The First 100 Days

Let's mark the first hundred days of Obama with a personal microeconomic case study.

On a cold day in January, I was in Washington to witness an inauguration that many Americans once thought unimaginable. In February, I experienced a very different cold and decidedly downbeat American moment. I joined the 651,000 people who lost jobs that month in the worst economic downturn since the Great Depression. At last count by the U.S. Bureau of Labor Statistics, 12.5 million Americans are unemployed.

This month, as President Barack Obama spoke about glimmers of hope in these dour economic times, I indeed found a tiny lifeline in his still-to-be-judged $787-billion stimulus package.

My health-care premium, a new financial demand realized after my job loss, suddenly became manageable. With a kick from a stimulus bill signed Feb. 17 by the president, my hefty $419-a-month premium that I paid in March was pared to $149 this month. That savings—a 65 percent cut covered by federal funds—was welcome relief.

I know, in some ways, that I am strangely fortunate. I am getting a handout to preserve my standard of health care at a time when millions of other hard-working people have no insurance at all. I only have to look to my family to know the hardship. One 23-year-old nephew, a film major in college, has yet to secure a fullltime job that will contribute to health care coverage.

My nephew has worked on some notable films (although the appeal of the slasher hit, My Bloody Valentine, eludes this aunt) but always on contract. For more than a year now, he has been scraping together $350 a month to pay for health and prescription coverage. Over time, that burden on his slim income may prove unsustainable.

I always enjoyed health benefits from media employers who picked up much of the monthly tab. Every news organization that hired me, since 1979, offered comprehensive health packages. The Chicago Tribune, where I worked since 2002, offered health, dental and vision coverage. But signs of stress in the news business last year, and large ad losses realized by newspapers in particular, made me wonder whether such good times could last.

Well, the Tribune Co. tumbled into disaster by early December 2008. As the paper filed for bankruptcy protection, I pursued a personal financial reckoning that proved fortuitous. I shifted investments as they matured and I put money in the bank. I also took care of big-ticket health costs by Christmas.

I thought I was ready for the worst. I imagined that I, as a single woman with no major health concerns, would likely see a monthly bill of about $300 if I lost my job and had to extend health coverage under the federal COBRA program. (I had been paying about $45 while I was employed.) Still, when the Tribune lopped the foreign staff off its organizational chart this year, I was in for an unpleasant surprise.

My health care bill was more than a third higher than I planned —and topped even my first state unemployment check.

Tribune-based health care advisers were no great help. Several told me to take a wait-and-see approach before signing up for COBRA. (COBRA is a federally mandated guarantee that basically allows a laid-off worker to pick up the cost, up to 18 months, to continue existing group health care.)

Sign up if you become ill, Tribune advisers said, or if you need to see a doctor. That can save you money at a difficult time, they said. All were dumbfounded when I balked.

What if I was in a car accident and fell into a coma? Who would sign the qualification papers, I asked. The Tribune benefits people said they had never considered that possibility.

A phone call to Ceridian Corp., the company that oversees COBRA with the Tribune Co., cleared up much of my fear. On the first call, an agent demystified my options. She also explained the stimulus possibility and that the federal government might pump money into COBRA to give a hand to millons of newly unemployed people.

She helped me navigate the company website so that I was ready to take advantage of the money when, and if, it became available. This week, the money began flowing for me.

In about three minutes of computer time, I qualified for federal funds. I was suddenly richer by $270 a month. The infusion will last for nine months—right now, that is the time limit for stimulus money for health care—but that gives me time to maneuver.

Don't mistake my thoughts as an ode to the stimulus package. Obama's package may well prove to be a beast to manage. It may lack the necessary safeguards to make sure that tax dollars are well spent. It could fall short of jumpstarting the economy or repairing consumer confidence. But it has some personal charms in these hard times of 2009.

One hundred days and counting, the administration has gotten some things right.

A Dangerous Munch Crunch

If the global economic crunch has directly affected your personal finances, consider the ripple effect on the world’s poorest countries. A scramble over food—a battle to afford the basic grains—may well be the world’s next big security risk.

The World Food Program this month updated a needs assessment for developing countries in light of the global financial tailspin. Leaders of the top industrialized countries, at a G8 agricultural meeting in Italy, read the forecast with some alarm. Just a year ago, there were riots in more than two dozen countries when food prices spiked to record highs. Emergency aid and subsequent robust harvests helped deflate that crisis. Now authorities see food risks spiraling again as wealthy countries struggle for economic equilibrium.

What happens when rich people steer away from risk, consumers stop spending and credit dries up? The faraway poor suffer the nastiest end of a financial whiplash. The WFP's report, relying on World Bank and International Monetary Fund figures, told this story:

Remittances in emerging countries—money sent home by family members working abroad—have shrunk significantly with the downturn. Primary exports in poor countries, and particularly African nations that sell goods such as copper and coffee, have fallen. Capital investments in emerging markets are shriveling.

WFP spokeswoman Brenda Barton told me that global food production has long been on the radar of the industrialized world as a humanitarian concern. Now sensitivities appear to have changed. U.S. agriculture secretary Tom Vilsack told the Financial Times at the G8 ministers meeting that global food output was coming into focus as a security risk. “This is not just about food security, this is about national security,” Vilsack said.

WFP is waiting to see if food production and hunger actually finds a place on agenda of the G8 summit now planned for July. High food prices persist—albeit lower than the crisis days of 2008—and the world’s hungry are not diminishing in number, Barton said.

More than a billion people go hungry everyday and the number is expected to climb under the current bleak economic conditions. To get a better idea of the problem, look at this data from WFP's April 24 fact sheet. Global cereal prices have fallen since the spike of 2008 but they are still 66 per cent higher than 2005.

“Unfortunately, there are always political and other forces at play when it comes to food,” Barton explained. ”It helps when there are riots on television and people see the human effect of high prices. But it was really straight-forward last year when people saw this as a price issue.

“Now, with the financial crisis, the situation has become much more complicated and far more difficult to track all factors,” Barton said. “And when you see this as a matter of security, well, that takes it to a whole new level.”