The Self-Employed Depression

I didn't get the impression that her MA or debt burden was relevant since it's clear she is 38 and spent the last while working for her ex-husband. Her rent isn't inexpensive but she has a 7 year old kid. I got the impression she would take a job if offered. Maybe she's having trouble finding one. Look at the U6 unemployment rate.

I don't live in the States and can't comment on the rest. That said, I was genuinely heartened by the approach the company that still employs her is taking to trying to help out its staff. I really hope it works out for them and they emerge from the recession with a stronger business.

Remember, the goal of society is not to punish the grasshopper and feel great and virtuous because you're an ant. The goal is to help every grasshopper become an ant, even if it's not in their nature. Because when grasshoppers starve, ants lose out too.

Research shows that, among employed people, contributions to private retirement funds soar if the employer sets a default of 5% rather than shifting the burden to the employee of changing it from a baseline of 0%. People are just lazy. They don't opt in, but if you set it up for them, they don't opt out, either.

So this kind of movement among employers wrt 401ks is good for everyone.

Why not something for self-employed people?

It is hard in the US to be self-employed and resist the urge to live month-to-month, to put aside enough money for your taxes and for savings, and so on. There's nothing in the system to make it easier. The whole system is biased against self-employed and small entrepreneurs. (Don't talk to me about tax breaks, this is about institutionally supported behaviors.)

Americans have practically been trained from birth to be loose with money. There are govt incentives to go into debt -- by offering cheap money on loan to everybody who wants it, and of course easy credit has inflated the cost of goods and services. That all's what has kept the insane growth curve going, until now.

You can't live in a society that tells people "Spend for the good of your country!" and then turn your back on them in disgust when they behave just as they were taught.

Creating systems that help people be virtuous is a lot better than finger-wagging and feeling self-righteous.

Republicans (excluding the 'lefty christian' ones such as Bush [1]) tend to view the poor/needy as financially/etc irresponsible people. Redistribution is not justified, being mainly just a tax on responsibility.

The example given in this article supports the Republican view more than the Democratic view.

[1] I use 'lefty christian' to describe the ones who support both redistribution/social spending/etc, but differentiate themselves from Dems using christian nationalism.

Why isn't there a law that -requires- any employer who provides insurance to contribute the dollar amount they would put toward an employee's plan to -any- private plan the employee wishes? Currently you need a fairly generous employer to even offer you a cash 'bonus' for waiving company insurance and buying private. And even then, it's very rarely comparable to what the company would have paid on your behalf to the group plan.

And why are 401ks tied to employers? Why can't employees choose which 401k provider they wish, regardless of what 'group plan' their employer might prefer? Or an easier alternative: why aren't employers required to offer matching into a private IRA if an employee waives 401k matching?

We champion the power of markets in the US, but then we have all these communal, zero-choice, easily-corrupted corners (particularly surrounding employment) that are a huge drag on those same markets. 'Private' insurance and retirement in the US are tantamount to a 'company store'.

Allowing the self-employed to pay unemployment insurance taxes is the same sort of thing in my mind. Why -not-? If they want to pay in what any employer would and their claims to benefits are the same as any other employee, why the hell not?

Then I read the article; now I'm disgusted, with the attitudes on display here.

I hate to break it to you guys but what's happening to her could happen to you. To put it in terms of a startup she got into a booming market and was moderately successful, when the economy started tanking she invested in improvements that would help her differentiate her offering in an increasingly competitive market. Then the customers went away.

From reading the article it sounds like she works pretty hard and has to go to her customers unlike self important web developers (like me and thee) who can work from the comfort of our chairs without needing to get up if we don't want to.

And as for the iphone, from my reading of the article it sounds like that was acquired when it represented less than a days net revenue.

If you think it can't happen to you because you believe in Ayn Rand and program in Ruby; well guess what, it can; and if it comes down to holding on to your principles or feeding your kid, you will be filling out the form for food assistance and be glad it's there for you.