My word, what a year for financial blunders. Well, technically “This Week in Financial Blunders” hasn’t been running for a full year, but the Zing Blog would be ill-advised not to include a “best of” list like every other publication in the blogosphere. Unfortunately, only people who work at Freddie Mac would read a “Top 12 Biggest Moves in the Primary Mortgage Market Survey” blog, so instead we’ve compiled our six favorite financial blunders from the past year. The biggest, weirdest, saddest and funniest are all here, so read them and weep. Weep for joy or sadness, whichever you prefer.
Too Narcissistic for My Blood
Rich people tend to be the butt of many jokes because of their wealth, and their critics just got some more ammo in that fight. A recent study published in the SAGE Journals’ Personality and Social Psychology Bulletin titled “Wealth and the Inflated Self” has an abstract that begins like this: “Americans may be more narcissistic now than ever, but narcissism is not evenly distributed across social strata.” In simpler terms, the rich tend to be more self-absorbed than any other social class. Over multiple surveys, Paul K. Piff of University of California, Berkeley, discovered the rich have “greater psychological entitlement and narcissistic personality tendencies.” They were also more likely to look in a mirror if the option was presented. (Published August 29)
The entire town of Rosia Montana in Romania might see cyanide and gold heading their way, but not if its citizens have anything to say about it. In a story that sounds like a Captain Planet episode horribly realized, Romanian President Traian Basescu set a proposal that would allow Canadian mining company Gabriel Resources to set up Europe’s largest gold mine, using cyanide as the method of mining said gold. Thousands of protestors rallied against this decision, forcing the president to consider a referendum that may postpone the project. If the project is approved, Gabriel Industries would yield a 25% stake in the mine and 6% of royalties would go to Romania, but at the cost of opening up a mine so large it would be visible from space with near certain environmental hazards from the use of cyanide. Supporters of the mine argue it would bring significant job growth and revenue to the country. Protests are expected to continue while the proposal is debated in parliament over the next few weeks. (Published September 6)
As of this past Wednesday, hospital care is about to become a very competitive business. The Obama Administration, furthering their initiative on America’s healthcare, released charge data for more than 3,000 hospitals. What this means is that patients have the option to shop around for the cheapest possible treatment for their service. The survey of the 3,000 were for hospitals that get Medicare Inpatient Prospective Payment System (IPPS) payments, and it shows the average costs for the top 100 most frequently billed inpatient services.
Assuming that all hospitals charged around the same is an extremely optimistic assumption: The Huffington Post was one of the three publications that received advance access to this data from the Obama Administration (The New York Times and Washington Post as well), and their story focused on the horrible differences in pricing that hospitals practice today. For treating chronic obstructive pulmonary disease in the New York/New Jersey area, Lincoln Medical and Mental Health Center in the Bronx charges $7,044, while just 30 miles away, Bayonne Hospital Center charges $99,690 for the same service. Experts interviewed go on to explain that there seems to be no rhyme or reason as to why hospitals that are so close to each other can have charges that are tens of thousands of dollars different. It’s a sobering and important thing to know, because most of these outrageous medical charges that pull people into bankruptcy are for the 49 million Americans that are uninsured. It’s a hefty document, but go to CMS.Gov to look at a sample of hospitals in your area to find the most inexpensive option. (Published May 10)
Will Beer for Work
Amsterdam, a country known for its debaucherous activities, is testing a new work program for chronic alcoholics. As the New York Times reported, Amsterdam is currently testing a “beer-for-work” program which gives workers five to seven beers during the work day, as well as half a packet of rolling tobacco, lunch and ten euros a day (about $13.55). “This is not a beer project – it is a cleaning project,” said district mayor of eastern Amsterdam, Fatima Elatik. The project was started almost a year ago by the Rainbow Foundation, a government-funded group that focuses on rehabilitation through work, and the NYT article points out that despite mayor Elatik being a practicing Muslim who does not approve of drinking, she remains enthusiastic about the program. The people who enroll in the program act as a cleaning crew and pick up trash as they go. There are people who criticize the program, calling it a waste of government funds, but many remain on the waiting list hoping to get a job that will help them cope with their addiction. Fred Schiphorst, a worker in the program, said “I’m not proud of being an alcoholic, but I am proud to have a job again.” (Published December 5)
Poor Money, More Problems
Some people find it easy to dismiss the poor. If someone doesn’t have money to cover their expenses, that’s their problem, right? It was their poor money management that got them there in the first place. That’s completely backwards, according to a study published in the journal titled “Science” (later reported by Slate). The study involved two experiments, one to examine poverty-stricken individuals in the first world (U.S.) and another to examine the poverty-stricken in the third world (specifically India). In New Jersey, they asked low- and high-income people to weigh their options on cheap and expensive car repairs. The results found that high-income people scored better on both tests, and those with low income scored the worst (as in, making poor financial decisions) when faced with an expensive car repair.
In Tamil Nadu, India, the researchers gave sugarcane farmers “cognitive tests” before and after their harvest (sugarcane being a cash crop). The results echoed the same test done in the United States: Farmers with a strong harvest scored better than poor farmers before the harvest.
The study leaves one to assume that the poor have been misconstrued for a long time. Considering other studies show the negative effects of stress and poverty already out in the world, poverty may be more of a slippery slope than originally thought. (Published September 6)
Test Your Luck
Although it’s regarded as common knowledge that these games are rigged, some people still think they have a shot at winning those sideshow attraction games that come with a carnival. Such was the case for 30-year-old New Hampshire resident Henry Gribbohm when he went to play a ball toss game known as “Tubs of Fun.” Hoping to win the grand prize of an Xbox Kinect for his kids, he ended up losing $300 in the allegedly-rigged game in minutes. Instead of taking his licks and moving on, Gribbohm took the remaining $2,300 of his life savings and blew all of it in an attempt to win; keep in mind the game costs $5 for two chances to throw the ball into the “Tub of Fun.” Gribbohm returned to the carnival the next day to protest his losses, and he ended up getting $600 back in addition to a large stuffed banana with Rastafarian dreadlocks, hat and a glazed-over smile. He has since called for more action to receive his lost funds, but there have been a few hiccups in the process. First, the carnival worker that operated “Tubs of Fun” cannot be found for further questioning. Second, the carnival, run by Fiesta Shows, was using “Tubs of Fun” from an independent contractor so they’re not liable for any faults or alleged rigging in the mechanics of the game. Oh well, he still got a Rasta banana. (Published May 3)
And those are the year’s best financial blunders. Happy new year to all of our readers and remember to comment below with any other news stories that you think beat our year’s best financial blunders.