Updated on 04.25.11

The Simple Dollar Weekly Roundup: Tangled Edition

Trent Hamm

Early this week, my daughter caught a case of the flu. She was feverish and spent most of Monday dozing on the couch. Her only requests for most of the day was that I sit near her, keep her water bottle filled, and that we watch Tangled. I watched it with her three times that day.

Every time I watch a new computer animated movie, I can’t help but notice how much smoother it gets and how much more lifelike the details get, even in a film with obviously cartoonish elements like this one.

I can’t help but wonder how long it will be before computer animated films are indistinguishable from normal film. After that, how long before home computers and electronics can produce such things on the fly?

What on earth will my grandchildren look at as normal?

Prospect Theory and Financial Decision Making I was actually planning out a post along these lines (and using Google to research it a bit) when I found this great article on the application of prospect theory to personal finance. To put it simply, human minds use poor comparisons to judge the prospects of an investment or a financial choice. (@ gen y wealth)

Breaking Free from Consumerist Chains Your life is not defined by the products you own. But, if it’s not defined by that, what defines it? (@ zen habits)

The Realization This is the new normal. $4 a gallon gas is the new normal. 10% unemployment is the new normal. How do we move forward from here? (@ seth godin)

How I Learned About Frugality from De-Cluttering I had a similar epiphany a few years ago. (@ get rich slowly)

Money Saving Vacation Websites for After You Purchase Your Tickets We’re using these for Seattle already. (@ frugal dad)

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  1. Mary says:

    Great Article on Prospect Theory!
    The writer mentions 5 ways we make financial decisions that are bad.

    The writer then gives ways to avoid these financial decision pitfalls.

    When my husband and I were first married we bought a bookcase for $100. We were just walking through Ikea and we saw this lovely bookcase that, compared to the other bookcases, was really nice and very cheap. It was an impulse buy and the moment we drove off the Ikea lot I knew we had made a bad financial choice. If we had $100 to spend willy nilly on a bookcase that we didn’t need, then we could certainly have afforded the clothes that I needed at that time or the textbooks that my husband needed for his classes.
    Before purchasing the bookcase we should have thought about that $100 in terms of the things we needed instead of the impulsive “deal” that was before us.

  2. Becca says:

    The new normal:

    To a great extent energy prices are a supply-and-demand thing. There was a pre-recession gas spike in 2008, then prices dropped during the recession, and in part are rebounding as consumers have more money and are using more gas. I get it is about speculation and other things too. But in supply-and-demand things, a small decline or increase in usage greatly alters the overall price. So if you use less gas, in the immediate picture, your personal costs drops. In the whole of the economy you are also doing your part to reduce prices at the pump by contributing less to the demand.

    Health insurance costs are also rapidly escalating. There is a national debate about Medicare and deficits. Again we can get into political debates, but that is not my purpose here. If you are unhappy, in the short term you do all you can to be as healthy as you can, as in a few decades how you live today will greatly impact your own health costs… as well as costs to the society as a whole. Lifestyle illnesses cost our country about a trillion dollars a year. So I regularly ask myself if I am doing all I can to minimize my health-care costs as it effects others in my insurance pool driving up my own costs, and long term it will affect how much my kids pay for my Medicare. Along with this, it drives me nuts how people take risks for fun (drive in a snowstorm to go to a party, risky outdoor sports and so on). Don’t do risk for fun.

    So my point is that if you are unhappy with the new normal, take care of your own situation in the short term, as this likely will immediately reduce your costs, and to be sure you contribute as little as you can to the bigger picture of rising costs. If you are not doing your part, you don’t get to complain.

  3. Nicole says:

    @ Becca: Gosh. I hope you don’t lose sleep over eating a hamburger or become racked with guilt over leaving your house. Obviously I’m teasing a bit, but only a bit — life is fraught with risk. There’s no way to hide from it. I’ve known people who wouldn’t mind meeting their fate while doing something they care about, rather than waiting for it to come to them in the course of more mundane affairs. I imagine the situation is a little different when one has dependents; however, I don’t really feel it’s my place to say whether they are right or wrong, smart or stupid.

  4. valleycat1 says:

    Seth’s follow up post to the one Trent links to is also interesting & wraps up his thought nicely.

    Re Becca – there’s foolish risk (driving unnecessarily in a snow storm, or participating in a risky sport without proper training or equipment) and calculated/informed risk (my DH skis in the high backcountry, but has gone to all kinds of training & researches to get the best gear – plus he has 50 years of skiing under his belt – & as Nicole says, when he dies he’d rather ddo so up on a mountain in the snow than sitting around the house & aging out).

  5. Johanna says:

    @Becca: As I understand it, the rising cost of healthcare really doesn’t have that much to do with “lifestyle illnesses” (I take it this is code for “fat people”) – rather, it’s largely due to the continual development of more and more new drugs and treatments with little concern for whether they’re cost effective or not.

    I’m not one to criticize anyone else for wanting to take care of their own health for their own benefit. But I hope you’re not one of those people who’s quick to sneer at those with “lifestyle illnesses” – or anyone else who’s insufficiently healthy for your taste – for not “doing their part.” A costly illness or injury can strike anyone at any time.

  6. Becca says:

    Joanne: Michelle Obama is spearheading a campaign against childhood obesity. She is being criticized by the far right for nanny-state policies. I think she is right to say that there are things people can do to combat obesity.

  7. Johanna says:

    @Becca: Umm…so what? Just because Michelle Obama generally makes a lot more sense than the far right doesn’t mean she’s not terribly misguided on this issue.

  8. jim says:

    Obesity in USA directly accounts for about 5% of our healthcare spending. So there is absolutely a direct healthcare cost associated with it. And that cost has gone up in recent decades since obesity levels in US has gone up. Obesity is a contributor to both the total cost and the recent increases in costs. However obesity alone certainly doesn’t account for much of healthcare sending to triple in the past 20 years.

  9. Becca says:

    Jim, I just did a quick google and the cost is higher than 5%. One report said health care costs are 35% higher for obese individuals. Several recent sites say 10% of the total. The thing to remember that this cost will rise as the current generation ages.
    Johanna is also correct that new technologies and drugs are a major driver. I have no sense which percentage are not needed. It is clear that the available advancements in technology caused my baby delivery to be about twice as expensive than it would have been even a decade ago.
    Johanna is also correct that very often people are blindsided by unpredictable illnesses. Life is that way, just like someone can run a stop sign and injure you. But that some things are completely unpredictable doesn’t mean we don’t need to bother with the parts we do have some control over.

  10. Katie says:

    The point isn’t that most people attribute higher healthcare costs to obesity; most people do and a Google search will reflect that. The point is that there’s a growing amount of research that suggests those costs should be attributed to diet and activity-level independent of weight. Rethinking Thin, by NYT reporter Gina Kolata is an excellent summary of this research.

  11. Katie says:

    (Not, of course, that that means we should switch to demonizing people on diet and exercise grounds rather than their weight. Johanna’s points apply throughout.)

  12. lurker carl says:

    Health care costs are rising due to the ever increasing numbers of folks surviving ailments and injuries that promptly killed us not so many years ago. Rehabilitation followed by years of post-recovery care and medications is considerably more expensive than death. Health care is only one of the costs our society bears for longer lifespans.

  13. Johanna says:

    @Katie: You’re right about the weight versus diet/exercise thing, of course, but the point is actually that no matter what the actual cause, “those costs” are only a tiny fraction of the increase in healthcare spending. Even if you take the high-end estimate of 10% of healthcare spending, and say that it’s all due to obesity – well, my health insurance premiums (which I imagine are typical) can go up by more than 10% in one year. So as I said, the notion that healthcare costs are higher because of fat people is just nonsense.

  14. Allison says:

    But what about chronic diseases like type 2 diabetes, which (I think) is clearly linked to obesity and which means lifelong increased costs? Although I guess you could say the big costs are from poorly managed diabetes, not just having the disease itself.

  15. Johanna says:

    @Allison: I don’t want to get too deep into a discussion of specific diseases and what they cost to treat, but there are also illnesses that are just as clearly linked to thinness. Osteoporosis is one example. That goes some way (if not all the way) toward balancing out the costs of treating diseases linked to obesity.

    Also, keep in mind that correlation does not equal causation. So when you hear about a disease that’s “clearly linked” to obesity, it’s possible that people are gaining weight because they’re sick, rather than getting sick because they’ve gained weight. (Just like with other diseases, people lose weight because they’re sick rather than getting sick because they’re thin.) Or, it’s possible that both the disease and the weight gain are caused by some other factor. That’s just one more reason why choosing “obesity” as the thing to campaign against is misguided.

    “Fat is unhealthy” is one of those things that “everyone knows” is true because it’s been repeated so often. But when you actually look into what evidence there is to back it up, it turns out that it’s really pretty shaky.

  16. Kat says:

    There have also been studies that show that obese people and smokers die younger, so while these “lifestyles” may cost a lot annually, the individuals cost less in overall care in their lifetimes because their lifetimes are shorter. Eventually most people will be treated for cancer, dementia, heart issues, etc at some point, even healthy people die of something. “Poor lifestyle people” get their 10 years of treatment at age 50, instead of 80, and thus have 30 fewer years of checkups, illnesses, Medicare, assisted living, etc. These studies are HUGELY unpopular and therefore not well published because it looks like “just let them die young – it saves money.” Elderly spend more on healthcare than anyone else – and that’s because of advances in medicine in the past years.

  17. Korea Beat says:

    I don’t agree that what we are in now has to be the “new normal” because of the “end of the industrial revolution”. After all, that ended a long time ago and we have long been a modern service-based economy. The causes of the current depression are not the structural ones you would see in such a transition — otherwise unemployment would be up in some industries and down in others, rather than up across the board as is the actual case — but come from the collapse of the financial sector in 2008. Fundamentally it is no different from other downturns provoked by financial collapse.

  18. Paula says:

    The main point is people, as usual, misapply correlation v. causation. Obesity DOES NOT cause the many diseases listed. It is often correlative WITH the named diseases, but obesity is not the CAUSE of the disease. A removal of excess weight does not mean that the disease will be ameliorated or cured. Take five seconds and go to the American Diabetes Association website and read about weight and diabetes. Also, you cannot, let me repeat, you **CAN**NOT** decide someone’s health level on one data point (i.e. weight). There are extremely unhealthy thin people and very healthy fat people, and vice versa.

  19. Mary says:

    Excellent article but….I DO have to ask so what do we do? My husband & I are 56 & 54 years old, he has been an electrician for 38 years and self-employed with his own Electrical Contractor business for 34 years. When our first of 3 children was born I became a stay at home Mom & then did all the office work for our business. Now there is no work in N Michigan for his trade. No jobs. What do we do? The few jobs advertised we/he don’t fit the bill. What do we do? No savings, nada.

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