We’re going to be discussing the recession and what it means to us as individuals and a society over the next several days.  It seemed like the best way to kick off this conversation was by positing the titular question and getting a grip on what this whole economic downturn thing really means in terms of actual impacts.

Here we are, stuck right in the midst of a recession.  Now what?  What happens during a recession, really?  Understanding the various definitions of the term “recession” (and I think we’re meeting all of them these days) let’s us know where we are, but it doesn’t really help to explain what’s going to happen to us on a real level.  The link between reductions in the GDP and what’s happening in your neck of the woods (or on TV for that matter) isn’t allows easy to spot.

Here’s a quick rundown of some of the things that happen during recessions.  

First, unemployment increases.  This is probably the most obvious impact of a prolonged economic downturn.  In recessions, we’re producing less.  That reduced output requires less labor.  Recessions also tend to put people into a “savings mode” where they spend less, reducing demand for products, which further decreases the need for workers.  Companies struggling to stay profitable and/or afloat will also look at payroll cuts in the form of layoffs or firings as one way to decrease their expenditures.  It’s a nasty little circle, with which negative consequence feeding another.  

Second, the stock market takes a dive.  It’s not hard to figure out why that happens, is it?  Companies are selling less and making less money.  That doesn’t make their stock an attractive investment.  Worries about job and income stability encourage people to become more conservative with their money.  They save instead of purchasing stock or making other, higher-risk investments.  It’s another ugly loop.  People invest less, which drives the market down.  People see the market going down and become even less likely to invest.  

Third, interest rates sink.  The Fed tries to abbreviate the downturn by making capital more readily available to those who could use it to make purchases and longer-term investments.  The hope is that the lower rates will encourage the kind of spending that might begin to right the lilting economic ship.

Fourth, people go absolutely nuts.  During a recession, one may wonder if the doors to a million asylums were kicked open or if some enemy of the state dumped some mind-altering substance into the drinking water.  

Politicians seem to manifest the symptoms of recession looniness first.  They use the downturn as an excuse to pont the finger at rivals for power.  They leverage fear and concern to support their own agendas.  They take bizarre positions on the farthest ends of both political poles.  

The craziness extends to the rest of the population.  Encouraged by media personalities and the above-referenced politicos who have a twisted need to whip people into a frenzy, millions begin to quickly smell conspiracy and develop a thirst for the blood of anyone they can even link remotely to the overall state of the economy.

 Throughout the whirlwind of rants, polemics and fabrications, no one seems to take even a modicum of personal responsibility for the situation.

Okay, the last one is my take on the situation.  The first three, on the other hand are accepted widely as results common to most recessions.

In North Carolina, WRAL-5 is running one of their “5 on Your Side” television news features.  The station reminds its viewers of how important it is to have a plan to pay off debt and it outlines a few simple steps everyone can take to reduce their debt burden.

Within a few minutes of that story hitting the air, the CBS affiliate will share another message to its viewing audience–this time in the form of paid advertising.  Barely removed from dire warnings about reducing debt and comments from experts who recommend a “cash diet”, WRAL will turn into a platform for selling everything from unneeded $20 novelty products to automobiles that cost in excess of $35,000 (financed over 60 months, of course).

It’s a mixed message, to say the least.  While the news crews are smart enough to assemble warnings against debt extension and overspending in a tight ec0nomy, the station can’t raise the money necessary to make the pronouncements unless someone is willing to pony up for advertising.

And advertisers aren’t going to do that if the “5 on Your Side” message of personal responsibility sinks in with the audience.  If people really do go on a cash diet, WRAL-5 will be suffer the consequences.

The station isn’t alone, of course.  The same story, or variations of it, is repeated in every media market.

KLTV-7 in Tyler, Texas, is offering advice on managing credit card bills, encouraging more responsible spending.  Meanwhile, the homepage of the television station’s website is running an ad from JB Byrider, a sub-prime used car chain with a very questionable financing reputation.

Baltimore, Maryland’s, ABC-2 wants you to pay off debt and to take control of your credit cards.  They put together a week’s worth of tip segments to kick off the new year.  I’m willing to bet that at least a handful of slickly-produced ads encouraging irresponsible or unnecessary spending are going to find their way into tonight’s broadcasts of Wife Swap and SuperNanny.

It’s the same story on every commercial station, of course.  Advertising pays the bills and it only cuts checks because it convinces people to spend money.  Those news pieces reminding people to pay off debt?  The stations couldn’t afford it if they worked too well.

The fact that news departments are willing to act in direct contradiction (at least in one segment per evening) with the commercial viability of the station could be a good sign.  It’s an indicator that cash doesn’t yet completely buy and sell the news.  We should be thankful for that.

But the underlying lesson of this split personality is somewhat troubling.  Is it possible that, from news director to ad buyer, everyone knows a 2-minute “pay off debt” segment simply can’t overpower twenty-three hours and fifty-eight minutes of hyper-consumerism and tempting advertising?

The “Kill Your Television” crowd may be a little over the top, but they might be onto something.  Comments like those made by John Heckman Wright do have resonance:

Marketing, particularly in the form of television commercials, has so desensitized the viewing public to these connections, through constant repetition, that the rest of the story is no longer necessary in order to sale a product. The general viewing public needs only the symbols, the punch lines, whereas we need a marketer to draw logical, thoughtful connections before hear the persuasion. In essence, by giving up television, the husband and I have become bad consumers. The easy jargon of the marketer fails on us because we do not make such simple connections. Our minds are focused on our lives, and we do not “turn off” several hours each night for a marketer to sale us the latest “must have” product.

On the other hand, maybe the do-gooders at Delaware’s WOBC-TV will make a difference as they continue their Wednesday and Friday partnership with Consumer Reports.  They’re willing to preach the gospel of responsible money management as a sliver of their newscast twice a week, after all.

Personal finance is all about watching your money. You need to spend, invest and save wisely to reach your maximum potential.

As someone with an interest in personal finance, I’m a massive fan of consumer education. Smart consumers spend more wisely and make better decisions.

I want you to avoid bad deals and bad companies. I strongly support online research as a means of protecting your interests as a consumer. Knowledge really is power and individual consumer self-empowerment is great.

So, it would stand to reason that I’m also a fan of websites dedicated to revealing scams and rip-offs, right?

Wrong.

At least I’m not a big fan of the most successful online “pro consumer” site and I’m actually very suspicious of many others.

The reigning champ among sites that purport to give consumers the low-down on bad businesses is Ed Magdeson’s Rip Off Report. For reasons that defy both logic and Google’s stated preferences, Rip Off Report is often one of the top results when you query search engines with company names.  It’s a busy place, frequented by thousands upon thousands of Internet users looking for information about businesses.

If you aren’t familiar with the way Rip Off Report works, here it is in a nutshell:  Anyone can sign up with the site and then submit a warning or complaint about a business that consumers engaged in pre-purchase research can then find.

That sounds good, but the reality is a little stickier.  Although I’m sure there have been many people who have avoided bad deals because they read a post on Rip Off Report, there are big problems with relying upon it for smart guidance.

Many of these reasons to be wary of Rip Off Report apply to other similar sites, where user-generated content or reviews serve as foundational material, by the way.

Here’s why you need to take those negative reviews with a grain of salt (and then some).

The customer isn’t always right. I know that people love to say that the customer is always right, but that doesn’t make it true.  Anyone who’s ever worked in a retail environment knows that a hefty percentage of customers are very wrong.  They’ll also tell you that the ones who are the most wrong are also the ones who are most likely to complain.  The folks who are willing to take the time and effort to unload on someone via Rip Off Report may not be your best source of entirely accurate and sane assessments of situations and transactions.

There’s zero editorial control. There’s very, very little exercise of editorial control at Rip Off Report. That isn’t an accident, either.  The lack of editorial meddling is one of the reasons why its ownership can deftly avoid losing defamation lawsuits via the safe harbor provisions of existing laws.  In any case, though, no one is actually monitoring or investigating the often wild complaints lodged by site users.  These entries could’ve come from a perfectly reasonable person who wants to warn others of bad business tactics.  They could also come from a frustrated fiction writer on a two-week whiskey bender who has a series of psych diagnoses and has opted not refill necessary prescriptions.  The comments can be 100% accurate or complete fabrications and no one is testing them before publication at the site.

Where there’s a lot of smoke… Rip Off Report is a fairly frequent target of lawsuits.  Some are tossed out, some are settled and others end up resulting in uncontested judgments against the site’s ownership. We can argue about the legal and overall merit of individual cases, but when you start hearing the same accusations from a variety of seemingly reputable people, you might reasonably assume that something might be wrong.

Following the money. If you run a business and someone unleashes on you with a scathing review, you can get the folks at Rip Off Report to intervene on your behalf.  You’ll just need to pay them.  Alot.  Charging companies to battle negative reviews appears to be a key component of the ROR business strategy.  That’s alarming, to say the least.

There are other reasons to question the veracity of the complaints lodged at sites like Rip Off Report. Some contributors are obviously disturbed and/or of limited intelligence.  You’ll notice a variety of obviously baseless reports and a tendency amongst those “squeaky wheels” to wedge any inconvenience into the “evil conspiracy” category.

Being a smart consumer is great.  Self-education can be one of the best ways to protect your money.  Sites like Rip Off Report, however, aren’t the best place to get an education.

In our next post, we’ll discuss a few ways to get better information about the quality and legitimacy of those with whom your considering doing business and a few other consumer education tips.

NOTE:  By the way, if you’re interested in learning more about ROR and its founder, I strongly recommend a rather lengthy article that originally appeared in the Phoenix New Times.  I think it’s at least somewhat fair to the site and its operator, Ed Magdeson, and it’s a lot more comprehensive than other criticisms of the site.  Let me add that whether you love or hate the site, it’s certainly a very interesting story.

Recently, WiseBread ran a post about lessons we can learn from the Depression.  It’s an interesting look at how we can apply the survival strategies of the past to our own modern lives.

The post made me think of Studs Terkel, the famed author and columnist, who died a few weeks ago at the age of 96. His oral histories of America, gleaned from countless hours of interviews with people from all walks of life, provided readers and listeners with a fantastic opportunity to experience history and to live the lives of others.

They say that those who ignore history are doomed to repeat it.  There’s a great deal of truth in that old cliche, but I prefer to look at reflections on the past in a more positive light:  Those who understand history gain wisdom they can use to improve their futures.

With respect to personal finance, that brings us back to Terkel.  With our economy experiencing significant difficulties and many worried that things will get worse before they get better, it’s a great time to revisit Terkel’s Hard Times:  An Oral History of the Great Depression.

You can pick up Hard Times at just about any bookstore.  Those of us who are intensely frugal can pick it up at the public library or in paperback.  The audio of Terkel’s interviews is available online and much of it has been recently rebroadcast on National Public Radio.

It’s a fascinating look back on the hardest of economic times, featuring interviews with people from all walks of life and uncovering truths, perspectives and little known lessons those folks gleaned from the Depression.  Right now, that knowledge has some tremendous value.

I’m not convinced we’re heading for a repeat of the 1930s, but there is no doubt that things are getting a lot tougher for many people.  Unemployment claims are up.  Home foreclosures are up.  Incomes are down.  So, although I’m not expecting to see a Hooverville (Bushville?) popping up in the empty lots down the street, I do realize that many Americans are experiencing hard times.  It’s more likely that we’re in the front end of a recession, but that doesn’t mean that we can’t learn from those who experienced the horrible intensity of the Great Depression.

The beauty of Hard Times is that Terkel creates a comprehensive picture of the time via a series of smaller stories.  We’re sort of accustomed to hearing about the misery of Grapes of Wrath migrant workers and displaced Okies, but they’re only part of the story.

Sure, Terkel spends time with them, but he also worked with those who spent those years as federal relief workers.  He talked to the rich, who found ways to hang onto their money while others went broke.  He even found and interviewed the folks who found a way to improve their financial situation as the Great Depression crushed so many others.

Take for instance the story of an “ad man” (link to audio) who found opportunity in the changing habits of those suffering through the Depression.  He was able to discover a way to leverage that change to help himself and his toothpaste-making client.  It’s a tiny sliver of the Depression, but it demonstrates how positive potential exists even in the toughest of circumstances.

Reliving the nightmare of an economy in chaos with Terkel’s interview subjects is a great way to round out your perspective on personal finance.  The horror stories remind us of what really matters in our lives.  Hearing about the mistakes of others gives us an idea of how to protect ourselves from greater forces.

Reading tales of hard-nosed survivors provides inspiration and an understanding that our current economic problems are tiny and beatable, in relative terms.  We learn about the degradations of poverty, the humiliation of being forced to rely on others.  We also learn about the flip-side of that sadness–the sense of personal responsibility that gives our nation and economy hope.

Hard Times is a lesson in perspective, which makes it a very different kind of “personal finance book”.  You won’t find checklists, bullet points, and step-by-step instructions for improving your finances.  Terkel himself modestly claimed, “[t]his is a memory book rather than one of hard fact and precise statistic….The precise fact or the precise date is of small consequence. This is not a lawyer’s brief nor an annotated sociological treatise. It is simply an attempt to get the story of the holocaust known as The Great Depression from an improvised battallion of survivors.”

You won’t find to-do lists.  You will, however, find a layered picture of what money really means to society.  Each interview is a parable, leaving the reader with an opportunity to uncover valuable truths they can apply to today.

September 15, 2008 was a sad day on Wall St.  Yesterday, three well respected, heavy hitters died.  Lehman Brothers, AIG & Merrill Lynch were all taken out in one foul swoop.

As I reminiscence about the better days, I can hardly hold back my tears.

The Lehman Brothers… high hopes, big dreams and endless optimism.

One of the world’s largest investment banks, Been around over 158 years, Managed over 280 billion dollars in assets, 30,000 employees, named one of Business Weeks best performing companies in 2008… as of yesterday BANKRUPT.

I can remember when AIG just a baby waddling around, trying to make his way to the top of the finance world.

One of the world’s leading insurance corporations, been around 41 years (the baby of the group), over 100,000 fulltime employees, made it to number 10 on the 2007 Fortune 500… One foot in the grave, the other on a banana peel.

Merrill Lynch, ahhh… Merrill, there are so many things I can say about Merrill.  He was the tenacious, strong willed… the driven type.  There was never an obstacle he could not overcome.

Another one of the world’s largest investment banks, been around over 94 years, 60,000 employees, Fortune 500 company… and as of yesterday SOLD to Bank of America.

The Lehman Brothers, AIG & Merrill Lynch each had their own methods, but they all had the same goal… to be industry leaders in the world of finance.  And they were the leaders… and this is why I am deeply saddened by their untimely demise.

The collapse of these three highly respected mega giants has got me seriously thinking about the poor state of the US economy.

What is the cause of this economic crisis?

Yeah, we all understand that the market must correct itself every now and then, but these current economic conditions are unheard of. We are living through the most massive market collapse since the Great Depression.  And why?

Well there have been several major events that lead to this.  The one that gets the most attention is the real estate market.  Call it incompetence, call it greed… but for whatever reason bankers were handing out loans to anyone who walked in the door.  This was their dastardly attempt to milk consumers and increase the bottom line…. And the plan backfired.

Even if you overstuff a money bag, it will start busting at the seams.  Eventually, the bag will have to give way and all the money will start flying out.  But the bankers gave no regard for the eventual consequences.  And my goodness… what a destructive consequence it has been?  Financial institutions are crumbling all around us.  And not just the little local bank in Podunk, KY… no I am talking HUGE - everybody knows their name - institutions are being chopped at the knees… one after another, falling all over each other… it is like they are in a competition to see who can hit the ground the fastest… and the hardest.

And what else contributed to this crisis… the unveiling of creative accounting that exists to create an illusion of financial stability.  Believe me folks, creative accounting is alive and well.  In the midst of the crisis, executives are doing everything they can to make their companies appear stable.  I do not see how Lehman Brothers can be on the Fortune 500 list a few months ago and bankrupt today.  It just sounds fishy to me.  But in the end… it will all come to light (Enron).

Another contributing factor… a loss of investor confidence.  With all the trickery, lies and deceit… how can and why would investors be optimistic?  I, for one, have lost complete confidence in those companies I once admired and respected.

The culmination of all of this has resulted in the worse financial crisis in history.

The government has made some modest attempts to save the economy…  brokering deals between drowning institutions (Merrill Lynch) and damn near drowning institutions (Bank of America), coming to the rescue of Fannie Mae and Freddie Mac, insuring billions of losses from deposit accounts. But is it not just the financial markets that have us in a rut… our own federal government is in a four billion dollar… no, I am sorry… I mean four hundred billion dollar deficit!  With a $400 billion dollar deficit already, the Iraqi war that seems as if it will never end, rising unemployment rates, and the domino effects of bank failures…  how many more hand outs can the feds afford to give?

Can the economy be revived?

The economy will fixed itself.  It has no choice… eventually it will hit the bottom and the only place to go is up.  By the time the market rebounds it would have shaken off all of the dead weight… no more greedy executives, no more careless boards of directors,  more accountability, and  many new lessons learned from those companies that did not make it.

This massive market correction is a test.  The survival of the fittest… and in the end… the best of the best will be revealed…  badly damaged and bleeding all over… but stronger, more learned and ready to propel back to the top.

The high price of gas has been affecting all of us… big and small… huge corporations and little ole you and me.  For you and I… we have to fill a 10 maybe 20 gallon gas tank at the most.  But imagine the hit if we had to fuel a few jet engines several times a day.  The cost could run into the tens of thousands of dollars… and possibly more.

Well this exuberant fuel cost is common place in the airline industry.  And of course they find ways to pass these costs down to the consumer.  $15 dollars to check your first bag, $25 for the second, $100 for bags 3, 4, and 5… $200 for number 6!!

But just recently Jet Blue tacked on yet another fee.

Anyone who flies knows how uncomfortable airline seats can be.  You don’t have enough room to stretch your legs, you are forced to rub elbows (literally) with your neighbor, the awkwardly shaped head rest exists only put a crook in your neck… just a miserable experience all around.  The only bit of comfort we get is a salty bag of peanuts (that’ll cost you about $2 or 3 bucks on some flights), a two ounce cup of soda, and a 3 by 4 inch barely fluffy pillow… a pillow that now costs $7 bucks on board Jet Blue flights!

$7 bucks for those scanty airplane pillows?  Yes, you heard it right… seven dollars! (ok well a blanket comes with it, but still…this nickel and diming is getting ridiculous) That equates to roughly two gallons of gas in my part of the world.

This new $7 pillow charge has gotten a few folks a bit annoyed.  And rightfully so… those skimpy pillows hardly help to prevent the crook in your neck.  But the thing I don’t get is who came up with this bright idea?

Of course charging seven dollars for a pillow is going to cause some bad press.  But didn’t Jet Blue’s PR folks realize that before they made this big announcement?

Don’t get me wrong… free enterprise is a beautiful thing.  I am all for businesses improving the bottom line.  But if I were the Jet Blue people, I would have went about it a different way.

Ok let’s say I am Jet Blue. Gas prices are killing me, so I need to figure a way to mitigate the losses.  After thinking of several ways, I pick the easiest… stick it to the consumer.  I do some calculating… 129 plus 10 divided by 19 squared, carry the three, take the natural log and round up to 7.  Alright so $7 is the magic number.  Now I gotta shift it to the customers.

So do I come right out and tell the customer something as preposterous as “I need $7 for that pillow, please Mr. Had A Long Day, Had One Too Many Drinks, Wife Is Sleeping Around, Kids Hate My Guts.”  No, I don’t say that… that might set someone off.

Or at the very least… Reporters start reporting, Bloggers start blogging, Bad PR starts rolling in… all about this $7 pillow fee.

What I would do is… slide it under the radar by jacking up the ticket price by $7.  Will anyone even notice that the $542 ticket is now $549… I seriously doubt it.  Then I would put a spin on it.  I would give every passenger a lovely airline pillow and blanket kit, free… courtesy of me, Jet Blue.  So you see, now I look like the good guy… is Delta or American Airlines giving away free pillows?… No.  But here at Jet Blue we do… and we do because we value our customers!

Problem solved… I got my seven dollars, you got your pillow, no bad press, plus a lil good press for giving away free pillows… and no one is the wiser to the whole plan.  No, it is not deceit, is it a play on words… marketing, PR, whatever you wanna call it.

Extreme Makeover Home Edition… have you seen it?  It is the cousin to Extreme Makeover (People Edition).

Anyway, the premise of the show… they select a family that has a very sad and heart wrenching story (disabled children, poor living conditions, too many children, you name it, they’ve shown it).  The show pays off the family’s mortgage.  Then a team of architects, plumbers, designers, electricians, builders, and hundreds of other volunteers demolish the family’s existing home.  After that, the team rebuilds a luxurious, mammoth-sized, fairytale like dream home in its place.

The fantasy home, all of its contents, and usually other gifts like scholarships, cash, cars, etc. are bestowed onto the family… scot-free! This copious gesture serves to uplift the family and to help them better cope with their unfortunate circumstances.  Well… at least for the time being…

Recently stories have been surfacing about how some Extreme Makeover Home Edition families have been losing their mansions!  So they no longer have their extravagant made over house, but they also no longer have the shabby house that it replaced.

Case # 2382G - The Harper’s

Patricia and Milton Harper of Lake City, GA, married 24 years, three children, the wife - a homemaker, the husband - works in the home security business.

Their tragic story: They lived in the projects of New York.  They lost a child that choked to death while eating his food.  The incident motivated them to seek something better.  They decided to work hard, save up and finally moved to Georgia and purchased their first home.

The house, however, was a doozy.  Every time it rained, raw sewerage would back up into their house. The horrid conditions forced the family to live in their van.  The van was totalled in an accident. Long story short… they got dealt a bad hand.

Three years ago, Extreme Makeover decided to help them out.  Nearly 1800 people took on the task of overhauling the Harper’s house. And what an overhaul it was? 6500 square feet, 5 bedrooms, 7 bathrooms, stone fireplaces (with an “s”), a music room, a theater room, an office… a castle! On top of the house, they also received nearly a quarter of a million dollars in cash.

How’s that for a gift?

But apparently the Harper’s fell onto hard times.  Back in May, they put the house up for sale… asking price, $950,000.  The house did not sell back then.  However, due to some unfortunate circumstance, the house will be up for sale… or rather up for auction on August 5^th.  The house is being auctioned off as a result of a foreclosure.

This auction comes as the sad and final end to an unbelievable story.  But I am left to ponder… who is to blame?

Most people are blaming the Harper’s.  Some have called them ungrateful… and even stupid.  While I feel that they are partially to blame… I also want to point a finger at the bank, Chase, and at the show, Extreme Makeover.

Here is my question to Chase… Why would you loan nearly a half a million dollars to a couple that survives on the income of a home security worker?  Seriously, did you really think they were going to be able to pay you back?

And to the Extreme Makeover folks… Ok, so you want to help a family that is down and out. Really, I applaud your philanthropy.  But have ya’ll ever heard the old Chinese proverb: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.  For an extra four or five hundred dollars, ya’ll could have thrown in a financial planning class as a part of the package.

Well that’s my 2 cents, for what it’s worth.

Hey, who doesn’t love to get free stuff?

I know I do, so even though I’m not a pop drinker and haven’t personally had an ice cold Coca Cola since I was 14, when I learned that I could get free stuff at www.mycokerewards.com just by entering the numbers inside the bottle caps, I was on it like Sherlock on Watson.

Everyone else in family drinks Coke of course, and so do all the people around me at work. Do they save their bottle caps so they can get the free stuff at the My Coke Rewards website? No they do not. They are busy people. I’m a busy person too, but come on, FREE STUFF! We’re talking F-R-E-E here, just for entering some numbers at a soft drink website.

So now, guess who volunteers to dispose of everyone’s pesky bottle caps? You got it: that little old tea drinker, Me! I don’t feel guilty either, because like I said, I buy tanker truckloads of this fizzy stuff for my loved ones, and have for years.

It’s kind of like when you don’t have kids and you go to all the wedding showers and then baby showers for the kids of people you know, and then finally, after many years of being bored out of your mind and never winning the door prize, it’s your kid’s turn. So even though you think showers were invented by God as a punishment for women’s descent from Eve (and a harsh punishment too) you invite every single person whose shower you ever attended and all their relatives too. It’s your right. It’s your turn. And they damn well better show up!

But wait, you say, maybe you don’t want to have free stuff all over your house that has the words Coca Cola plastered all over it. Maybe you don’t want red Coke pants and a white Coke T-shirt with red lettering and a red Coke gym bag to carry with your red Coke sneakers, and so on, and so forth.

No problem!

You can use your reward points to enter sweepstakes at www.mycokerewards.com for everything from tickets to Six Flags to Nascar events. You can also save up your rewards points to earn discounts at other cool retailers like Best Buy, use your points for music downloads for your phone or I-Pod, save your points for coupons for free Blockbuster movie rentals, or you can donate your rewards points to your favorite school.

Best of all, you don’t have to only drink Coke to qualify for the rewards points. You can find these points on the inside of the caps of all Coca Cola soft drink products, including Dasani bottled water, Barq’s Root Beer, Vault Energy Drinks, Powerade, Fanta and Faygo drinks.

So, drink pop, or don’t. But do register at My Coke Rewards and enter those bottle cap numbers whenever you have a few spare minutes. They add up really fast, and you know what that means…

FREE STUFF!!

Dear Exxon,

Last year you made $40.6 billion in profit. I made $24,600. (Mine wasn’t all profit though.) Clearly, we move in different circles. Your ways are not my ways. Your kung fu is greater than my kung fu. Your gross receipts for 2007 alone topped out at over $404 billion, which is bigger than the gross domestic product of no fewer than 120 nations.

Wow.

My writing profits for 2007 totaled about $78, (which is what the US is currently shooting for in terms of gross domestic product. We’ll get there, I’ve no doubt.)

I have a question to ask you, if you have just a minute.

I am doing much better this year, and I see that so are you, with over $10 billion in profits in the first 2008 quarter alone, and the price of gasoline now pushing $4.50 or higher in lots of parts of the US, and diesel even higher, so high, truck drivers in Spain are acting up. Good for you. That’s what capitalism is all about, right? Profit, profit, profit. And you are leading the pack, holding the torch as it were (don’t hold it too close to all that oil though…you know what happened at that BP refinery). I commend you for your initiative and success.

Here’s my question:

Why did you find it necessary to fight the $2.5 billion in punitive damages for the 1989 Exxon Valdez spill, a spill that released 10.8 million gallons of crude oil into Alaska’s Prudhoe Bay and covered 11,000 square miles of ocean, a spill you admit was your fault and no one else’s. I mean, you have the money, right? We’re talking 1989 here. Since 1989, you’ve made so much profit that all the zeros won’t even fit into this blog, so let’s not even go there.

Perhaps you have forgotten that the Exxon Valdez oil spill instantly killed somewhere between 250 and 500 thousand sea birds, 250 bald eagles (an American icon which at that time I believe was actually an endangered species to boot), and 22 Orca whales, not to mention sea creatures of all kinds too numerous to list much less count.

Thousands of volunteers saved you most of the painful and hopeless work of trying to save these rare, suffering animals so you could instead take way too long finding a subcontractor to spray deadly chemical dispersants, surfactants, and solvents (which, damn the bad luck, didn’t work very well) all over the already poisoned Bay. So it’s not like you didn’t try at all, and to be perfectly fair, cleaning up oily messes is not really your thing. You are in the business of finding and selling oily messes.

Still, what did it cost you to fight this thing legally for 19 years running?

Corporate lawyers don’t work cheap. Even the ambulance chasers around here get $100 an hour, so I know you had to spend far more than the penalty just arguing the penalty in court after court after court.

What’s up with that?

Were you afraid that if you were held to some basic, minimal standard of corporate responsibility it would end up cutting into your impressive profits? If so, I wish you’d have called me first. You don’t have sic a squad of corporate attorneys on people and birds and fish already drenched in oil to preserve your right to be irresponsible. All you really have to do is get one of your pals elected President (oh, I forgot, you did that already), and then hire a big, glossy advertising firm to make beautiful commercials with lots of politically correct ‘green’ imagery and multinational persons wandering around on sand dunes and seashores and stuff like that, all to show how sensitive and environmental you are. That’s what BP and Dow Chemical do, and it works great.

People will believe anything if it’s on TV.

I know you won’t answer my letter. I know you are busy. It’s just that, for the life of me, I can’t understand why you would spend more than the original $2.5 billion, just to get it reduced to $500 million 19 years later. Maybe you aren’t aware of this, but right now, people in this country don’t like you very much. People think you are greedy and uncaring and tyrannical. People think you are gouging them and doing whatever you please and damn the consequences. When you don’t bother to even respond to those kinds of feelings, we start to feel like you don’t really care about us very much.

At the beginning of 2007 NOAA determined that you still have 26,000 gallons of crude oil poisoning the sandy soil of Pruhoe Bay Alaska. I just want to ask you this one favor:

Please don’t charge them for that oil.

Thanks for listening. Your little capitalist fan,

Pam, PFA

Today’s insurance topic concerns something near and dear to most of our hearts: Our stuff!

Is your stuff adequately covered by your insurance policy?

If you have homeowners or renters insurance you may assume that all your stuff is automatically covered, and that if something happens to it you will have no trouble getting it replaced. Just a quick call to your insurance carrier and they cut you a check, right?

Not necessarily.

The first thing you want to do to make sure that your stuff is covered is check your policy to see if you have replacement cost coverage or actual cash value coverage (often referred to as ACV). Replacement cost coverage means just what it sounds like it means: your stuff is insured for what it would actually cost you to go out and buy a new one of whatever it was that just got stolen or destroyed. So if you have a ten year old refrigerator that burns up in a house fire, even if you could only get $50 for it at a garage sale before it burned, your insurance company will give you $600 or $800 or whatever amount of money it takes to buy a similar refrigerator new. If you have ACV, you get $50 and that’s it, (after your deductible is met).

Replacement cost coverage on your personal property is usually not much more expensive than ACV coverage, and it is worth every cent. You may think you don’t need it, but consider what it would cost you to replace every spoon, washcloth, shirt, and piece of furniture you own in the event of a total loss. You’d be surprised how fast that all adds up. So don’t scrimp in this area of your policy.

Now that we’ve made sure you have replacement cost coverage on your home or renter’s policy for all your stuff, you can relax, right?

No, not yet.

Some categories of personal property are covered for very limited amounts on a standard homeowners policy, and usually for theft only; not fire, windstorm, or any number of other normally covered perils. If you own any items in any of these categories, you have to add them one by one to your policy by ’scheduling’ them. Usually this involves getting appraisals, sending the appraisals to your insurance company, and paying a small additional premium each year. By scheduling special kinds of property at a small additional cost, you can insure them for their actual value and insure them against all perils instead of just theft.

Property that falls into this category includes fine jewelry and precious metals, coin collections, antiques, fine art and other collectible items, firearms and other weapons, money, bonds, and some kinds of electronic and business equipment. If you have anything of special value to you, call your agent right now and make sure it doesn’t fall into a category that leaves you with limited coverage. Wedding rings are a good example of a type of personal property that people often neglect to schedule, only to discover later that the rings aren’t fully covered under the terms of their policy.

Another special category of property you might want to consider purchasing additional coverage for is your computer and all its peripheral equipment and software. Many companies have restrictions on how much they will cover when it comes to computers and software, but they offer inexpensive additional coverage that can be purchased. A computer rider is worth every cent, especially if you travel frequently with a laptop.

Do you have a basement family room or office? If so, check with your agent before you assume your property is covered for basement water damage. In some states you can add this coverage, but in others you can’t. Most people don’t realize that a homeowners policy only covers the home from the foundation up, and the foundation itself is excluded. So if water comes in through foundation cracks or seepage, you may find you have no coverage at all if your stuff is damaged while in your basement. Ask if you can purchase “water back-up coverage,” which if available typically can be purchased in $10,000 increments.

How about some good news? I do have some of that too. If your son or daughter is away at college in a dorm room, all of their stuff will usually be covered under the terms of your policy just as if it was still in your house. If they move to an off-campus apartment though, you have to purchase them a renter’s policy, (if you can find someone to write one for a college rental!)

Finally, if you travel, your stuff is covered for up to 10% of the total personal property limit, anywhere in the world. So if you have $150,000 of personal property coverage on your home policy, you have $15,000 in coverage for the stuff you pack in your suitcase. Good to know!

The best ways to make sure you have the coverage you need for the stuff you have are 1) to ask lots of questions, and 2) to read your policy!

When you don’t need that coverage, you never think about it; but the last thing you want is to be surprised in a bad way when you do need it! So take a minute now, dig that policy out, call your agent, and make sure all your ducks are in a nice, neat row.

One day, you’ll be glad you did!