Monday, June 29, 2009
It helps to look at insurance in general, as well as looking at the specifics of insuring people's health.
And to understand insurance, you need to look at it outside the box. A good way to look at something outside its box is to take a look at a similar box, then compare and contrast. The ideal other box to look at, when considering insurance, is the casino, or gambling industry. This is not just my being satirical. It has to do with statistics and probability, which were originally studied and understood by considering games of chance.
Most people know, when they walk into a casino, that the casino is not really in the business of philanthropy. Casinos make money, they don't lose money. People suspend that knowledge by overriding it with another idea. They may get lucky. An individual, going to a casino and playing games of chance for any given period of time, may gain money.
But the money that individual makes is not, except in very unusual circumstances, a concern for the casino. Because other individuals, who are also there hoping to get lucky, are losing a whole lot more money than the individuals who are winning.
Casinos are set up that way. They were set up that way in ancient times before probability and statistics were developed forms of mathematics. Each game in a casino has a return ratio. Over a series of games, the individual outcomes have predictable percentages. This is most obvious in a roulette wheel, where each of the outcomes is equally lightly. Given that, for the casino to win over time the betting odds are simply set to slightly favor the casino. I won't go into the details, but you can find some at Roulette at Wikipedia.
Other games are more complicated, but work on the same principle. In poker the fact that the casino always wins is even more obvious, since a certain amount of each pot is raked off by the casino.
Insurance is remarkably similar. In its simplest form, it is a pool of money. Some people make money (they get more out than they put in); their are expenses for managing the money, and also profits taken out by the owners. As a result, most people get paid back less than they put in. You could argue that as with casinos, if people were rational no one would patronize an insurance company.
But the world is complex, and fear is a primal human emotion. There is an argument that some forms of insurance do make sense for the people who pay for them. This is because decreasing risk has a value to individuals.
Look at auto insurance, for instance. If you get into a car wreck the expenses from it could be enough to bankrupt most people. You probably won't get into a car wreck on any given day or even year, but there is a good chance you will get into one eventually. You fear bankruptcy, so you buy automobile insurance every year. It is expensive, and you are unlikely to come out ahead unless you get into a wreck (make that an expensive collision, not a fender bender) within a year or two after you first take out insurance. Yet it is worth it to many people because it protects them from being impoverished by a random event, an accident.
One can fairly ask, how much is it worth, this diminishment of risk? The auto insurance company has administrative expense and takes out a big chunk of the cash flow as profit to distribute to its investors. So all the people who buy insurance, together, will get paid back less than they pay in. Insurance companies hire actuaries to calculate their long term pay out risks, and set rates high enough to cover that plus administrative costs plus profits. Individuals are not in a position to hire actuaries. All they can do is shop for auto insurance, hoping to find the insurance company that takes the least bite out of the pie.
One other aspect of insurance should be carefully considered: insurance as investment. We see this in some forms of life insurance. The insurance company pays out more in aggregate to the people it insures than they pay in! Even so, the insurance company covers its administrative costs and pays its investors a profit. How can this be?
When an insurance company knows it can hold its incoming revenue stream for a long time (because its actuaries told it so), it can invest its balance of money in bonds, stocks, and real estate. So from an individual insured's perspective, the insurance company resembles a sort of mutual fund. Your family gets paid when you die if you have life insurance, or you get payments from a set starting point until the time of your death if you purchase an annuity policy.
In theory Social Security works like this, as do most old-fashioned (defined benefit) pensions. You pay your social security taxes during your work life. The government invests this money in interest-bearing government bonds. The average person gets more than they pay in. Those who die early are out of luck. Those who live long get far more money than they put in. Of course in reality money put in today goes out today to those who are already drawing Social Security. But it shows the idea of insurance that not only spreads risk, but creates additional income for the entire pool of insured people.
Not that anyone in Congress is going to listen to you unless you gave at least $2000 to their election campaign, but given all this, what kind of federal health insurance would you like?
Should it provide roughly equal benefits for everyone? Should it funnel almost all the money to care for those with the most expensive medical conditions? Should the money that goes in the first year be paid out it once, or should it be accumulated, with interest, for the benefit of those who are doing the paying? Should it be subsidized by taxes, or should it generate a profit to the government that pays for non-medical budget items like the military budget?
Wednesday, June 24, 2009
It is a universal given that funerals are sacred. They are not military or criminal events. Everybody, all the time, worldwide, has a fundamental human right to attend a funeral and feel safe. Even gangs with minimalist codes of ethics do not attack each other's funerals.
Attacks on funerals are crimes against humanity. In a war, they are war crimes. Funerals are usually attended by family members. That means women and children.
But there is a man in this world who does not have the ethics of a Crip, Blood, or Cosa Nostra hoodlum. There is one man whose blood is icy cold. Who kills women and children with a coldness not found even in a crazed suicide bomber who targets civilians.
Even the Hague Conventions, which promotes war by saying what you can and cannot do in a war, seems to rule out attacks on funerals. You are not supposed to use artillery against areas where civilians can be presumed to be present. Of course the Hague Convention was written before the invention of Predator drones, cruise missiles, and even air warfare. But the principle should be clear. For instance, a weapon even more indiscriminating between civilians and military personnel, such as an atomic bomb, should be prohibited from use against an urban area, just like artillery. The fact that the organizations that dropped atomic bombs on Hiroshima and Nagasaki were not prosecuted for war crimes has to do with the lack of a more powerful group of people capable of prosecuting them for war crimes, not the failure to mention yet to be invented weapons in the Geneva Convention.
I remind people of all this because today the New York Times carried a report by Pir Zubair Shaw and Salmon Masood saying that the U.S. military used a drone weapon to attack a funeral in Makeen, Pakistan, killing about sixty (60) people.
President of the United States Barack Obama is responsible for this attack. According to standard procedure, he would have to personally okay such an attack.
However much you may like his other policies, however much you may have hated George W. Bush, no honest, ethical, objective person can deny that Barack Obama has been engaging in war crimes. He has supported the Bush Administration war crime that consisted of launching an unprovoked attack on Iraq. He has enlarged the war against the people of Afghanistan. And he has made war on the people of Pakistan.
Certainly the government of Pakistan, which is heavily subsidized by U.S. tax payers, gave permission for the U.S. to attack its opposition in Pakistan. But no one is supposed to give any one permission to commit war crimes, or crimes against humanity.
If you subscribe to the principle of prohibiting war crimes and crimes against humanity, you need to apply that principle to everyone. You can't say, "I don't like that group of people, so if we use methods that would normally be considered a war crime against them, it is not a war crime." Once you say that you excuse all war crimes and crimes against humanity. Hitler, had he won (or even had a draw) in World War II, could have said, "but war crimes and crimes against humanities guidelines don't apply when you are killing Jews."
There is just no getting around the fact that Barack Obama changed nothing. He is a war criminal just like George W. Bush. You can argue about scale. He has not yet hit the scale that Lyndon Johnson, a Democrat, or Richard Nixon, a Republican hit. But he does come from the only party on earth, ever, to use atomic weapons against civilians, or even in any war setting, the Democratic Party, then led by Harry Truman.
That is not a good sign. As an analyst, I expect Obama to follow the path of Lyndon Johnson. He will spend taxpayer money on expanding the current wars, and on butter too.
By the end of his first term in office, peaceful nations with peaceful economies, notably China and India, will probably emerge as the new economic leaders of the world. Hopefully they will also become leaders in culture and peace. Perhaps they will even create a system for prosecuting war criminals impartially, without regard to which nation they are ruling.
Funerals are sacred events, for Christians, Moslems, Jews, Buddhists, even atheists. There is never justification for attacking people attending a funeral.
Thursday, June 18, 2009
Michael wanted to know if I might volunteer to work on revising the formal structure of the California party. We had not talked to each other in over a year, so the discussion of this proposition became a broad-ranging talk about the Green Party.
The Green Party is far weaker today than it was when I joined it in 2001. Largely that can be attributed to the usual problems of third parties trying to emerge in a system that legally favors only two corrupt, entrenched parties. Of course during the eight years of the George Bush administration the Democratic Party chorus both blamed the election of President Bush on the Green Party, and said that change could only come by dismantling the Green Party and adding our paltry few hundred thousand votes in national elections to the Democratic Party candidate's total.
We can't do much about the Democrats acting like two-party fascists (in many states the Green Party is, for all practical purposes illegal. They - the Democrats and Republicans - won't arrest you for saying you are in the Green Party. They just won't let your candidates on the ballot, or allow you to register voters into the Green Party).
But we should be able to do something about our own internal Green Party failings. Which are myriad. In some cases even our strengths are our weaknesses.
For instance, individual Green Party members tend to be uncompromising. Green Party leaders tend to be even more uncompromising. They are often experienced in leading non-profit environmental and social justice groups that need to scream their heads off just to be heard at all within a political system designed to placate corporate interests. The problem is, this tends to become a personality trait, if it did not begin as one. So when these experienced activists try to make a decision together within our party, they refuse to compromise over what anyone outside the party would see as extremely minor differences.
Add the usual personality disorders and a system that tries to work by consensus rather than majority rule, and you often end up with gridlock. Given enough gridlock, sensible Greens start spending their time doing something else (say working at the local level if the gridlock is at the state level, or vice-versa). The uncompromising lock horns and the sane either take sides or drift away.
It is not always bad. I have seen a lot get done. Certainly, if it has done nothing else, the Green Party has forced the Democratic Party to at least pretend to be environmentally friendly at times. This is especially true in localities where the Green Party has a significant number of members.
Green Party members have been most effective when they have actually been elected to office. Sometimes having one Green on a body filled with Dems and Republicans can force everyone to go into good governance mode. I believe if we could get 5 Green Party members elected to the California State Assembly in 2010, we could put the state's affairs in order pretty quickly.
Our agenda is good. We work for the long term benefit of all people by working for sustainable economics within a sustainable global ecosystem. We disagree about the details, and we should, because we have not had much opportunity to put our dreams into practice yet. With practice we should get feedback, a more objective view, and improvement in the details.
We need fresh people to be active in the Green Party. We need people who have not been professional politicians who are willing to run for office. We need people to work on their campaigns. And we need people to work in the party organization at all levels, local, state, national, and global.
Oh, and did I mention, Peace? With President Obama escalating the war in Afghanistan just like John F. Kennedy escalated the war in Vietnam, now more than even we need a party that really truly understands that the U.S. military is the disease, not the cure.
Friday, June 12, 2009
In an astonishing display of hypocrisy, even for the political arena, administration officials are pretending that not changing the mountaintop removal policy is a change in policy.
Read the EPA News Release on Mountaintop Removal for a 1984ish double dip into double-speak.
The Obama administration is not going to stop the coal corporations from destroying mountains. It is going to "strengthen oversight and regulation." In other words, the paperwork must be done right before you can destroy the environment to dig out the coal that adds to much to global warming. So far the Obama administration has approved 46 permits. Think of it: 46 entire mountains blasted to rubble to get the coal underneath. How is that for a little more than 100 days in office?
“The steps we are taking today are a firm departure from the previous Administration's approach to mountaintop coal mining, which failed to protect our communities, water, and wildlife in Appalachia,” said Interior Secretary Ken Salazar. “By toughening enforcement standards, by looking for common-sense improvements to our rules and regulations, and by coordinating our efforts with other agencies, we will immediately make progress toward reducing the environmental impacts of mountaintop coal mining.”
The Obama camp thus distinguished themselves from those evil Bush Republican approvers of blasting off mountaintops.
Can we blast ancient mountains to smithereens while protecting "our communities, water, and wildlife in Appalachia?”
YES WE CAN!
See also: EarthJustice on Mountaintop Coal Mining decision "What the administration is proposing today is essentially rearranging the bureaucratic deck chairs on the disastrous ship that is mountaintop removal."
Monday, June 8, 2009
Me, of course. I don't see why low income citizens need air conditioning at all. Put me in charge, and I would ban air conditioning except for special circumstances, such as hospitals and nursing homes.
I don't advocate that simply because the amount of electricity used in the United States would plummet the first summer after such a law is enacted. Although that should be a good enough reason for an environmentalist.
I think air-conditioning has deconditioned the human species in the United States more than heat and humidity ever did.
I speak from experience. From the ages of 6 to 9, I lived in a house in Jacksonville, Florida that was not air-conditioned. We did have fans, but mainly we just adjusted to the heat. The schools I went to in Jacksonville never had air conditioning. Somehow we survived. We even played in the heat in the summertime. Sure, we liked to go swimming in cool waters too. But you can't play baseball in a swimming pool.
My family moved into a house with central heating and air conditioning when I was 9. My mother controlled the thermostat, setting it to 68 degrees Fahrenheit in the summer and 72 degrees in the winter. Man oh man, had we arrived in the middle class. It threatened to ruin the outdoors for me. If the inside of a house is 95 degrees and outside it is 95 degrees, you might as well be outside. At the age of 8 I had been well-acclimated to the heat. At the age of 12 I was acclimated to the "perfect" indoor climate. I still went outside in summer, but I often had a bad attitude about the heat.
A lot of people did not just play outdoors in the heat. They worked outdoors in the heat. A man who would not work in the heat, if that was the work that was available, was considered a lazy man.
So, when did air conditioning become a human right? Not just a luxury for the rich, but such a necessity that taxpayers are required to pay for it for poor people? Even though it is a major creator of greenhouse gasses?
Some early cultures had primitive versions of air conditioning, but the modern versions were based on cooling engines of various types first created in the 1800's. Willis Haviland Carrier is credited with the first practical air-conditioner, invented in 1902. The invention of Freon in 1928 made air-conditioning more practical, but mostly until the 1950's air conditioning was a luxury item. In the 1960's air conditioning became a standard feature of middle class homes in the southern sweep of the United States. Air-conditioned automobiles did not become common until the 1970s. But some time between then and now air conditioning came to be considered a necessity, not a luxury or just something nice.
Which means, we can do bloody well without them. Let us stop denying nature. Let us feel nature's summer heat. Let us feel that Autumn is a relief and that even Winter has its merit.
Thursday, June 4, 2009
Today's speech on Islam at Cairo University in Egypt is a great example. It flatters Islamic culture. At the same time it reminds those few Americans who have a slight grasp of history that after the fall of Rome it was Islam, not Christianity, that maintained and developed civilization for almost a millennium.
But there are iron knuckles under the glove. "We will, however, relentlessly confront violent extremists who pose a grave threat to our security. Because we reject the same thing that people of all faiths reject: the killing of innocent men, women, and children." Unless it helps us. We are the nation of Wounded Knee, the Republican Party's genocidal campaign in the Philippines, of Hiroshima, Nagasaki, and napalm-soaked Vietnam. We destroyed civilization in Iraq even though its leaders, including Saddam Hussein, were enemies of al Qaeda.
President Obama wants us to remember some nice history, and forget the blood on American hands. At a time when our nation's economy is in trouble, he is wasting more money on the U.S. military than any previous President of the United States.
That part about Thomas Jefferson owning a Koran is cute. I bought a Koran (in English) and read it in college as part of trying to understand the world (I was also interested in Sufism, Zen and the like for a while). Note Barack does not say he has a Koran in his library - that would not go over well with American voters. Has he ever read the Koran? He did not say.
"America is not the crude stereotype of a self-interested empire." That is a three-pointer. We are a complex empire, filled with do-gooders who are frustrated by the Pentagon's bewitching every President we elect.
"And despite the costs involved, America's commitment will not weaken." There, you see, is the policy statement. We like you, we really do. But our policy is to kill you if you disobey us, no matter how much it costs American tax payers who voted for the Democrats hoping they would bring the troops home.
If Islam is not bad, if it is violence that is bad, why is only American violence good? And included here is violence by our allies and puppets. Tell me oh great Obama, why is it okay for you to be the most violent leader on earth? "The Holy Koran teaches that whoever kills an innocent, it is as if he has killed all mankind." Thank the Lord Jesus Christ he has an exception for innocents killed by aerial bombardment.
"And that is why we are providing more than $2.8 billion to help Afghans develop their economy and deliver services that people depend upon." Heck, didn't we give even more than that to the CEO's of a few U.S. banks known for causing the global economy to implode? Think of it as the Widow's Mite.
As to Palestine, occupied and unoccupied, "Resistance through violence and killing is wrong and does not succeed." It succeeded for the Israelis, and it worked like magic for them while Barack was patiently waiting to become President. But it is wrong for the Palestinians. They don't give anywhere near enough in donations to the Democratic Party to make it right. "It is time for these settlements to stop." Wow, what a verbal tongue-lashing of Israel for the Cairo University audience.
As to Iran, "we are willing to move forward without preconditions on the basis of mutual respect. But it is clear to all concerned that when it comes to nuclear weapons, we have reached a decisive point." In other words, we will talk nicer, but our policy is the same as the Bush administrations. Only our allies like India, Pakistan, and Israel can have atomic bombs. If Iran wants atomic bombs, it must first become an American ally.
At the end of the speech there is a flurry of talk about Peace, with quotes from the Koran, New Testament, and Torah. Nothing like a little gift-wrapping of the same old American policy package for the Moslem world.
For years I have heard Barack Obama cast a magic spell with his speeches to the American people. And yes, there have been some minor policy changes since Barack has taken office, and it is early in his administration. Maybe, having cast a spell over the people of the world, he will start working to make it a better place.
But the world does not work by magic. You cannot resurrect the civilians killed by orders from Barack Obama in Afghanistan with a speech.
Still, I liked the part of the speech reminding us of Islam's contributions to civilization.