The SF Bay Area housing crisis

http://blogs.kqed.org/newsfix/2013/10/30/kqed-launches-priced-out-the-high-cost-of-housing-in-the-bay-area/

This is probably he most important social issue for the area. It's strange that SF has a proud history of inclusion (and a pretty good record in overall today), but this housing crisis is driven by exclusion and privilege, not necessarily "normal economics."

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Well if you average the entire Bay Area, places like Brentwood and Antioch will bring down the average. But SF is #3 priciest per sq. ft. in the US behind NYC and HNL. Versus the whole world, SF is not that bad, but real estate is really messed up in older, more cramped cities in the EU and Asia.

http://curbed.com/archives/2011/09/27/heres-a-chart-of-the-worlds-cities-by-price-per-square-foot.php

It's not even about rent vs. own. Renting is very pricey too, obviously. I think one aspect of the problem is that landlords are taking rent-controlled (or regular) units off the market in order to convert them to TIC/condos for more $, or sell the whole bldg to speculators because there is no much insane pent-up demand and high willingness to pay from the upper classes. So rental supply is going down, which causes rents to rise too.

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If you hit Wikipedia for median income by city in ca you'll find that those areas are also quite rich.  Housing doesn't happen in a vacuum.  More a function of income and the real problem is income inequality

It also happens with respect to density. The more houses/apartments available = the cheaper the rent. Nimbys in the Bay Area would like to still have their .5 acre ranch houses on some of the most valuable land on earth, meaning that the poors have to live 2 hours commute from their jobs.

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Totally agree. The social justice element also comes into play that historically lower income, blue collar, often minority neighborhoods (Mission, Castro, etc.) used to be less desirable for yuppies and therefore more affordable and off the radar of speculators. But now they are hipster paradises, and with gentrification, the "traditional residents" can't even maintain their old lives and are priced out of the market. I guess that is like economic eminent domain.

Measures like rent control or mandated affordable housing are often economically inefficient and flawed (because they are written and implemented by flawed bureaucrats, like healthcare.gov), but sometime optimal economics must take a back seat to concerns about fairness and social values (see taxes, labor laws). I'd rather have confusing rent control laws and too high minimum wage than a total lack of regulation (at least imperfect laws are a springboard for iteration and improvement). Because as you said, with the huge inequality gap, what is the point for the poorest 60% to struggle so hard trying to fit into the rich man's world (yet not really be allowed to live in the rich man's world... I guess like the "Elysium" plot, which I did not see)? Most people with a shred of heart would probably agree that there is something inherently unjust with greedy politicians/companies and wealthy invaders "annexing" and developing suddenly desirable land, which leads to the economic eviction of the residents who were there before (through legal market mechanisms and the landlords/property owners). Pardon my melodrama, but it's scarily similar to the Trail of Tears.

I heard an interview about the subject a while back, and one new SF resident and tech employee said something like, "Assholes (his word) like me can afford $3K/1BR rent and are making it hard on the previous residents, but hey, I want to live here." At least he had clear eyes. It's just sad because everyone has one life to live, and we don't want to compromise or suffer if we don't have to - even at cost to others (esp. when others' suffering at our hands is mostly invisible). Sorry for stereotyping, but I think the Gen X-ers and Millennials especially (present company excluded) really fixate on what I like to call "life maximization." Similar to their work habits of optimizing, achieving, and disrupting everything, in life they want it their way and they want it all. Best job, best home, best network, best gear, best marathon time, best family... best, best, best. When that is not really the goal but the status quo expectation in SF/Si Valley (when excellent becomes average/normal, what do all the sub-excellent people do?), then that doesn't really encourage a culture of togetherness and SHARING. We don't need the best life... can't we just enjoy our regular life? Isn't enough enough? Can I give a little up and still live a plenty comfy life so that more needy people can get a break? People don't ask these questions of themselves enough (myself included).

Sharing is the key I think. This isn't my world, it's our world. There is PLENTY of food, money, and room for everyone if we share reasonably, but the problem is the fucking 1% and the institutions who advocate for them just don't want to (and don't have to). Americans and some other cultures really fixate on fencing off what's yours and amassing/diving the pie, so that breeds an adversarial, zero-sum attitude that conservatives really eat up. Therefore, it's especially sad when educated, young, open-minded "liberal" West Coast people do the same and may not even realize it. At least liberals don't bad-mouth and hate the people they marginalize, but that doesn't leave them in the clear (myself included).

The best teachers I have had in my life (not necessarily in school) really cared about expanding the pie rather than dividing it. How can we make everyone happier? Any asshole with a bit of smarts can compete and beat others. But a truly smart, wise person goes out of his/her way to cooperate, find ways to align incentives, and make everyone better off - not just him/herself. For all the smug talent and genius brains and big money in the Bay, that skill is scarily absent. Don't get me wrong, some people practice it faithfully and I am in awe of them, but it's not enough to stem the tide. That's why I probably will leave this place next year, as much as it makes me sad and for all I am leaving behind. I don't want my kid to grow up in such a culture. At least I will make room for another person/family to have my stressful job and little slice of condo.

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Sorry I realize that I was unclear about one point in my last rant (unclear about at least one point, haha).

The Google buses are often scapegoats but not really the problem. By no means am I placing the bulk of the blame on the young, techie hipsters invading the Bay. They are not really the 1% and not the real driver of the problem, they are just a "symptom". Except for Zuck who bought a whole block of SF for privacy haha.

As usual, the problem is the old rich Nimby fucks that A alluded to. They are the ones who gobbled up all the choice land decades ago, and who currently occupy all the seats of political power and business influence. They are the ones who invested/profited from the tech boom (more than the current workforce), and stand to profit from real estate development and appreciation. They took so much that the current hipsters are practically forced to gentrify the Mission and maybe Hunter's Point soon. I bet most hipsters would much rather live in Nob Hill or downtown Paly, but all the old rich pricks there are just cramping their style anyway (and even a Twitter engineer still can't afford a $5M Nob Hill pad).

As A alluded to, we are not in the '50s Levittowns anymore, or not even in the '90s nouveau-riche gated golf communities. But the assholes want to keep us in the past, because they like the status and lifestyle they have, and don't want to give up even a shred to others. The city of Paris (and many other ancient cities) is like a 10-layer cake. New generations tear down the old crap that isn't working anymore and rebuild to fit the needs of the current people. We aren't really doing that, because the old fossils control the bulldozers. So all we have is SF Elysium vs. Vallejo. 

But "the people" are fighting back, and at least voted down a luxury condo development on the Embarcadero. It's a small victory in a long war that the good guys will almost certainly lose. But we might as well smoke a blunt and celebrate while we can. :)

http://www.sfgate.com/bayarea/nevius/article/Following-the-bankroll-for-SF-s-Propositions-B-C-4961999.php
http://www.npr.org/templates/story/story.php?storyId=243537913&ft=1&f=2&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NprProgramsATC+%28NPR+Programs%3A+All+Things+Considered%29&utm_content=Yahoo+Search+Results 

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i once heard someone say cities are either places to live or places people come to make money.  he was talking about SF and that we were at a crossroads.  it was when matt gonzalez was running for mayor against gavin Newsome.  The speaker was making the case that if Newsome wins, the city will lose its soul, it's artist community, it's diversity of culture and class.  that's what you're looking at here….plain and simple.  and, you know what?  the city sucks now.  It's filled with people who are in a hurry, who lay on their horns, who yell.  

Quality of Life

Now that we're all "adults" and have to fend for ourselves in the "real world", I was thinking about the American Dream and what opportunities are available for people like us. I address you guys since we had fairly similar upbringings.

As far as I can tell, all of us did what was expected of us by our parents, teachers, and mentors. We studied hard, mostly stayed out of trouble (or avoided Johnny Law at least), did fine in college, and maybe even pursued additional education/credentials. Growing up, I think there was the assumption that if we jumped through those hoops, we would be "entitled" to some job security, summer holidays, the picket fence, station wagon + 2.5 kids, and comfortable retirement. Maybe some of us expected to conquer the world and have the mansion, stock options, and Benz, but at minimum I think we considered ourselves middle class. But I guess that is really an antiquated myth and nothing is guaranteed. I mean... I know we weren't Paris Hilton, but we grew up mostly without want or worry. Our parents provided for us and we hit the real world with a lot of advantages vs. other people. It's not like we're recent immigrants having to battle culture shock, language barrier, green card paperwork, and support relatives back home.

But for most of us, rent is kicking our ass (and it's not like we live luxuriously; many of us in old, small apts or just renting a room) and saving is pretty hard considering the rising costs of basic living essentials, car/student loan payments, etc. Maybe we can move farther away for cheaper rent, but then commute is a killer. We come home fairly drained, maybe getting a simple meal together and watching TV for a bit before bed and repeating the cycle. Maybe some of us have to study at night or attend evening classes to try to better our situations. I can't imagine how much time proper parenting would require on top of our current commitments. I know we're lucky that we don't have to work 3 minimum-wage jobs to even hope to make ends meet, but that's what education supposedly bought us - though what has it really gotten us so far? I know we're still young and our earning power will increase with time, but really - do you expect your salaries to increase 10% annually and get promoted on a regular basis, without some major luck, achievements, or extra education? Some white-collar salaries aren't even keeping up with inflation, even though worker productivity and business efficiency have steadily climbed since the 1980's. Though operating costs and employee benefits have also become much more expensive.

Our career counselors in high school basically told us to find something we enjoy, study that in college, and we'll be fine. Great in theory. But if we don't have a medical degree, JD, software engineer, or MBA/finance, how the heck are we supposed to save up a nest egg for a small house or even a condo ($500,000+ in some parts of the US), and future tuition for our kids (probably will be 50% higher than our day)? Some of our high-achieving friends already have homes and nice cars, but it's not easy street for professionals either; they have huge school debt and may work grueling hours to earn the bucks (they don't throw money at you for nothing). And the extra time/stress you need for higher degrees takes away from your personal life, and you may not even be able to start thinking about spouse/family until you're balding and need Viagra. There isn't enough time for everything. Many scientists and engineers don't make great money either, unless they have 10 years experience or become managers (it also depends a lot on Wall St. and the company/institution you decide to peg your future to). I guess some of us may happen to excel in a niche talent (dunk a basketball, entertainment, art, etc.), so we can be well compensated for a more recreational career. Of course I'm being cynical, and plenty of people make a good living in other jobs like accounting or retail. Even less-educated folks can do well in construction, real estate, etc. But it's a riskier proposition, and many more fail than succeed.

Like those "Rich Dad, Poor Dad" books, I guess we can't count on salary to provide for us and our loved ones. The theory goes that we should invest in real estate, bonds, and the market too, but when do we have the time to learn those skills or the capital necessary for substantial investing? Instead we have to place our money and trust with a corrupt mutual fund manager and pay the annual "account maintenance fee", even if we're losing money. Plus plenty of people lose their shirts playing with fire and not knowing what they're doing. Or others just get lucky with high-risk speculation, or being at Google at the right time (but how many other startups failed and their millions of options worth zilch?). Then there are those who were honest and worked hard, yet saw their 401(k)'s dissolve at Enron or Worldcom. The Baby Boomers in CA were so lucky and saw the Dow quadruple and home prices rise 3X during their mid-to-late careers when they actually had job security and money to invest. No wonder why all of our folks are getting their homes remodeled, buying luxury cars, and taking more vacations now. Well, they earned it. Though I doubt any of us are expecting the Dow to similarly reach 48,000 and homes to appreciate so much in our lifetimes.

The frustrating part is I hate thinking about all this money and job stuff, but we almost have no choice. If you're not improving, you're falling behind (or so it feels). I just want to be left alone and make an honest living not beholden to anything or anyone (isn't that freedom and liberty?). I was this close to living in a hut in Africa for F sakes. I still wear clothes from the '90s, and I LIKE it that way. I don't need much. Unfortunately I wasted a lot of money after my dad died, as an immature, self-destructive way of dealing with my grief, which I regret a lot. I also spent too much on my wedding, but my excuse was the missus had expensive tastes haha. However, now I would like a small, safe 2BR/2BA cottage a decent distance from work, with a small garden and a dog running around. So far, I can only afford that in East Palo Alto or the bad part of Oakland/Hayward (which are not close to work either). I would like to provide for my wife so maybe she doesn't have to work full time if she doesn't want to, or maybe can raise our kids instead of relying on the TV babysitter. I would like to pursue side interests and do other things with my life besides work, eat, and sleep. Most days I just put my head down and get through it, but I guess I felt like venting now. I know I am just being a whining baby and should sack it up like everyone else (plus I don't have it that bad), but I bet you guys feel similarly sometimes. Our lives have challenges, but it could be a lot worse. Though we supposedly did "everything right" in our childhoods and now we are supposed to reap the rewards of a more comfortable adult existence, right? But one challenge just seems to lead to a new, larger one.

So I really wish someone would have better prepared us for this reality. I guess there's no way a suburban parent or underpaid public employee could have predicted $5 gas and the effects of globalization when we were kids, but still. Or maybe you guys knew it all along and I was the only naive one? I almost wish someone told us to forget about finding a job that we like and just get proficient at boring, marketable skills. Now I understand why my doctor relatives force their kids to go to medical school (if they can get accepted), because they think it gives them a good shot at a better life over most other careers (though it takes a lot of sacrifice too). I guess it seems that we don't have access to the time or resources that we thought we would as part of the white-collar middle class existence. Our American existence is greedier, more expensive, more complicated, faster, and more unstable than when we were in high school, and the trend won't reverse any time soon. And we're not even at the point yet when a sibling may get in deep debt, we have to care for our kids AND aging parents, and we're always one car accident or medical crisis away from fiancial ruin. We also have our own retirements to worry about. Well, somehow in Western Europe most "common folk" like us get paid less in their jobs, yet enjoy free or very cheap health care/university/pension, more vacation and a higher quality of life. Their societies aren't falling apart and their companies aren't kaput either.

All in all, I'd hope that we're happy and comfortable with our living situations. I know many people have it much harder than us. But supposedly we did everything "right" in our youth and got a head start in the rat race. I am sure many of our parents were able to afford a mortgage for a small home after 5 years of working or so. I don't think that will be the case for us, though of course the world is very different now. Work sucks, but I guess there are some redeeming and enjoyable aspects of it. And once in a while, we can save up for a vacation or new toy. But is that all there is to it?

Are US doctors paid too much?

http://www.startribune.com/politics/national/congress/22708684.html?location_refer=Opinion

Recently there has been some squabbling over budget cuts to Medicare/Medicaid and state-sponsored health care that may cause doctors to decline services to those patients, because they won't be "properly compensated" by the government. So the doctors are revolting, and Bush has threatened to veto any cuts proposed by Congress. Right now they're debating a 10% cut, actually as part of a mechanism that was previously approved in the event that costs exceed certain markers, which is happening now in a big way. The pay cut survived the House, but will probably stall in the Senate and will definitely be killed at the Oval Office.

I know doctors are businessmen/women too, and they have a bottom line to maintain. They are skilled professionals who went through rigorous training ($30,000/year tuition + living expenses), and deserve compensation for their critical contributions to society. But I don't know how they can morally refuse to treat needy people dependent on government health care, just because they'll be reimbursed $2,700 for an arthroscopic knee surgery instead of the "going rate" of $3,000. Are they pinching pennies that much, even with a $200,000 salary? The cars they drive surely don't suggest it.

And what other industry but health care can the providers dictate costs and the consumers just have to accept it? Equally greedy HMOs and others might try to negotiate a "fairer" price, but in the end the doctors bill Medicare as they like, and our tax dollars go up in smoke (in many cases, overcharging Uncle Sam). In other markets like automobiles and air travel, competitors are cutting prices left and right in order to secure customers. But can we "shop around" for doctors who can provide the best service at the most reasonable cost? We just go where our insurance tells us to go, and actually most of the process is a black box to us. I guess most of us just feel lucky that we weren't refused care!

There was an interesting NYT article last year (below) discussing whether US doctors are paid too much, and whether they have more impact on the insanely high costs of health care than even prescription drugs. Pharmaceuticals are 30-50% more expensive in the US vs. Europe, but doctors' salaries are sometimes 100% more. A typical UK doctor in 2002 made $60-120,000 and lives well, if you've seen Michael Moore's "Sicko". But US specialists make $300-400,000, and we all know the young doctors graduating from school all want to be specialists. But how many radiologists and anesthesiologists do we need, versus the pediatricians and GPs who deal with normal patient problems and practice normal medicine "in the trenches" (ironically the lowest-paid doctors)? Relatively few new doctors are going into those "unglamorous" fields versus the huge demand, so no wonder we have to import them from other nations - yet some patients complain about foreign accents and demand an "American" doctor. Well, blame the American medical system and its students then, who would rather be Nip/Tuck than Patch Adams!

Because the fees they charge are so high (and patients have no choice but to pay), doctors also have a financial incentive to over-prescribe treatment in order to make more money. I am sure we can Google many examples of this to back up the NYT's claim, as well as cases of defrauding Medicare/Medicaid. And unlike Europe, Medicare lacks the resources (and/or motivation) to scrutinize a doctor's treatment request, veto if unnecessary, or maybe suggest a cheaper alternative. Doctors in other developed nations are more-or-less paid flat salaries from their national health systems, with performance-based incentives. Their doctors are paid less, yet deliver better services on average, based on WHO rankings and other studies. In fact, socialized medicine nations like the UK, Canada, and Australia outperformed the US in terms of medical errors and patient satisfaction (http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/tb/2074). So maybe there is a real problem with the "quantity over quality" approach by many US doctors.

From NYT:

"Almost all expenditures pass through the pen of a doctor," he said. So a doctor may decide to perform a test that costs a total of $4,000 in order to make $800 for himself — when a cheaper test might work equally well. "This is a highly inefficient way to pay doctors," Dr. Bach said.

Medicare, especially, does not like to second-guess doctors' clinical decisions, said Dr. Stephen Zuckerman, a health economist at the Urban Institute. "There's not a lot of utilization review or prior authorization in Medicare," he said. "If you're doing the work, you can expect to get paid."

As a result, doctors have steadily increased the number of procedures they perform on Medicare beneficiaries — and thus have increased their income from Medicare, Dr. Zuckerman said. But the extra procedures have not helped patients' health much, he said. "I don't think there's any real strong evidence of improvements in health status."

Private insurers like H.M.O.'s are more aggressive than Medicare in second-guessing physicians' clinical decisions, and they will refuse to pay for imaging scans or other expensive new procedures. Now Medicare and private insurers are moving cautiously to change the current system. Recently, they have proposed pay-for-performance measures that would give doctors small bonuses if their care meets the standards set by national medical organizations such as the American Heart Association.

BUT all those measures are a minor fix, said Dr. Alan Garber, a practicing internist and the director of the Center for Health Policy at Stanford University. Instead, he argues, the United States should move toward paying doctors fixed salaries, plus bonuses based on the health of the patients they care for.

Even in the existing system, some health insurers, notably Kaiser Permanente, already have large networks of salaried doctors. But it would require doctors to give up some of their autonomy and move into larger group practices or work directly for insurers, a step they have been reluctant to take. About 40 percent of doctors are in single or two-physician practices, Dr. Garber said.

Nor is the American Medical Association, which represents doctors, eager for wholesale changes in the system, said Dr. Edward L. Langston, chairman of the A.M.A. board.

But Dr. Goldman of RAND said that doctors are misleading themselves if they think the current system serves patients' needs. For example, if a diabetic patient visits a doctor, he said, "the doctor is paid to check his feet, they're paid to check his eyes; they're not paid to make sure he goes out and exercises and really, that may be the most important thing."

"The whole health-care system is set up to pay for services that are rendered," he said, "when the patient, and society, is interested in health."


Oh yeah, and I forgot to mention that doctors are often paid the same from insurance/Uncle Sam whether they perform a procedure brilliantly or totally botch it. Some legislation was proposed to only pay doctors in full upon successful completion of the procedure, but of course the physician's lobby fought it and watered it down. Now the government doesn't have to pay doctors for a few specific errors, like if surgical instruments are left in patients, catheters are improperly implanted, and won't cover the costs of preventable hospital-acquired infections. Doctors warned that such rules would cause legal nightmares and actually reduce overall care, as patients would have to disclose their entire medical histories before doctors would agree to treat them, so various post-op complications wouldn't be blamed on them. And then doctors might even refuse to treat the most at-risk patients to avert potential consequences. Well, I guess we shouldn't revere doctors as selfless heroes. They look after #1 just like the rest of us.

http://www.washingtontimes.com/news/2007/aug/28/medicare-and-medical-mistakes/
http://www.bcbs.com/news/national/medicare-won-t-pay-for-hospital-mistakes.html

So if our presidential candidates do seriously want to overhaul and improve the US health system, trimming doctors' salaries may be a politically daunting but absolutely necessary component of the solution.

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http://www.nytimes.com/2007/07/29/weekinreview/29berenson.html?_r=1&oref=slogin


The Nation
Sending Back the Doctor's Bill


By ALEX BERENSON
Published: July 29, 2007

Cheaper iPhone

http://tech.yahoo.com/blogs/patterson/22479

Gotta hand it to His Steveness. Stick it to the most die-hard crack-addict Apple fans last year, who just had to have it on release day, with a bloated $600 8 GB iPhone v1.0 (with slow-ass EDGE Internet connectivity and triangulation instead of GPS). And then when sales didn't meet projections, the stock suffered somewhat, over 50% of people in one survey said that the iPhone's price was prohibitive, and rival companies developing more affordable smart-touch phone alternatives, they unveiled a better 3G/GPS 8 GB iPhone that is over 50% cheaper ($199)! Now Apple gets the best of both worlds - over-charging the Mac-addicts, and under-cutting the competition. Well, at least A's prophecy rang true that iPhone v2.0 would be less elitist and more accessible/affordable for the masses, even if most cell phone users wouldn't really use all those bells and whistles, and couldn't afford a $100+/month cell plan.