey is some radium ore.  This ore was mined in the past and used to make glassware that glowed in the dark as well as paint for watch dials.  These products went away when it became common knowledge that the radiation from radium can cause cancer which will kill you.  Not only that, but it became common knowledge in the 1980s that radium in the soil breaks down into radon gas, which will fill your house and eventually kill you over time.

It just so happens that the Slackwood section of Lawrence Township is a ground zero for radon exposure.  Apparently, there is radium in the rock under the houses, which seeps into the basements and can potentially cause cancer in the people who occupy homes there.  I grew up in one of those homes in the 1970s and have suffered no ill effects.  My mom, brother and sisters also do not have cancer.  My stepfather died of cancer, but did not have cancer of the lung, so the radon probably did not do him in.

I always thought Slackwood was a fairly good area.  When I moved there from Copperfield Estates in Hamilton Twp. in 1969, I believed I was going to where the rich people lived, and they were indeed better off than the people around Yardville.  So it was a desirable place to live, at least to the discovery of radon. 

I have a real estate license and remember showing a house on Harding Ave. in the early 2000s.  In the basement was a bunch of pipes on the ceiling.  The customer asked "What's the deal?".  I noticed one of the pipes had an arrow on it and writing which said "radon".  I told him the house has radon and was remediated.  That killed the sale.

Never mind people lived in this area for decades when nobody knew about radon and most of them were happy with their experience and never got sick.  Through a twist of fate, somebody discovered a remote health risk of living there and now people don't want to go there.  The government also uses it as an excuse to extort money out of home buyers so they can know of the risk.  (May I ask what is the benefit to anyone except the people who inspect for and remediate radon).  After all you can die from a piece of space junk hitting you on the head when walking down the street, and that is only slightly less likely than dying of radon exposure while living in North Jersey.

I bought a rental property in Trenton in 1985 and did not get the "benefit" of being extorted by the benevolent town and mortgage company.  At the time I was selling real estate on a semi-full-time basis and was a man in the know.  I wanted a cheap place to live because I wanted to buy a home but really couldn't afford one.  So I hooked up with a Mr. Brophy who was a drunk who was getting divorced from his wife.  Mr. Brophy's father left him about a dozen rental homes in Trenton and he needed to sell them right away to settle the divorce.

I got to buy a single-family home on Tyler St.from him for the princely sum of $15,000.  At the time Trenton did not have a city inspection program.  I bought the home with $1,000 down, plus attorney's fees and title insurance.  I took a 5-year mortgage for $14,000 from the owner and did not have to pay points, application fees or any of that jazz.  I also did not have to get the place inspected to satisfy the mortgage company.  Total out of pocket cost $1,800, which I paid from money I saved when I had a paper route in high school.

I still have the house today.  It has returned several times the original purchase price.  I am a happy camper.  Of course the place was trashed when I \bought it.  (It was a slum property, it was supposed to be trashed.)

Sad thing is, today this would not be legally possible.  The mayor wants to "protect" renters from exploitative landlords.  So there is a city inspection program.  When you buy a house it is inspected and violations have to be fixed before you can take possession.  Also, you must get it inspected every time you want to re-rent it.  You have to make repairs each time to satisfy the law.  Here's a bit of common sense.  If you are a tenant and feel your house is a bad deal, try moving or renting somewhere else.  Makes too much sense, doesn't it.

Who does this serve?  You, the home buyer know you are buying a slum property that needs work.  You, the tenant know you plan on moving into a slum property that needs work.  This program only serves to line the pockets of the city which charges for the inspections and the pockets of the contractors who make sham repairs to satisfy the requirements of the inspectors.

The end result is that it is not possible to legally sell or rent many homes in the city because they need too many repairs.   That's why there are so many vacant properties.  That's why many people simply ignore the law.  There are people who advertise that they will buy homes immediately without repairs.  They pay a steep discount from what the building is actually worth.  They then rent the property out, often without doing any work.

That's the way it is in New Jersey, the Extortion State.  Politicians pass stupid laws to protect people from themselves, then help their fellow travelers in the private sector reep huge profits from work they would not have otherwise gotten  if it wasn't all for the "protective" legislation designed to protect people from remote or nonexistant threats.

Let us protect ourselves on our own and save us a bunch of money.  Makes too much sense doesn't it.

Thursday, January 27, 2011

More Government at its Finest

When I woke up this morning, it looked like winter wonderland outside.  Snow drifted up everywhere.  The radio announcer said that 12 to 18 inches fell across the Central Jersey listening area.

So you would think the state would be closed.  Think again.  Our governor, in his infinite wisdom has come up with a new invention to avoid the wrath of Jersey 101.5 for closing the state after snowstorms.  It is called the 3 1/2 hour delay.  My wife was told to report after lunch which would be 1:00 pm so she could work to 4:30 pm.

At the moment, this doesn't effect me because I will be off from work for the remainder of this week and all next week.  However, my wife still has to go in. 

Why would the governor want to put thousands of cars on the road to bring workers in for the afternoon, only to send the same people back home over rush hour?  After all, very little work is going to get done, because by the time people get settled into their routine, it will be time to go home.  In any event, only a few people will show up anyway, most will probably opt to take the whole day off.

Well, the advantage to the governor is two-fold.  He hones his reputation as a hard-ass who will not give snow days to adults, when those in the private sector (like AAA tow truck drivers) have to work.  Never mind that most large offices are also closed, if they work at Wal-Mart, then the state should be open too.

Perhaps more importantly, is the implications from the payroll prospective.  If workers actually show up at 1:00 PM, they will get paid three and a half hours disaster leave and three and a half hours straight time.  However, if they take the whole day off, they are charged seven hours vacation time and don't get the disaster leave.  In other words, Christie is playing it slick and is trying to get employees to use their own time.  For me, if I was working this week, I would report at 1:00 PM just to beat the state out of the disaster leave.

Moving on to other things now.  Let's see if the municipal snow plow operators can do a better job this time than the did after the December snow storm.  I should tune into to 101.5 just to hear the jerks complain about a "union slowdown" because it is taking too long to get their streets plowed.  I would like to say that perhaps if their favorite governor kept the millionaire tax around, state aid to municipalities would not have been cut and the towns would have a full complement of snow plow operators.  Lay off public works employees and suffer the consequences of unplowed streets.

Speaking of aid cuts and the 2 percent property cap, yesterday the Camden city council  passed a 23 percent property tax hike, effective in May, according to today's Philadelphia Inquirer.  The paper says that the city did not say what the extra money will be used for, or if the new revenue will allow some of the 166 police officers that were laid off earlier this month to be recalled.  Because of the 2 percent property tax cap law, this tax increase has to be approved by the state before the city can begin collecting it.

City officials say the increase is a necessary state to meet the state's mandate that the city wean itself off state aid.

What is happening in Camden proves the point of what I have been saying since last spring when Christie said he wanted to get rid of the millionaire surtax and pay for the tax cut with cuts in municipal aid.  First, the largest cities in the state will take the biggest hits.  These cities were receiving the largest state aid grants and have many low-income residents.  Since urban residents tend to vote Democratic, the governor believes they are expendable and can be sacrificed to bring about lower taxes for his mostly suburban supporters.

Also, people expect and deserve a certain level of services from the government, including police and fire protection for America's second-most-dangerous city (Camden falls right behind East St. Louis, Illinois, which is another urban hellhole).  These services can be paid for through state grants (supported by progressive taxation like the millionaire surtax), or by increasing the property tax burden on city residents, who can ill afford to carry it.  (Hence the proposed 23%  municipal purpose tax increase).  Either way, the piper must be paid.  Shams like the 2% tax cap aren't going to work in the long run, because the state will be forced to grant exemptions, just like is going to happen in Camden.)

It Wasn't as Bad as I Expected

Yesterday, I reported to St. Francis Medical Center for my lung lavage.  As I told you Tuesday, my doctor said that he wanted to do a broncioscopy to extract some mucus from my lungs by pumping water into the lungs through a tube he would put down my throat.  He could also take biopsies with surgical instruments if he saw anything.  He said I would be fairly awake for the procedure, although I would be partially sedated.

It sounds like some form of torture, but at the end of the day, the worst part of it was the drive to the hospital, which was during the middle of an unexpected snowstorm.  The nurses were real attentive.  Although they screwed up the IV on the first attempt, which hurt like hell, they struck the vein on the second go-round.

As for the actual procedure, it turns out I went into a deeper sleep this time than the previous time I had a broncioscopy done.  Then, I remember something being rammed down my throat and remember a drowning feeling.  This time, I only remember the camera going down my nose.  After that, I went out cold.  The doctor told me he accomplished what he wanted when I woke up.  Afterwards, I was coughing profusely, and the doctor said that was my body reacting to the water that was put down my lungs.  He hooked me up to a nebulizer, which is a machine with an inhalation tube that looks like a hookah.  You put the mouthpiece in your mouth and inhale.  After about a half hour the coughing fits went away.

While I wouldn't recommend the procedure to anyone for the fun of it, it wasn't as bad as advertised.

Tuesday, January 25, 2011

Here's Something I Don't Understand

Doctors were an important source of contributions for the Christie campaign.  Why this is I'll never know because it seems that one of Governor Christie's objectives is to water down public employee health benefits.  So why would physicians want to kill the goose that lays their golden eggs anyway?

Back in April, I posted an article called "Christie Contributors Outed".  In this article I posted the list op people that gave $3,300 to Governor Christie's general election campaign.  What I didn't realize at the time was that this article would prove to be the greatest source of traffic to my blog.

I pictured this list as a kind of hall of shame.  I originally thought people would want to look at it it see if some prominent person they do business with actually gave money to this jerk's campaign.  Over time, I found it was being used for much more than this.  The list has been actively sought after by fundraisers looking for a grouping of wealthy individuals likely to give money to Republican candidates.  Perhaps the opposite of what I intended, but I don't mind the traffic.  It has also been used by people researching companies before going on job interviews, by people trying to find businesses to shop there and even by people trying to find uncle Harry's home on Christmas Day.  It is indeed a list of many uses.

I also noticed another pattern over time.  Many of the top contributors are members of the medical profession, whether they be physicians, osteopaths, chiropractors or dentists.  But why would doctors want to give money to a Roveite Republican running for Governor of New Jersey anyway.  The first thing that comes to my mind is the most obvious.  Doctors on the average have the highest income of any of the occupations people normally engage in.  True, Oprah may make more than any doctor, but most actresses or TV and radio personalities (ALL-not just the big names) average less than the average doctor.  The same with lawyers.  SOME lawyers make more than most doctors, but on the average, lawyers make less.  You got the picture, if you want campaign contributions, go after the people who have it and doctors fit the bill.  They are regularly solicited by candidates of both parties for this reason.

OK, doctors have the money and may be inclined to give to political causes.  But why Chris Christie?  For this I have only two answers, both of which make little sense because they actually go against the doctor's financial self interest.  The first is that I give to Christie because I am a Republican and support all Republicans regardless of the individual candidate.  This is the same reason why many people vote a straight ticket year in and year out.  It is just that the physicians have more spare bucks than you or I to help them financially in addition to contributing their time and vote to a campaign.  Giving to ALL Republicans just because of their party affiliation may make sense if the doctor has political ambitions and hopes to run for office some day, but most people who contribute this way do so to fill an inner emotional need (Identification with a particular party) not because of any rationally thought out purpose.

The second reason is more self-serving and rational on the surface, but in reality even more illogical.  Some doctors gave to Christie and other conservative Republicans because these candidates promise to lower taxes.  Since doctors have high incomes and tend to live in nice homes, they pay more income tax and property tax than the rest of us.  By putting Christie in power, they were hoping he could lower or at least stabilize their tax bills.

Self-serving, but short sighted.  The only reason why physicians have high incomes is because they get paid fairly well when people go to the doctor.  The only way most people (Corzine was the exception) can afford to see the doctor and have medical procedures performed is because they are covered by insurance.  In fact, most doctor's offices have signs saying "no referral, no visit" or "no insurance, no visit".  Why?  Because the concept of paying doctors directly with your own money is so rare is is considered a virtual impossibility.

The insurance system is what supports the high charges.  For instance, Horizon is billed $200 every time I go to physical therapy, which is little more than a trip to the gym with a personal trainer for about 2 hours each time.  I go three times a week, so that is $600 per week or $1,200 every two weeks.  Now what would happen if I had to actually pay full price for that therapy?  I wouldn't go because I couldn't afford it.  And that would go for 99 percent of the public.  If people had to pay full price for every test, doctor's visit and surgery, the price of medical services would either have to drop considerably for physicians to maintain patient volume, or the number of doctors would have to drop off drastically because only the rich could afford the prices physicians now charge. 

So, a society where most people have good health insurance is a requirement to maintain out health care system as it now exists  (including high physician salaries).  So why would doctors support a governor who has already reduced the scope of health coverage available to public workers and probably plans to reduce it further.  Remember, this governor has publicly promised to increase employee health insurance benefit costs to 20 percent of the value of the policy.  He will probably also increase co-pays and require workers to pay out of pocket for tests and surgical procedures as well.

Lower taxes by reducing worker health benefits?  Perhaps it's possible, to some minor extent.  Remember program costs and interest expenses eat up a larger part of the state budget than wages and benefits, so any savings to the public would be small.

For the physician, less inclusive, more expensive insurance will mean fewer doctor visits and perhaps lower reimbursement rates for treating public employees and retirees.  Remember there are 800,000 retirees and that state, county and municipal government employ more people than construction and manufacturing combined.  So watering down benefits will substantially reduce revenues at physicians offices.

Also, because county, state and local governments have pretty much a uniform health care plan, these employers together are what is known in economics as a "market leader".  Basically, if I am an employer and hope to attract the same people that government employs, I better be able to match them on my salary and benefits package, or the workers will go and work for the government instead. (Kind of like the local grocery store having to match Wal-Mart on prices to get customers).  Reduce the benefits in the public sector and private employers employing similar workers will have little reason not to reduce theirs as well.,  So if you work in a large organization, say a pharmaceutical company, defense contractor or insurance company, you better hope that the governor doesn't mess with our benefits.  And if you are a doctor, expect that these people are now also going to be less likely to afford your services.

Yes, Chris Christie may cut doctor tax bills, but I bet you his policies will cut their income even more.  They are fools for backing him.

Tomorow I Get Waterboarded

Tomorrow my pulminologist wants me to get a bronchioscopy because he thinks I might have bronchitis.  Basically a bronchioscopy, or a bronc as it is known in the profession is a medical test where the doctor inserts an endoscope (camera and tools) down your throat and into your lungs.

I had one done a few years ago.  They partially knock you out with some Michael Jackson juice up the arm through an IV.  They place a rag over your face to cover your eyes and jam a tube down your throat.  You gag like hell, but I really didn't remember too much when it was over.

This time the doctor says it will be rougher because he will be doing something called a "lung lavage", where they shoot water down your lungs with the camera down there too and they watch what is going on.  He says he needs me more awake this time because he needs me to "perform some maneuvers", whatever this means.

Sounds like something the did back in the Inquisition.  Perhaps I could hook my doctor up with Torquemada.  I'll let everybody know how it went, but it sure doesn't sound too good.

The knee surgery is healing up fine and therapy is progressing nicely.  I figure I'd get this lung thing done now while I'm still out of work.

Thursday, January 20, 2011

You Better Be Packing Heat

Even when Camden had a full complement of police, I'd bet you would probably not want to walk these streets in the night or even in the daytime.  Now, after the city has been forced to lay off almost half its police force, moving about on foot has become even more dicey.

Earlier this month, the City of Camden laid off 335 workers, including half the city's police force and one-third of its firefighters.  Camden is one of the poorest cities in the country and was forced to lay off its public safety employees because of cuts in state aid - cuts made necessary by Governor Christie's decision to take $1 billion out of the state's revenue stream, by ending a surtax on the incomes of millionaires which affected the top-earning 1,700 families in the state.

City officials claim that the loss of the 166 police will not affect safety in the city.  They say they will be able to do more with less by deploying resources more efficiently without compromising public safety.  But I bet you that in the end, less police on the street will make this city which has the second-highest crime rate in the country behind East Saint Louis a more dangerous place.

The Trentonian commented on layoffs of firemen in Trenton back in December which were made necessary by the same aid cuts.  It said that the layoffs were necessary because Trenton's "welfare check" got cut.  I live here and pay $3,500 in property taxes a year and resent this condescending remark.  We are not beggars and are not looking for a welfare handout.  We have a substantial part of our city taken up by state office buildings and the city is expected to provide security for the thousands of public office workers which work here every day, without collecting any property taxes on these buildings.  In Trenton's case, the state aid is not "welfare".  It is simply compensation in lieu of taxes for expenses the city incurs as host to the state government.

In Camden, the situation is somewhat different, but it still does not excuse the aid cut and the resulting layoffs.  Camden simply does not have enough taxable properties to support itself.  While you may characterize this state aid as "welfare", it is still necessary in order to provide a necessary level of city services to insure the safety and well being of the people who live and work there.

If you are reading this from the comfort of your home in a suburb, don't feel so smug.  Crime problems in the cities have a way of spilling over into the suburbs.  Criminals left on the street often have access to cars and those that don't probably can reach your community by bus.  Less police means more criminals moving about and they are all on the prowl looking for opportunities to make illegal money by robbery, burglary, drug dealing, prostitution, and what have you.

So, I'm playing up the crime threat to garner sympathy for higher taxes on the state's top earners.  May I ask you then, where are all those jobs the governor promised will be created if we stop taxing these families so harshly?  Have you recently landed one of them (ha ha, there ain't any.).

Well then, you work for a living, live in the suburbs and are not a millionaire.  You haven't noticed any more crime lately.  Then how have you been affected by the aid cuts.  Just look at what happened after the blizzard what took place this past December.  While in the office, the person in the cubicle next to mine keeps Jersey 101.5 on all the time.  People were calling in all day saying their streets weren't plowed and the station was accusing public employees of pulling a work slowdown across the state so the snow would remain on the streets longer.

The reality was different.  Towns across the state had to lay off public works employees (translation:  trash collection and road crew personnel).  These are the workers that get to ride the plow trucks around after snowstorms.  Fewer public works personnel meant slower snow cleanup, which was particularly noticeable after a big snowstorm.  Fact is you can't have your cake and eat it too.  The millionaire tax was needed to support the level of state aid that nearly all municipalities in the state got before the Christie cuts.  Without the surtax, layoffs were needed.  Makes me wonder what is going to happen with the Proposition 13-style two percent property tax limit if the state does not make up the shortfall what will develop over time with more state aid.

If I was the governor, I'd be looking to restore the millionaire tax.  After all my job requires me to hang out in Camden several times a month.  He is putting my life at risk.

That's a Whole Lot of Zeros

We all heard this jingle.  "You have a structured settlement but you need cash now.  Call J.G. Wentworth, 877-CASH-NOW!"  I'm not knocking Wentworth's business model (There's other companies out there that do the same thing, like Peachtree.) but you have to wonder.  What kind of person would need their services in the first place.

Before we get to why you would want to sell a structured settlement let's explain a little bit about what Wentworth does and what goes on before you even see your money.  Let's say you won a lawsuit.  Instead of giving you your $500,000 up front, the judge agrees to the defendant's request to pay you over 20 years.  Remember only you get your cut over the next 20 years.  Your attorney is paid his third up front.  The doctors and the hospital are paid their medical bills up front too.  So at this point, you owe neither the medical bills from your injury nor the attorney's fees.  You also won't be seeing the whole $500,000, but will rather get what's left over after attorney and medical expenses, let's say that's $250,000, on which you will earn interest while it is being paid off.  Your portion of the settlement comes out to $1,700 per month.

By the time the settlement was awarded, about four years have passed since you filed your lawsuit.  Since you waited almost two years to file after you fell down the steps at Waterfront Stadium when you went to see the Trenton Thunder play (your attorney wanted to wait the two year limit to see the extent of your medicals before filing), it has now been almost six years since you broke your back.  You have since recovered from your injuries and found a job, so the $1,700 per month is just extra gravy, you don't have to live off it.

So your choices now are collecting $1,700 per month for 20 years (not a bad payout, since even if you can't work, you can still collect Social Security Disability on top of the settlement), or you can sell your settlement to a third party like Wentworth.  Since structured settlement companies are in the business to make money, they are not going to pay you the whole $250,000.  I never done business with one, so I don't know what cut they take, but my guess is it is probably fairly hefty.  Let's suppose they are willing to give you $175,000 up front.  That means you loose $75,000 off the principal, plus the interest you would have gotten off the principal over the 20 years.

Still want the product?  Probably that depends on how bad you "need cash now".  Remember you either got your regular job (if you can work) or are drawing about $1,500 a month for life (with annual cost of living raises) from Social Security.  So even if you are out of work, you won't be destitute if you take the settlement, because between the lawsuit money and the settlement, you will be earning $3,200 a month, which is enough to support a modest lifestyle for a retiree.  But if you take the $175,000, your income drops to $1,500 a month, which is cat food territory (I guess you'd be needing a new cook book.).

So what gives?  Perhaps your wife works and you still work too (the whole lawsuit is gravy).  You want to buy a house.  Then getting $175,000 up front may help.  Same thing if you are single, crippled and on Social Security, but have a business that you could open with the $175,000.  Providing you are successful and can earn more than the $1,700 per month, you come out ahead.

Like they say on the edgy series of anti-smoking commercials, "Really?".  Starting a successful business or buying a home would be good uses for $175,000, but is that what structured settlement customers really do with the money most of the time?  Not hardly.  I bet, most of them are up to their eyeballs in debt and will do anything to get out.  So they sell a source of income for a steep discount to get an immediate cash fix.

Sound familiar?  Think about the state's finances.  New Jersey is in deep doo doo.  We are running a massive deficit, but the public still expects the criminals to be kept off their backs, the fires put out and the potholes filled on the roads.  They also like it when the politicians come up with new ways to spend money like more grants and loans to attract businesses to the state (Christie's idea) or offering full-time kindergarten and preschool to more kids (Corzine's idea). 

So what's a poor state with lots of expenses and too little revenue to pay for them to do?  Enter revenue anticipation bonds.  They're kind of like J.G. Wentworth for governments.  What New Jersey and some other states do is sell bonds and pledge revenues from a sources like the tobacco settlement or insurance surcharges billed to drivers with points on their licenses to get money up front.  They then use the revenues to pay back the bonds.  Of course, New Jersey does not get nearly as much from revenue anticipation bonds as it could get from sitting back and waiting for the money to come in from the various taxes and fees it collects.  But in the end the state is just another credit junkie.  It will sell its lifeblood for a steep discount to get Shylock off its back for a few months.

So next time when the papers blame public employee wages (about $55,000 per year average) and benefits for the state's financial problems, just remember the real cause of the problem.  I don't expect you to take my word for it.  Check out this bond placement attorney's resume to see all the New Jersey revenue anticipation bonds he has handled. 

Check out the dollar amounts.  That's a whole lot of zeros.  Imagine the money the state would have really gotten if it didn't do the equivalent of you selling your paycheck for the next 20 years to Wentworth for a lump sum?  Here is the link:

Friday, January 7, 2011

Here's an Endorsement for a Service Nobody Wants

Here's a surefire way to have a good time.  Go out and get some knee surgery.  Like I said, knee surgery is something nobody wants.  However, some times you need it.  And in that case, you want to get the best knee surgeon you can find.

When I was out walking my pit bull Chief back in October, we ran into another person who was walking his dog.  Chief decided he wanted to go over and check out the other dog.  Since Chief weighs about 110 pounds and pulls like a locomotive, he can be hard to control.  Since his decision was sudden and because I wasn't prepared, I was knocked off my feet when he lunged for the other dog.  Down I went square on my left knee cap.  I landed on a stone and punched a nice hole in my knee.

Of course it hurt.  After all, I had a nasty cut, so I didn't bother to get it checked out right away.  A couple weeks later it was still hurting so I called my orthopaedic surgeon at Princeton Orthopaedic Associates.  It took a couple more weeks to get an appointment and I didn't get to see the doctor until December 6.  When I saw Dr. Moskwa, he told me I probably had a torn meniscus but he couldn't say for certain until I got an MRI.  I had the MRI after waiting a few days for the insurance company precertification and then had to wait another week to see the doctor.  The girls at the appointment desk wouldn't make the follow-up appointment until after I actually got the MRI because they needed to know the insurance company would approve it.

I saw the doctor and he said my knee cartridge was indeed torn and he recommended surgery.  He was able to get me scheduled for the procedure on January 4.   By the time I was ready to go to the surgery, my knee was already feeling better.  My, isn't our health system wonderful.

The one part that went right was the surgery itself.  Dr. Moskwa told me that he found my injuries were much worse than he suspected and that I definitely needed the operation.  Amazingly, I was able to walk without crutches the same day I had the operation.

Today I started physical therapy.  I am walking fine, although it still hurts.  I have no infection or anything like that, and only have two small holes in my knee.

If you need a knee operation, go see Dr. Moskwa.  It may take a while to have him actually do the work, but the wait will be worth it.  He does excellent work.