Archive for December, 2011

Points, miles, Paris and a travel editor who doesn’t get it

Posted in Uncategorized with tags , , , , on December 29, 2011 by Jim Rosenberg

Coming home from a trip to Paris this week that we put together with frequent flyer miles and hotel points, I picked up the issue of National Geographic Traveler that arrived in the mail during our absence. In it, there is an article by contributing editor Christopher Elliott in which he decries loyalty programs like frequent flyer miles and hotel points, concluding with a call to action. Based on the complicated nature of the programs and the way they distort decision making, most of us should cut up our affinity cards and kick the habit, he asserts. You can read the article here:

And if you bother to do that, I’m here to tell you that he’s absolutely wrong. Instead of coming off like his column title, “The Insider,” Elliott sounds like a rookie who is too pre-occupied with other things or has a big enough travel expense account so that he doesn’t have to worry about the cost of travel, which most people find pretty high these days. A lot of us have to be content with simply reading about it most of the time, so it’s a shame to pay for bad advice, too. We need to deal with things as they are — not what we wish they could be in a perfect, rational, fair and efficient world. Of course, points and miles distort the market and impact consumer decision-making. That’s the whole idea.

But for every disgusted consumer that says “it’s not worth it” with the loyalty programs, another first class seat or room with a view is left open for people like yours truly. As much as I appreciate it, honesty compels me to tell you that if you’re one of them, I think you and Christopher Elliott are making a mistake. Like it or not, you’re paying for those programs and so you might as well benefit from them. With banks now giving you a microscopic return on whatever money you manage to put away in savings, doesn’t it make sense to collect a comparable or sometimes even better return on the money you already have to spend?

Even for those who never travel on business or only travel a couple of times each year, the mantra applies: You can pay a little bit of attention or a lot of money. There are some key pillars upon which we have built our ability to do more with less.

First, understand that the big dollars and best experiences are often in knowing how everything fits together in your overall plan and how to compare for overall value, rather than trying to save the last dollar on every individual transaction. I recall a discussion in a Paris hotel lobby with a disenchanted guest who was staying another couple of unplanned days at full rack rate. He’d saved $100 on his round-trip ticket from New York by flying on a Middle Eastern carrier. When something happened and his flight was cancelled, he learned that the carrier only had three flights per week out of Paris, not much in the way of affiliations with other carriers and seemingly very little customer service capability outside of the cabin. Even without the big extra costs he was encountering to recover from his airline’s lack of performance, his cash savings on the ticket added up to less than the value of the miles I was getting.

Second, be flexible. The more conditions that are thrown into the mix in terms of dates, duration, destination, payment mode and other factors, the more likely it is that you will have trouble finding a great deal. Paris over Christmas was a great deal with miles and points. If we had insisted only on going to the Caribbean during Spring Break, it would have been a different story. Flexibility en route can sometimes also help pay for your travels, too. By leaving things a little loose around the edges, we’ve been able to accumulate thousands of dollars in compensation for accepting bumps on overbooked flights.

Third, plan ahead. If you want to go someplace popular in high season, then make your decisions while you still have a shot at affordable arrangements. If you’re going to beach for Spring Break, you should be shopping those fares by September and locking in before the end of November. If you’re booking accommodations that you can cancel without penalty, you can do that even earlier. Using points or miles? Be looking almost a year out and understand that you can’t book every trip for minimum miles. For some trips, it may not be worth the trade. The fact that you can’t do everything you want to at any time you feel like it for the number of points or miles that you want to trade doesn’t mean the programs aren’t worth it. There are a lot of trips that aren’t worth the money they want for them, either. Others may simply be out of reach, regardless of their high value, (like, say, a National Geographic tour.)

Fourth, learn the programs and follow them relentlessly to leverage your earnings opportunities. We use an airline-affiliated credit card to pay many everyday expenses for which we would ordinarily pay cash. It not only builds miles, but it offers free checked bags, discounted club access and some other spiffs. We also have a hotel card and another that accumulates generic credit that can be used on or even returned as a cash statement credit, (something that I never intend to do.) So, could we just go to a cash-back card and come out in the same place, in terms of pure economics? Sure – and you can also buy term life insurance and invest the difference. (How’s that been going for you?) From gas to groceries and dental work, I want something besides my receipt whenever I can get it. Loyalty programs are essentially a rebate program and not participating generally doesn’t get you a discount.

In addition to the credit toward travel that can be accumulated, the connections with travel vendors result in regular marketing communications about specials and bonus offers. Pick only a few programs and concentrate on them so you can put yourself in a position to redeem as frequently as possible, instead of accumulating a dozen orphan balances that you’ll seldom or never be able to cash in on. One of the best ways to stay up-to-the-minute is with the help of, an online community of obsessive deal hunters who don’t miss a trick.

Lastly, maximize value as you acquire and redeem points. It doesn’t make sense to burn 25,000 miles on a ticket to Orlando or Las Vegas that you could have picked up for $300. It is equally shortsighted to torch 25,000 hotel points for a $75 room. Save those points and miles for times when your avoided cost will be much higher. To evaluate, I place a value of 1.5 cents on a frequent flyer mile and a half-cent on a Hilton Honors or Priority Club point. You need to think about these numbers to make rational decisions, rather than simply throwing up your hands and deciding “it’s not worth it.” When the cost is low or moderate, pay with money and accumulate credit for bigger things later.

There is no question that we took travel loyalty programs to a level well beyond what most normal people would call reasonable or balanced, but it’s been a very worthwhile avocation since getting into the game in 1997. The result has been more than $40,000 in travel trade – including a trip to Paris this week that ran under $400 for two people which would have otherwise cost more than $3,000. (And before you buy into the “it’s not worth it” camp, just think about what it takes in gross income to come up with after-tax, discretionary money for travel.) With our current stash, we can do a couple of more like that and beyond the money, the experiences have been – as Mastercard is fond of saying — priceless.


Steady job losses under Walker’s budget: predicted and predictable

Posted in Uncategorized on December 16, 2011 by Jim Rosenberg

Let’s take a little walk down Memory Lane. Last March 18, I said:

“Sucking money out of local economies all over the state is not an effective way to grow jobs. What it really does is diminish the capacity of those economies to create wealth for most of the players involved in them. It makes the pie smaller. The hundreds of millions of dollars in revenue cuts being absorbed by counties, municipalities, school districts and public employees across Wisconsin through smaller paychecks won’t be redirected to other purposes in those communities. They’re just going to be gone. Taking more out of employee paychecks isn’t going to make your taxes go down. The poor will be poorer, services will be diminished, college tuition will be higher and some of the money that used to recirculate around your community will have disappeared like a corporate bailout.”

Two days later on March 20, we saw the same thing repeated in a Wisconsin State Journal report, with a genuine economist doing the talking:

“Gov. Scott Walker’s plans to balance the state budget by cutting spending and public workers’ take-home pay will slow the state’s economic recovery, according to projections by a UW-Madison economist. An estimated 21,843 jobs will be lost over the next year or two as public agencies and workers are able to spend less in their communities, said Steven Deller, a professor of applied economics who studied the ripple effects of Walker’s budget-repair bill and two-year budget proposal.”

Read more:

Fast forward to now and the Milwaukee Journal-Sentinel reported on Thursday that Wisconsin lost 11,700 private sector jobs last month:

The state lost an estimated 11,700 private-sector jobs in November from October, the deepest since April 2009 when the nation was in the throes of the recession, according to the Department of Workforce Development. The figures are based on a monthly government survey of employers and adjusted to smooth out recurring seasonal factors, such as winter-related slowdowns in construction or holiday hiring by retailers.

All told, the state lost an estimated 14,600 non-farm jobs when the losses in the private sector are combined with the losses in the public sector.

* * *

Wisconsin has lost jobs every single month since the Walker budget began in July and we now know that Professor Deller may have been low on his estimate of job losses last March. In fairness, we can’t attribute every job lost to Walker’s policies any more than we could give him credit every time a net job is gained. But if I’m Scott Walker, I’m plenty concerned about nearly 35,000 Wisconsin jobs turning up AWOL in the first five months of the “It’s Working” budget. It’s working, alright — and tens of thousands more people aren’t.

The facts: Wisconsin’s job totals aren’t comparing favorably to what is going on in other states and around the nation. It’s been nothing but net job losses in the Badger State in every month since the Walker budget took effect in July. The supposed property tax bonanza of hundreds of dollars per homeowner isn’t showing up for most people. Keep in mind that Walker also had the advantage of a two percent cut on Social Security payroll taxes this year to counterbalance some of the negative impact of his policies. It’s a tax cut that his GOP friends on the Hill are having trouble supporting for the coming election year because they’re afraid that President Obama will get the credit for it. Here’s hoping that some wise men show up in the east by Christmas.

Facts are stubborn things and millions of dollars of advertising claiming that “it’s working” won’t change the impact of many hundreds of millions of dollars missing from Wisconsin’s local economies, along with tens of thousands of jobs. It won’t change the fact that in the face of an underperforming economy, the Walker administration had to press many more tens of millions of dollars in cuts less than four months into his first state budget. It’s no wonder that more than a half million people have already signed petitions for a chance to stuff a lump of coal into Governor Walker’s stocking barely more than 10 months into his term.


Millionaire’s Island: Why Rich People Don’t Create Jobs: 

Analysis shows how Walker budget is costing Wisconsin jobs:

Tax cuts in hand, the right wing goes after those “job-killing” regulations

Posted in Uncategorized on December 12, 2011 by Jim Rosenberg

So, an exploratory committee has been launched to explore recalling Sen. Bob Jauch over a proposed iron ore mine in northern Wisconsin – and from this effort comes one of the better political laugh lines of the week.

“I know people will think this is partisan,” said Shirl LaBarre, spokesperson for Northern Citizens for Responsible Government. (And maybe that’s because it is. LaBarre is a former Sawyer County Republican Party chairwoman who has run losing races three times for state Assembly. So why doesn’t CRG just be honest and admit that the “R” has always stood for REPUBLICAN? And does anybody want to bet 10 grand on whether LaBarre read the proposed mining legislation before launching the recall effort?)

Wisconsin Assembly Republicans introduced a bill Thursday that would make it easier for the mine to move forward. The proposal limits legal challenges and exempts companies like Gogebic Taconite from some wetlands and other water protections. And since the GOP has the numbers in both houses of the legislature to pass their bill and a governor to sign it, it’s hard to believe that Sen. Jauch is what’s holding up Gogebic Taconite’s proposal for a $1.5 billion, 700-job mine. But the company has already threatened to abandon the project if the state doesn’t pass a bill easing permitting requirements and Jauch is already threatened with recall, even though no votes on the legislation have been held.

Meanwhile, Wisconsin Public Service Corp. issued a 12-month layoff notice to 74 employees in central Wisconsin working in two aging coal-fired power plants, citing the uncertain effect of existing and future environmental regulations on their operating costs.

“Put simply, 74 people will likely lose their jobs because of too many government regulations,” says Congressman Sean Duffy (although he doesn’t mention exactly what the regulations are, how long they have been on the books or what the overall outcome of removing them might be.)

In 2005, Illinois Attorney General Lisa Madigan called Wisconsin Energy’s Oak Creek power plant proposal “an outdated, environmentally destructive plant design that Illinois has banned for more than 30 years.” Of course, it got approved anyway and in October, a bluff collapse at the site sent coal ash and debris into Lake Michigan (something that we haven’t heard a whole lot about since):

The same “less regulation and less taxes create jobs” theme was sounded in the GOP presidential debate Saturday night. The thinking is pretty simple: that we can’t afford to protect the environment or expect the people who have benefited the most in this economy to pay a nickel more in taxes and still have jobs. And if it goes as unchallenged, then we’ll be able to look back in a decade or two and see more of the same results we’ve been seeing up to now: more wealth at the top and lower standards for everyone else — (standards for the environment and your standard of living, too.)

There is no mystery as to why politicians try to associate everything they do with jobs. It was the number one issue on people’s minds well before the recession began and it has only increased in magnitude as an issue since then. But just saying something is all about jobs doesn’t make it so.

So I’m thinking that it’s okay for people like Bob Jauch to ask a few pertinent questions on the front end instead of just rushing headlong into another policy initiative that enriches a few at the expense of everyone else. People need to understand the tradeoffs that will be made and the potential consequences. And maybe instead of joining CRG, the people of the Northwoods would be better off joining the Sierra Club or Jauch’s re-election campaign. Because what we really need is a level playing field that ensures public policy choices are being made in the public interest. Just tossing out the “regulations cost jobs” mantra without identifying what we’re really talking about won’t get that done.

Badger Democracy encapsulates the idea that these themes are part of a larger strategy in which the conclusions are established first and then the “evidence”  to support it is manufactured later:

“The Koch brothers have perfected “shadow spending” to influence politicians and the electorate. Their methods (practiced for decades) can be summarized in three steps. Establish and fund third-party, biased media (such as MacIver Institute in Wisconsin); establish and fund conservative “think tanks” to promote favorable research outcomes; and establish and fund legal groups to write scripts for lawmakers and file favorable briefs on behalf of right-wing interests.”

And in a totally unrelated matter, former county Republican Party officer and 55 Radio talk show host Pat Snyder welcomes Koch founded and funded Americans for Prosperity back on his show this morning to talk about how “complying with federal regulations cost American businesses $1.75 trillion in 2008. The best stimulus package for the American economy consists of reining in President Obama’s power to spend and impose regulations to control our lives, families, and businesses.” (Congressman Duffy’s former chief of staff, Matt Seaholm, runs the Wisconsin chapter of AFP.)

Hey Pat? You remember who was President in 2008, don’t you?


Attempt to recall Jauch is a fool’s mission:

UPDATE, May 11, 2012:  Jauch recall effort “suspended.”  (Translation: It failed):