10 Questions: What Makes a Pasta Worth $26? Do Health Insurers Owe You a Refund? What Is Money Anyway?

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For thoughtful, insightful answers—or at least discussions with some funny comments—about these and other pressing consumer issues, here’s a roundup of recent posts and stories. The list even includes a special bonus question: What’s the difference between a collection and junk?
What Is Money?
NPR’s Planet Money blog offers a few possible answers. One has it that money is fiction, while another theory, from a book by James Gleick called The Information: A History, a Theory, a Flood, argues that money is nothing more than information:

Even when money seemed to be material treasure, heavy in pockets and ships’ holds and bank vaults, it always was information. Coins and notes, shekels and cowries were all just short-lived technologies for tokenizing information.

Take Your Pick: In-N-Out Burger or 3.5 Glasses of Pinot Noir?

Food & Wine offers a head-to-head competition, in which different fast food selections are matched up against their caloric equivalents in vino. The idea here is to debate the merits of consuming 500 calories in one form (McDonald’s large fries) or another (4+ glasses of Cabernet Sauvignon). This would also be fun to do by subbing dollar amounts in place of calories.

Should Phone Companies Raise Rates as Much as They Want?
In Florida, according to the Sun Sentinel, bills have been proposed that would deregulate the telecommunications industry and repeal a law limiting rate hikes on land lines. Sen. David Simmons, who is sponsoring the bill, explained what consumers should do if they don’t like the price hikes or poor service:

He said consumers that face major rate hikes on their land line service have plenty of options with all the cell phone providers now available. And he said those who are concerned they’re victims of cramming, being charged for services they didn’t request, or slamming, being switched to a long distance carrier without their consent, can also shop around.

Should Insurers Give Some Money Back?
The Denver Post reports that in Colorado, insurers currently have enormous surpluses: At the end of 2010, for instance, Kaiser Permanente had $666 million in what amounts to a savings account to be used for unforeseen disasters. That’s 1,287% of the minimum amount required by state regulators. It’s also a pretty good indication that the insurer has been charging too much for premiums, or at the very least should stop the hefty annual rate increases. Some perspective from the Denver Post story:

The huge cash reserves accrued during a time when consumer groups and government watchdogs have decried steep annual increases in health-insurance premiums by both nonprofit and for-profit companies.

“We should be really clear about their obligations back to us in exchange for granting that status,” [Colorado Consumer Health Initiative executive director Dede] de Percin said. The surplus could be spent on consumers in the form of lower insurance premiums or hiring providers for underserved rural areas and Medicaid clients, she said.

What Makes a Pasta Worth $26?
A reader of a SF Chronicle restaurant blog wonders why most pasta dishes at one restaurant are $26, while similar entrees at similarly high-end restaurants are $10 cheaper. (Perhaps the more expensive pasta provides a lot more “information”?) Here’s part of the restaurant blogger’s response, which, unless the $26 menu item was absolutely the greatest pasta on the planet, will probably prove unsatisfying:

In the end, it doesn’t matter; it’s what the diner perceives to be the value of the dish, taking into account the food, ambiance and service. In many cases, the deciding factors are intangible.

Do You Really Need to Pay for Identity Theft Protection?
There’s no shortage of marketing pitches aimed at enticing bank and credit card customers to enroll in fee-based identity theft and fraud protection services. But, per Minnesota Public Radio, few consumers see the need to pay for these services. Before paying up, consider these tips from an interview with an Identity Theft Resource center executive, where there’s advice such as:

Don’t pay for a service that claims it can “prevent” identity theft. You can decrease your risk of identity theft by doing things like shredding documents with personal information and being careful about what personal information you divulge online and elsewhere. But no one can truly prevent your identity from being stolen, so anyone who claims they can do that is lying.

Would You Pay for Better Customer Service?
In theory, better service should go hand in hand with a higher-priced product. But we all know that’s not how things work all the time. Recently, as SmartMoney reports, companies such as Apple, Time Warner Cable, and Best Buy have been giving their best (read: highest-paying) customers special perks such as extended return policies and special members-only phone lines that presumably have shorter wait times and better overall service. So what does all of this mean to the rest of the schleps who bought products from these companies? What kind of service are they getting? Perhaps more importantly, is it worth it to try to get the VIP treatment by purchasing more or paying extra?

Not if you were already getting bad customer service, which isn’t necessarily going to improve with payment, says Kelly Hlavinka, a managing partner for loyalty research firm Colloquy: many companies use the same service centers for all their callers. So priority customers will have a shorter wait, but not necessarily a nicer or more knowledgeable rep.

Does It Make Sense to Work for No Pay?
Many Los Angeles-area attorneys, medical assistants, and a growing number of interns who thought they were well beyond internships are doing just that, according to the LA Times, all in the hopes of one day landing jobs that pay actual salaries. A SquawkFox post mostly argues against the idea of accepting a no-pay internship and working for free, for reasons like this:

You’ve set your hourly rate at nothing. It’s impossible to negotiate a fair wage or salary after setting your expectation for compensation at zilch. At best you’ll earn a pittance, and that’s the pits.

Would You Loan Your Car to a Stranger?

The Mint.com blog digs into the neighbor-to-neighbor car-sharing trend, in which companies such as RelayRides allow car owners to rent their vehicles when they’re not using them. This is not for everybody, but you can see why renter and owner alike might see the upside in such a business relationship:

“Economically, it makes a ton of sense for both sides,” says Shelby Clark, the chief executive officer of RelayRides, which currently operates in Boston and San Francisco. “People underestimate how much it costs to own and maintain a vehicle.”

Will You Stop Caring About the Unemployed?
Pop Economics says yep, pretty much. The longer unemployment rates stay in the 8% to 10% range, the more normal it will seem, and—for those lucky enough to actually have jobs at least—unemployment won’t seem like that big a deal:

Pretty soon, simply telling people that the unemployment rate is 9% isn’t going to make people bat an eyelash, and I wouldn’t be surprised if some politicians or jobseeker services start taking a lesson from foreign NGOs.

BONUS QUESTION: What’s the Difference Between a Collection and Junk?
Fun conversation at Reddit’s Frugal thread, with comments like:

Mine is a collection, yours is junk.


Would you be embarrassed to have friends or neighbors see your collections? If not, you’re probably fine.