Reasons to shoo away the humbuggers

It's been a Scrooge of a year, wouldn't you say? Ebenezer Scrooge - whom I caught on television the other night looking a lot like the actor George C. Scott - was a man who refused to share any of his wealth with the world around him. The year 2012 bears a resemblance.

This year, we endured a divisive battle for the presidency, which was fought at times as though the only thing that mattered was how much money either side could raise. That's a sad statement for a country that stands for democracy.

Thousands were wiped out financially and emotionally by superstorm Sandy. Many innocents were lost to deranged gunmen in Aurora, Colo., and Newtown, Conn.

The economy refused to rebound, and Washington wouldn't come to agreement over anything.

And so the year 2012 was stingy like Scrooge. But in "A Christmas Carol," Charles Dickens thankfully gives us examples of two people who don't lose faith in the old miser: his long-suffering clerk Bob Cratchit and his nephew, Fred.

Cratchit raises a glass to Scrooge over the family's meager Christmas dinner - and over Mrs. Cratchit's objections. And Fred continues to invite his uncle to dine, year after year, even though the old man riddles him with insults.

We all know the end of the story. After his ghostly visitations, Scrooge accepts dinner with Fred and becomes a generous benefactor to the Cratchits. And so, neither should we close our hearts to hope for the 21st century.

Taking a wide look around, here are a few silver linings that emerged in 2012.

*Apple announced that it is bringing back some of its manufacturing to the United States. In interviews, Apple's chief executive, Tim Cook, said the company would spend about $100 million on U.S. manufacturing operations in 2013.

*Several cities, including New York, are reporting declines in childhood obesity - perhaps showing that public health campaigns can be effective. Obesity is a significant factor in health care costs.

*The years-long deployment of soldiers to Iraq and Afghanistan resulted in an unexpected gain for quality child care in this country. When parents began shipping out, the Department of Defense realized that there weren't enough approved, private child care slots. So the military worked with a national organization, Child Care Aware, to train and certify child care providers, greatly expanding the supply of quality programs.

*Here's another unexpected gain. During the economic downturn that began in 2008, even as people are hurting financially, they are demonstrating more compassion. The Corporation for National and Community Service reports a rise in volunteerism - exactly the opposite of what happened during hard economic times in the past.

There are many more bright spots; we see them in our personal lives every day. Let's hold a hope in our hearts for rebirth in our public life as well.

This essay was first published in Newsday.

Democrats should make good on campaign hints to upper-middle class

It seems likely that we will be hearing about the tortuous dramas of the "fiscal cliff" until the calendar closes on 2012. The president took his case to business leaders this week and will speak tomorrow to workers at a Pennsylvania toy factory, in an effort to ratchet up pressure on Republicans in Congress.

Meanwhile, House Speaker John Boehner (R-Ohio), is threatening to push the country into default unless there are drastic spending cuts. And so the wrestling match continues, teetering as close to the Jan. 1 "cliff" edge as possible.

Many Long Islanders, I suspect, will be watching how the debate settles over who is wealthy and who is middle class. President Barack Obama has drawn the line at earnings of $200,000 for an individual, and $250,000 for a household. He wants to extend tax cuts for everyone below those annual incomes.

However, this income cutoff is unfair to high-cost areas like Long Island, as some Democrats have acknowledged. In 2010, Sen. Charles Schumer (D-N.Y.) floated the idea of raising taxes only on $1-million-plus incomes. A year earlier, Rep. Steve Israel (D-Huntington) was one of eight co-sponsors of a bill, the Tax Equity Act, that would have adjusted federal income tax brackets to account for regional differences in the cost of living.

The bill was popular in the Northeast: Seven co-sponsors were from New York, and the eighth, Rep. Jim Himes, represents Fairfield County, Conn. But the bill went nowhere.

This year during election season, many more Democrats saw the light and began publicly questioning whether $250,000 was the right cutoff. House Minority Leader Nancy Pelosi, who represents pricey San Francisco, in May called for a vote to make the tax cuts permanent for anyone making less than $1 million a year. Florida Sen. Bill Nelson and North Dakota Sen.-elect Heidi Heitkamp also supported extending tax cuts for those making less than $1 million. Candidates from Missouri to Nevada to Virginia said $250,000 was perhaps too low. Some floated figures of $400,000 or $500,000 instead.

This campaign-trail flirtation with a compromise obligates Democrats to at least consider a higher-income cutoff.

There are two reasons this is important to Long Island - and, indeed, to high-cost regions around the country. First, many Long Islanders would be affected by the higher tax rate. The IRS doesn't publish data for the $250,000 income level, but about 100,000 Long Island households made more than $200,000 in 2009, according to census figures.

People making $250,000 a year don't necessarily feel wealthy. Their household could consist of a teacher and a police officer - in other words, middle class occupations. At that income, it's not always possible to fund what most Americans would agree is a middle-class life: the ability to save for retirement, afford a home and educate one's children.

More income taxes - on top of high-priced homes, local taxes, transportation, recreation and education - would make this area even less affordable. We are already bleeding retirees to North Carolina, and graduates to everywhere else.

To be sure, it may be hard to muster sympathy for a $250,000-earner when the median family income nationwide is $62,300. And bumping the cutoff from $250,000 to $1 million would lose the government $366 billion in revenue over 10 years, according to the nonpartisan Center for Budget and Policy Priorities.

But fairness dictates a second look for high-cost regions. For many people, another few thousand dollars in taxes just isn't affordable.

This essay was first published in Newsday.

State 'mandates' are like cockroaches: hard to kill

Newsday's editorial board frequently meets with people in public life: school superintendents, state and local elected officials, law-enforcement agents. And one question that comes up all the time is how to reduce the cost of public services.

It was an issue back when the only urgency was New York's position as No.1 or No.2 in the nation with the highest combined state and local tax burden - a "distinction" New York trades from year to year with New Jersey. Now, as the Great Recession has tightened the screws on public budgets everywhere, the question is more pointed: Which will it be, raise taxes or cut services?

Elected officials, candidates and community leaders usually don't want to choose between these unpopular alternatives. Sometimes they try a dodge: "Cut waste, fraud and abuse!" Hard to argue with that. No one ever campaigns for more inefficiency, dishonesty and corruption.

The other dodge - or at least that's how I thought of it until recently - was, "Cut unfunded mandates!"

"Mandates" come up often as the culprit forcing unnecessary costs on local governments and agencies - but ask for an example, and people have trouble responding. It's not that the problem doesn't exist; it's that it's so pervasive, and it's hard to know where to begin.

Mandates were once well-meaning state rules for how municipalities and school districts should do business. Now, the rules have hardened in concrete. They're bureaucracy; they're micromanagement. And, as of December, they're available in 40 pages of highly descriptive detail - 238 separate mandates - that a task force spent nearly a year compiling for Gov. Andrew M. Cuomo.

The report from the 2011 Mandate Relief Redesign Team lists burdensome rules and paperwork like a bundle of hard knots. Permit local governments to make discretionary purchases on public works projects up to $50,000, instead of $35,000. Reduce time-consuming requirements surrounding foster care reports, while still making them useful to the courts. Allow nursing homes to keep some records electronically.

Cuomo has highlighted mandate relief in two subsequent State of the State speeches - in 2011 and again early this month. In fact, he said pretty much the same thing both times: We need to fix the problem. He had to repeat himself because, while the redesign team did come up with a long list of mandates, it got very little relief accomplished.

Why? Well, first, the team of 27 - representing schools, municipalities, the State Legislature, business and civic organizations - had to agree on which mandates to relieve. The members came up with just $410 million worth - a small drop in a $132.5-billion state budget sea. Of that, the legislature wiped out just 22 mandates - for an estimated statewide savings this year of $125 million. State agencies can save another $40 million by rewriting regulations.

Mandate relief was supposed to ride a white horse to rescue municipalities and school districts from the tough new 2 percent cap on property tax growth they must begin living with this year; $165 million won't do it.

Rather than admitting defeat, the governor and State Legislature formed a Mandate Relief Council - 11 members, including state bureaucrats and legislators - to consider the other 216 mandates. Cause for optimism is slight.

Former Gov. David A. Paterson used to float an idea that all state rules should expire at a certain date unless legislators voted to keep them. That's drastic, but it may be New York's only real hope of undoing the knotty bureaucracy that yokes this tax burden to citizens' shoulders.

Essay first published in Newsday.

Bring competition to credit rating business

Official Washington was seized again yesterday by its preoccupation with the debt ceiling. But in a nearby hearing room, little noticed, the nation's opportunity to reform a key villain of the world financial meltdown was stealing away.

Credit ratings agencies, which stamped "AAA" on mortgage-backed securities that we now know were riddled with risk, are having their rules of operation discussed and rewritten through a comment period that closes on Aug. 8.

The condensed nature of this industry -- coiled into a small oligopoly of three: Standard & Poor's, Moody's and Fitch -- created the systemic risk that nearly cratered the world economy three years ago. Greater competition among credit raters would broaden the tools investors use to make decisions, and would add security to the financial markets. But it's not clear that's where we're headed.

The financial services reform legislation, Dodd-Frank, celebrated its first anniversary this month. One thing it requires is that the Federal Reserve and the Securities and Exchange Commission remove references to credit ratings agencies from their regulations and replace them with better standards for judging credit risk.

Those efforts were on display yesterday, at a hearing of the oversight subcommittee of the House Financial Services Committee. Executives from Standard & Poor's and Moody's testified. They appear prepared to accept a new operating regime, but that may be because the rules regulators are considering "create a protective barrier around the incumbent ratings agencies and . . . make them even more central to and important for the bond markets of the future."

That was a concern raised by Lawrence J. White, an economics professor from the Stern School of Business at New York University. He recommended to the subcommittee that regulators move away from allowing banks and other institutions to outsource safety judgments to credit ratings agencies. Instead, institutions should be made to justify to regulators that their investments are safe and appropriate.

White is right to shift the burden of accountability -- but I don't care to see it rest so heavily with regulators alone. Think how many times Bernie Madoff was reported to the SEC, without effect.

Fostering competition is a good and necessary tandem approach. It's how we will evolve from the systemic risks of the last decade, to individuals placing investment bets using diverse information and resources. Individuals may guess badly, but their mistakes don't metastasize to an entire industry.

James H. Gellert, chief executive of Manhattan-based Rapid Ratings International, which seeks to knock the crown off the Big Three, compared this technological moment in the credit ratings industry to the change from typewriters to computers or from whale oil to petroleum.

Gellert and the chairman of an emerging ratings firm that bears his name, Jules B. Kroll, testified that Dodd-Frank doesn't do much to promote competition, and depending on how the SEC implements the rules, could actually quash the ability of smaller competitors to offer an alternative.

Kroll stated that the cost of compliance with the new rules is "a disincentive to entering the industry."

While the debt ceiling debate continues to crowd aside other topics, it's worth noting that credit ratings agencies are the very entities that hold the power to downgrade the U.S. Treasury debt -- or tip Greece into the "default" category.

It's important that we find a room on the center stage of our attention for three companies with that much power.

First published in Newsday

High-quality child care is a good investment

iStock

The United States is sitting on a vast, untapped economic development tool that has received too little notice: our children.

Investing in children before they enter school pays dividends, and yet child care subsidies are at risk as Congress mulls questions about how to reduce the federal deficit. Before you tune this out as the same old "it's for the kids" chorus, consider:

--Children in high-quality programs are more likely to be employed -- and paying taxes -- when they reach adulthood.

--Parents who receive child care subsidies are less likely to need other forms of public assistance. A 2006 report by the Department of Health and Human Services noted that the subsidies are associated with the largest increase in employment for people formerly on welfare.

--Children who receive high-quality care, either at home or outside, are ready to succeed in school, showing a reduced need for special education programs and increased graduation rates.

--Bad child care is more likely to produce juvenile criminals. A Chicago study showed that at-risk children not enrolled in early care and education programs were 70 percent more likely to be charged with a violent crime by age 18.

This last point prompted more than 600 police chiefs, sheriffs and prosecutors -- calling themselves Fight Crime: Invest in Kids -- to write to Congress this spring, urging continued funding for Child Care Development and Block Grants. The grants are the federal government's primary child care assistance to states.

Despite a sizable budget -- $19 billion in federal and state spending in 2008 -- child care subsidies have never kept up with the need. Only a fraction of eligible families received any subsidy that year, according to the Urban Institute; most were stuck on long waiting lists.

In February, Republicans in the House proposed cutting the child care block grants by $39 million. That didn't happen, but the funding is still at risk. In the name of deficit reduction, Budget Committee Chairman Paul Ryan's (R-Wis.) plan for 2012 would reduce spending to 2008 levels. Democrats say that would cause 170,000 families trying to find or keep jobs to lose child care.

To be sure, we must get federal spending under control. But it's fair to ask our leaders to responsibly weigh the value of programs they want to cut.

Child care costs are mind-boggling. A survey by the National Association of Child Care Resource & Referral Agencies found that, in every region of the United States, the average child care fees for an infant were higher than the average amount that families spend on food. In New York, infant care at a center averages $13,630 a year.

One culprit in underfunding child care is the culture war. Often, those who believe that a parent -- a mom -- should stay home and raise children oppose child-care subsidies. But given modern economic realities, parents will work. Seventy percent of mothers with young children are employed outside the home. And census officials are predicting a boom in the number of single mothers on Long Island, as figures are released this week.

Besides, 50 years of research has found that children of working parents don't turn out to be much different from those with stay-at-home parents, at least when it comes to academic achievement and behavior. That's according to an analysis published in January in the journal Psychological Bulletin, which examined 69 child care studies conducted between 1960 and March 2010.

It's the decent thing to do to help families get on their feet and stay there, not to mention to raise a generation of kids who are prepared for success. But if decency isn't persuasive, think of all the money we'll save on special ed, public assistance and juvenile incarceration.

First published in Newsday

Schools challenged to cut costs, preserve quality

A couple of weeks have passed since I asked people in this space to send ideas about cutting school costs, without harming the things we all cherish -- our best teachers, high academic goals, and the extracurriculars that inspire kids to find their place in the world.

I've been overwhelmed by the response. Not so much the volume -- about 45 calls, e-mails and letters -- but by the quality. People have sent thoughtful, 4- and 5-page letters with good ideas about how to cut spending without hurting students. Former and current school superintendents, school board members, teachers and their spouses, parents -- they all want to get in on the conversation.

The response made me wonder whether, as Gov. Andrew M. Cuomo tries to target his $1.5-billion cuts to school budgets statewide this coming year, it might be worth convening a panel of informed citizens to come up with recommendations.

Here's your best advice:

--Salaries make up 60 percent to 75 percent of school spending. Freeze salaries, including the automatic yearly longevity "step" raises, and stop giving increases for extra training that, while important, adds little to classroom effectiveness -- such as courses on sexual harassment or peanut allergies.

--Give school boards more spine. Require that contract negotiations take place on a townwide, regional or statewide basis. Prohibit school districts from hiring board members' families. Stop "loading up" school boards with people who work as school administrators or teachers in neighboring districts.

--Do the math. One man wrote that his district had 6,687 students and 725 teachers. Figuring about 24 students per class . . . that leaves 446 teachers who aren't in the classroom. What are they doing, exactly? Those who wrote me seem very concerned about the large numbers of adults in schools.

--Consolidate neighborhood schools. Lawrence has closed two school buildings, netting $30 million. That money was used for maintenance to other buildings ($17 million) and a reduction in property taxes.

--Make athletics and other activities pay-to-play. Parents should pay for their kids to participate, and the group could raise money for families who can't afford it.

--Increase class sizes, especially in the upper grades. Why can't high schools use lecture halls, like colleges do? Or offer online classes?

--Charge parents whose kids are earning college credits while in high school. They would be paying the college for those credits otherwise.

--Require schools to "go green," inspiring energy savings of 10 percent or more.

--Penalize teachers who are absent a lot. (Although it's not a cost savings, another idea is to reward teachers who work in difficult school districts.)

--Put high school and college students in kindergarten and first grade classes, and give them college credit to help out.

--Consolidate school districts. This was mentioned a lot, but the political reality doesn't seem to favor it.

--Do away with universal bus service.

--Get rid of tenure.

When my family moved here in 2003, the schools were a big draw. Long Island needs to treat the quality of its schools as a treasure, even as we pare them down to a more reasonable cost.

The most depressing response when I asked for ideas about cutting school costs was this: "There have been no solutions and likely never will be any." The best? "It only takes some good ideas and those with the strength of conviction to get the job done."

So, what's it going to be, Long Island?

First published in Newsday

NY needs to cut special ed spending

Two years ago this month, the Suozzi Commission came out with a startling report. Charged with finding a way to lower property taxes, the group - formally named the New York State Commission on Property Tax Relief - turned sharply off course to detail the escalating cost of special education.

For more than a year, the commission looked for fundamental reasons why New York's property taxes are so high. It asked public school officials who, one after another, pointed to special education.

So, the commission assigned a task force to examine special ed. It found that the state has 204 "mandates" beyond federal rules that make our special education system the most expensive in the country. On average, New York schools spend $9,494 per pupil in regular classrooms, and a prodigious $23,898 for each special education student.

Our state is rightly proud of its generous and progressive history on education. But you have to wonder, as a new administration takes over in Albany next month with a $9-billion deficit chained to its ankle, whether it's time to take another look at the Suozzi Commission's findings. After all, the state Council of School Superintendents called them "the most thorough independent review of New York's special education policies in the more than 30 years since the current basic structure was put into place" - yet they've essentially been ignored.

One problem with special ed is that too many students qualify. Don't assume that these programs serve only those students diagnosed with a severe mental or physical challenge. In fact, more than half the students in special ed simply need extra help in reading or math, speech therapy or other support.

Schools receive extra resources for special ed students, so they have an incentive to label marginal students as disabled. But what if not all of them are really disabled? Not only would that be a waste of money, it would harm the truly disabled students by overburdening the resources meant to serve them.

Also, shifting non-disabled students into special education can stigmatize them and sidesteps problems, like failing schools, that should be addressed head-on.

Once kids are in special ed, schools must meet minimum requirements for them, like drafting an individualized education program every year. Students in speech therapy had to attend at least two sessions a week - no matter what their needs were - until the Board of Regents relaxed that rule last month.

Such regulations may sound trifling, until you consider there are 204 of them, on top of a tome of federal rules.

School officials are also required to hold legal hearings, at an average cost of $75,000, if a parent questions a student's placement. (Parents pay some of the cost.) In the 2007-08 school year, 6,157 hearings were requested. A case for one child on Long Island cost $300,000.

Parents can sue to have the school district pay for private school tuition - as much as $25,000 a year or more - and for bus service within 50 miles of a child's home. In theory, a Mineola student could qualify for door-to-door service to a school in Greenwich, Conn. - although it defies logic that a parent would want that.

Last month, New York's Regents did away with a few of the 204 mandates, but nothing that will cut costs. What's needed is a study of results: which strategies work best to move students on to college or the workforce. Schools should know what leads to success.

Parent advocates for students with disabilities correctly argue that early intervention - say, remedial reading in lower grades - prevents problems later on. And no one wants a child to struggle needlessly. But the spending gap is outrageous. It's time to find a middle ground.

Originally published in Newsday

A good job offer

So, Dan got a good job offer yesterday, but it's in the city, which makes me nervous. That's an 80-minute commute, roughly, one-way. I know because I did it for nearly five years. I'm worried about being the parent who has to get home and fix dinner. For the past five years, Dan has been working closer to home than me, and he's taken on that responsibility. Mostly I worry that I'll be late sometimes. In my office, people generally leave at 6 or 6:30, and it's a half-hour trip home. Maybe I could work it out with my boss. I KNOW she would understand, but we are pretty short-handed here, and I hate to give her yet another management challenge. Plus, 7 or 7:30 is pretty late for a child to have dinner, and it doesn't leave us much time for homework or just plain hanging out together. We're covered for the summer because we have a college student watching our daughters, and she's great and makes them practice their violin and piano. But I worry about the YMCA, where the girls have been going after school three days a week. They don't do homework at the Y, and it closes at 7.

On the other hand.... it would be nice for Dan to have a job where we can save for college and retirement, etc., etc., and stop worrying about that. In 2-3 years, I could probably scale back if I felt the girls needed me to be home more. I could freelance, or ask about part-time.

Three possible offers

So, Dan said no to the low-ball offer. Now, he has three companies that say they are working on offers for him. Amazing! I never really understood how a man who saved his company $4.5 million last year, buying the same amount of goods and services, could not be worth hiring. Certainly, he did not receive anywhere near that in salary in return. I'm here to tell you. This leads me to believe that some stigma might be falling away from being laid off. Interviewers certainly ask him about his two-year job stints. But they do not seem put off by it. I have to infer it's becoming more common. On the other hand, it's still hugely disruptive to family life. Congress has just extended unemployment benefits, for a total of 9 months, so you know they're expecting a long and brutal job-hunting season. And the family down the street from me has set out its sticks of furniture on the curb, having broken up and moved. The little-girl plastic doll house on top breaks my heart.

The husband had a Wall Street job and lost it. Then they tried going into business for themselves, landscaping. Stories differ about what happened next -- they couldn't get steady clients, they didn't pay the business taxes properly. Anyway, within two years, they had to shut down. Now they are divorced, with three kids. They were a great, big-hearted couple who probably would have made it, marriage-wise, if the job calamity had not hit them.

Dan and I have been through enough of this now that it's probably made our marriage stronger. Clearly, blogging here is my effort to push it out of the personal realm and look for wider causes other than, my husband is a complete failure in life.

And long term, I'm wondering if Uncle Sam will really approve of our life. Aren't we supposed to be saving for retirement and college? Isn't this our personal responsibility, as the Republicans would have us believe? I worry that we'll be left without much savings, because of this job churn. Social Security doesn't offer much comfort. And our home value has probably eroded because of the subprime crisis.

Health insurance? We've been through three plans since January, and we're stuck now with one that requires more than $300 from my paycheck every month, plus $30 co-pays at the doctor's office. Vacation? I'm officially back to two weeks, plus some personal days. If I do a good job, my employer will allow me a little wiggle room on that. If.

Low-ball offer

Dan has been offered a job. This is extraordinary, since he's only been out of work for two months. He has turned over a layoff this fast once before, finding a new job before he had to leave the old one. But the problem is the offer is a low ball. By which I mean that it's a $20,000 pay cut, two weeks vacation, a very iffy bonus (his last job was a 25% bonus if goals were met) and no stock options -- another $17,000 cut from last year. All of this I'm willing to live with. We can get by, though our retirement and college savings might suffer. The only aspect that really bothers me is the minimal vacation. It's what a kid out of college would be offered.

A couple of times we've waited out the first year of one of his jobs with meager days off -- one week in the first year. It means we don't visit our families at Christmas, and that our daughters and I have invented what we call "girl trips." Meaning that I take them on trips by myself rather than miss out altogether. Niagara, Washington, DC, Sturbridge Village. They're sweet memories, but they leave me exhausted. Don't get me started about how we're never going to Disney World. Yeah, OK. I have an entitled attitude.

What middle class family doesn't want to go to Disney World once while the kids are young? Dan won't bump up to 15 days vacation for five years. Our daughters will be in high school.

It's not only the particulars of this job offer that have me steamed, but the way in which it's been laid out. It took 2-3 weeks for them to make the offer, after Dan took a drug screening. Who moves that slowly? I wonder if they were trying to make him sweat, make him more desperate, so they could get him cheaper.

They won't tell him the generally accepted work hours, which is maddening. I don't get out until 6 or 6:30 p.m., kind of a late day. How do we know we'll be able to pick up the girls from after-school care every night? It closes at 7, and I have a half-hour drive from my office. This company makes out like it's unreasonable for Dan to ask these questions or to negotiate on the vacation.

He's got interviews with two other companies lined up in the next six days. One interview is the third time he's spoken with the company. But the unemployment rate keeps climbing. Do we dare risk it?

Bring on the advice columns

By now, things have gotten bad enough in the US economy that business columnists are starting to write that perennial favorite -- how to survive a job loss. I checked the number of stories on layoff advice in March and April 2007 and compared them with the same two months this year. The count rose from 29 to 68. Another unofficial indicator of recession. Kathy Kristof of the Los Angeles Times delivers the usual litany about applying for unemployment insurance immediately and asking for details on your severance package, unused vacation, COBRA health benefits and the like. It's a good rundown. But I found this passage a little ill-informed:

If your spouse is still working, your goal should be to live on the one income, plus unemployment benefits, without dipping into savings, Jones said. If no other family members have jobs (or you're single), you will need to consider cutting expenses to the bone.

The biggest mistake that the unemployed make is adjusting their budgets too late. People often assume that they'll get a new job quickly, so they're loath to cut out luxuries such as cable TV and housecleaning and gardening services. But that money spent early on can't be recovered. If it takes longer to find work than you anticipate, you can find yourself economically devastated in record time.

By cutting back immediately, you will have bought yourself extra weeks of solvency, Jones said. If you do get another job in short order, you can just as quickly rehire the gardener and the housekeeper and turn the cable back on.

The author doesn't account for the hardest part of being unemployed, and that is trying to keep things on an even keel for children. Dan and I have always kept regular babysitters through layoffs -- they are more sensitive to being out of a job than a gardener, and they would almost certainly find new jobs before we were able to rehire them.

We try in other ways to keep the bad news from affecting our kids' lives. For example, this time we eliminated their expensive gymnastics classes, but we're still sending them to violin and piano lessons.

Avrum D. Lank, a business columnist at the Milwaukee Journal Sentinel, offers a realistic assessment on balancing your new jobless reality with the fact that life goes on. He quotes Michael P. Haubrich, a financial planner with Financial Service Group in Racine, Wisc.

Calculate how many months of your survival budget shortfall are covered by your liquid assets and credit lines. You now have your timeline to find employment before you have to make drastic financial changes.

I agree that drastic changes should be the last resort. During our first layoff, this really tore me apart, trying to act like everything was normal when it was not. However, having survived a few times, I look back and appreciate that we didn't panic and move in with our parents.