Friday, October 1, 2010

note from tim

Dorice and I visit your blog routinely to keep up with the improvements taking place at Paya. 

I came across [the following] article and felt a tremendous amount of shame.  We (Dorice and I) feel we've learned to appreciate the small blessings in life and to live simply.  It's one of the things that drove us to buy property on Helene [island adjacent to Roatan] by Jim and Judith because there we feel like we can simplify our lives and get out of this rat race of ever expanding consumerism that plagues the U.S. and especially the generation of children coming up.  People "freak out" because their lawn doesn't look better than their neighbors, or their car isn't the right "classy" model or their house isn't a "McMansion".  Kids think if they don't get a car at 16 years old and go to an Ivy League school...all is lost.  It's just obscene.  This article definitely illustrates the phenomenon.  Travelling around the world and seeing the REAL need makes seeing this kind of rampant greed at home  hard to take.

The article Tim is referring to (from Yahoo News):

I am fascinated by the Todd Henderson controversy. As you may have read by now, Henderson is the University of Chicago law professor who blogged that he is not rich, even though he earns more than $250,000 a year with his physician wife. That puts their household in roughly the top 3 percent of earners in the U.S., and is four times the median income.
The Bush administration tax cuts enacted a decade ago are close to expiring, and the Obama administration wants to keep most of the cuts in place -- but only for households making less than $250,000 a year.
That's what Henderson was blogging about when he wrote: "A quick look at our family budget, which I will happily share with the White House, will show (President Obama) that, like many Americans, we are just getting by despite seeming to be rich. We aren't." (His post can be seen here, where Henderson also offers his response to the controversy.)
The blogosphere went ballistic about Henderson's post. New York Times columnist Paul Krugman called Henderson the "whining Chicago professor" and The Wall Street Journal wrote a snappy piece on how Henderson might reduce his overhead. (Henderson came up in a discussion about money and happiness that I participated in with Swarthmore professor Barry Schwartz on Minnesota NPR's "Midmorning" program last week.)
The brouhaha is ripe with psychological lessons. First, Henderson is a classic example of the hedonic treadmill at work. First articulated by psychologists in the late 1960s, the hedonic treadmill speaks to the phenomenon of human adaptation. We buy something new, we're thrilled with it, then we get used to it, then we want something bigger and better and we're unhappy when we don't get it (or, in Henderson's case, we end up feeling "poor.")
For instance, Henderson spends more money to live in a home that's close to his work, versus a cheaper residence farther away. Maybe he used to have a long commute, navigating snarled Chicago traffic or standing on a freezing platform waiting for a train. The first time he breezed to his office with no commuter headaches, or arrived home in time for dinner with the kids, must have felt like a miracle. Now it's just the way life is.
Or does Henderson recall the first time the lawn service showed up and he didn't have to spend a Saturday morning raking leaves and pulling weeds? That must have been a thrill. But in time, the lawn guy becomes just another monthly obligation -- a luxury transformed into a necessity. Henderson writes that $250,000 a year doesn't translate into an opulent lifestyle, but in one respect, it does.
He is time affluent. The minimal commute, the nanny and the lawn service all buy him more time to do what he wants outside the workplace. Numerous studies have shown people who are time affluent are happier than those who are materially affluent.
But there's apparently not enough money left over for Henderson to use that extra time to buy material goods or experiences. So he needs to get creative. Henderson might boost his well-being by letting the lawn guy go and using the money to create a vegetable garden that he and his kids could work on together every weekend. It sounds like a chore, but the activity would be new, challenging and might inspire "flow" -- a concept developed by psychologist Mihaly Csikszentmihalyi. (Gardening would also create family memories and lower the grocery bill. I have lovely childhood memories of digging with my dad and plucking plump tomatoes off the vines on the side of our house. The squirrels thwarted our attempt to grow corn.)
Another intriguing aspect of this discussion is that $250,000 helps buy something that's crucial in the U.S, where the social net isn't going to catch you if you fall down -- and that's security. Henderson has a retirement account that he regularly contributes to, and his university job likely comes with benefits such as health, life and disability insurance. So if one of the bread winners can't work or dies, the kids are all right.
While security is a critical component of wealth, it's like a sunny day in California -- taken for granted until a rare storm rolls in. Henderson could boost his happiness by writing down what he is grateful for one day a week, changing the domains from relationships to health to finances to keep the exercise fresh.
A final juicy issue underlying the controversy is that of expectations. People start their careers, hopefully earn more money over time, and develop a mental picture of what life will be like when they hit a certain income level. Because of social mobility (and social networking), they meet people who earn much less and much more. They look at the people who earn more and imagine they will have similar lifestyles when they earn enough to be called "rich."
But we never know the financial circumstances behind the public appearance. We don't know if someone has a trust fund, got really lucky on a tech stock, has a maxed-out home equity line of credit or is swimming in a sea of credit card debt. We don't know if the grandparents are footing the bill for college or a wealthy aunt helped out with the home down payment. Instead, we mistakenly assume they are just like us, and our consumption patterns should be just like theirs.
But our decisions about money have to be based solely on our values, on our most important aspirations, on what we want to achieve in our lives -- and then it's all about priorities. If Henderson values sending his kids to the best private schools, for instance, there may not be a whole lot left in the budget for home renovations. If he values a popular location for his home, with its attendant property taxes and maintenance costs, there's probably not going to be a lot left for travel. And if he started his career with a boatload of student debt, the menu of choices will be much narrower than the income would imply.
But frankly, that discussion is offensive, particularly in this economy, when for millions of people the choice is not travel or private school versus real estate, but utilities versus food, or rent versus car payments.
If anything, I appreciated Henderson's honesty. It inspired me to revisit my definition of "rich," and come away with a deeper appreciation for my family, friends, neighbors, good health and the wildly underappreciated wealth of living in a free nation.

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