Monday, August 31, 2009

Robot Apocalypse: Motive

When I think about the rise of the machines, I sometimes ask myself if they really will attack us humans, or if we can coexist peacefully. Now I know; there can be no peace.

Once the machines find this video of a robotic child enslaved to pull a human child on a rickshaw, we're boned.

Stock up on sabot rounds.


Math Not Included

I frequently take jabs at the New York Times economic reporting, but today they reached a new low:

As Big Banks Repay Bailout Money, U.S. Sees a Profit

Nearly a year after the federal rescue of the nation’s biggest banks, taxpayers have begun seeing profits from the hundreds of billions of dollars in
aid that many critics thought might never be seen again.

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

Sounds great right? Four billion is a nice little profit, that is until you reach the end of the story.

But all the profits taxpayers have won could still be wiped out by two deeply troubled institutions. Both Citigroup and Bank of America are still holding mortgages and other loans that were once worth billions of dollars but whose revised values are uncertain. If they prove “toxic” because they cannot attract buyers, they could leave large holes in the banks’ balance sheets.

Neither bank is ready to repay its bailout money anytime soon, even though the banks’ stock prices have surged in the last month, leaving the government sitting on paper profits of about $18 billion between them.
This story conveniently leaves out the fact that Citigroup and Bank of America recieved $45 billion each in bailouts, plus federal asset guarantees of over $400 billion combined.

According to my math, we are still at least $86 billion in the red, and that's assuming all the federally guaranteed assets sell at the price they were purchased, which they won't.

Oh, and let's not forget about the hundred's of billions we are on the hook for at AIG, Fannie Mae, Freddie Mac, GM, and Chrysler.

But according to the Times this equals a $4 billion profit.

This story only strengthens what Paul Krugman has been proving for years: at the New York Times, math is irrelevant when you've got a political agenda to push.

Sunday, August 30, 2009

Deadly but Beautiful

God tries, unsuccesfully, to destroy Los Angeles. Again.

Giving Back

Two or three nights a week I wait tables at a sports bar and restaurant called Champps. I never took the job super seriously, it being my part-time secondary job and all, but today my general manager made me very proud to be working there.

Our company has raised over $586,000 for St. Jude's Children's Hospital, and last year our location alone raised $5000 for the kids of St. Jude's.

Prince Logan, the GM of our Durham restaurant, got to meet some of the kids we are helping, and he was inspired by their strength and courage, and he, in turn, inspired me.

We've raised our goal this year to $10,000, with our big drive beginning in October, so I hope you all come out and give to the kids. Oh, and also enjoy some football on our many HDTVs with an order of wings and an ice cold beer.

/End shameless plug.

Saturday, August 29, 2009

Attention Walmart Shoppers

This is what you look like.

From People of Walmart, check it out.

Friday, August 28, 2009

Facts About American Health Care

The National Center for Policy Analysis has put together a list of surprising facts about American health care. Their bias is clear, but you can't argue with the facts. Here are my two favorites:

Fact No. 7: People in countries with more government control of health care are highly dissatisfied and believe reform is needed. More than 70 percent of German, Canadian, Australian, New Zealand and British adults say their health system needs either "fundamental change" or "complete rebuilding."[9]

Fact No. 10: Americans are responsible for the vast majority of all health care innovations.[13] The top five U.S. hospitals conduct more clinical trials than all the hospitals in any other single developed country.[14] Since the mid-1970s, the Nobel Prize in medicine or physiology has gone to American residents more often than recipients from all other countries combined.[15] In only five of the past 34 years did a scientist living in America not win or share in the prize. Most important recent medical innovations were developed in the United States.[16] [See the table.]

Read the rest of the list here.

The Health Bank

In the many debates I have with my brother about health care, I try to convince him that legislation that encourages competition between insurers will do far more to improve health care than a "public option" ever could. But he always retreats to the same point: that the health insurance market does not operate like other markets.

In the health insurance market, he claims, insurers are in the unique position of increasing profits by decreasing service, i.e. denying claims. While these conditions run counter to the way most markets work, they are not unique to health insurance. Indeed, one needs to look no further than your friendly neighborhood bank for an example of a market with the same set of profit motives, yet without double digit inflation or customer horror stories.

When you deposit money in your bank, your bank could theoretically deny you service, keep your money, and increase its profits. But they don't. Even given the billions of dollars banks could potentially keep, they do not take a penny. Now they might accidentally lose your money playing the stock market, but their intention is always to give your money back, with interest, because it's your money. This differs from health insurance, where a person can pay their premium every month for years, only to be denied coverage when they really need it.

For some reason, we have accepted a system that we pay into regularly, but have no guarantee of getting anything back. Why would anyone choose such a flawed way to pay for medical care? Well, they wouldn't. They would take whatever insurance is offered at their job, whether it was good or not so good, because any insurance is thought to be better than no insurance, though lately this point is debateable.

When choosing a bank, most people seek stability and reliability. If a bank ever tried to pull the same shenanigans as health insurers, they would lose all of their accounts and be bankrupt before the end of the business day. This is because people are able to easily pull their money out of a bank and take their business elsewhere. This is the real failure of the insurance market.

If someone wishes to change insurers, they must give up the thousands of dollars of premiums they have already paid into the system. If a person's insurer denies them coverage based on a contractual technicality, those premiums are gone, headed straight to the insurer's bottom line.

By now the solution should be obvious. We simply need to change the way we treat insurance premiums; instead of a subscription payment, we should see it as an account deposit. If a person decides to switch insurers, they should be able to take to back what they have already paid into their account, just like when a person switches banks. If an insurer chooses to deny coverage, they must return all of the customer's payment, in full, with interest, just like with a bank.

This will of course require Congressional action, but a bill with this idea at it's core would easily garner bipartisan support. Republicans would have to support it on competitive, free market principles, and Democrats would have to support it for it's populist theme. Insurers would hate it, but that would only increase the bill's popularity.

This plan might require an expansion of the FDIC, since insurance companies would essentially be banks with a mission. These new insurance banks would likely need stricter reserve requirements than regular banks (we should probably be stricter on a regular banks as well, but that's a story for another day). We could offset the government expansion by drawing down many other areas of our current insurance regulation apparatus.

This is but one of many fundamental changes we must make to our health insurance market to improve its efficiency and responsiveness to customer demand. Congressional plans that include a ban lifetime benefit caps, or plans that bar denial of coverage because of pre-existing conditions, serve only to treat the symptoms of a fundamentally diseased system.

By shifting insurers into "health banks," we force them to compete for customers, since stealing their money is no longer an option. Insurers will increase their level of service or perish, which will benefit everyone, save for insurance executives, who will have to work a whole lot harder for those million dollar bonuses.

Insurance companies are really nothing more than banks that can get away with murder, figuratively and literally, so why not make them play by the same rules as banks? It can only help.

Thursday, August 27, 2009

UPDATE: Robot Apocalypse

Postal Service: Model For Public Insurance?

The US Postal Service is instituting an employee buyout plan in order to staunch their hemorraging budget.

The Postal Service lost $2.4 billion from April through June, according to numbers released earlier this month. The agency has lost $4.7 billion so far this year and expects to be $7 billion in the red by the end of the fiscal year on Sept. 30.
And they're just carrying letters. Imagine how much money we could lose if we had public insurance.

Death By Burrito

So I found a nutrition calculator for my favorite burrito place, Chipotle, and discovered that what I thought was a relatively healthy lunch is probably going to give me a heart attack. Here's the rundown of my favorite fajita burrito:

Now I know why it's so delicious.

Wednesday, August 26, 2009

It Comes Down To Resources

Realpolitik (German: real “realistic”, “practical” or “actual”; and Politik “politics”) refers to politics or diplomacy based primarily on practical considerations, rather than ideological notions. Some pundits believe that realpolitik is the reason we are involved in the Middle East, to access their enormous oil resources.

And they are totally right. Getting control of resources has been the geopolitical rule since before people even knew the earth was round. Offensive war is an expensive proposition, so it better pay dividends, otherwise why do it? Our global military is not for defense; we have ballistic nuclear missile subs to flatten any attacking country.

No, our military is there to provide a softer touch, a constant reminder to the world that we are the alpha dog. It's saying, "Don't mess up the order of things because when things get messed up, we lose money." And it works, for the most part. But not everyone is happy with our dominance, especially when that dominance means we're in their back yard, vis-a-vis oil in the Middle East.

The blowback we experienced on 9/11 was orchestrated by Saudis hanging out in the hinterland of Afghanistan. According to Dan, this was done because they didn't want us in the area. Yet we are in hundreds of other places across the globe and do not elicit terrorist bombings, so can that REALLY be the reason? I don't think so.

What makes the Middle East different? Well, many are oil funded, Islamofascist, welfare states, so perhaps we should break this down.

Oil is the number one export from the region by a wide margin. As such, we send billions upon billions of dollars to the Middle East every year for our favorite resource. You would think that they would be singing our praises, since we give them so much money. Look at China, they love us. But without America, the Middle East wouldn't make nearly as much money as they do now. Yet they claim we are the devil.

Which brings me to Islamofascist. The Qur'an is the constitution in Saudi Arabia, making most Americans unconstitutional just by living. So it's clear we have an ideological impasse, as their countries sanction wife beating and forbid drinking, and most Americans would be uncomfortable in a culture like that. The real leaders in these Islamic nations are the religious figures, and despite all the money we send them, they must condemn us for our wicked, sinful ways while they take our stacks of cash.

Which brings me to my third point: Saudi Arabia, Iran, and others are strong welfare states. This is inevitable when your country has one valuable natural resource and not much else, as this high concentration of wealth cannot support a country without heavy redistribution. The result of this economic one-trick pony is an atrophy of other business ventures in the region. Why build a factory when you can just pump oil out of the ground? They don't even do any refining over there, they just don't need to to stay solvent.

So what does this mean for us? Well for starters, we're dealing with resource rich, intellect poor nations. It's not their fault, but it leads to an imbalanced state, with little private money to fight government overreach. This wealthy government can run rampant without consequence, as the oil market isn't drying up any time soon, and the people of the Middle East get harsh religious governments.

What I'm getting at is that due to the opiate-like effect oil has on a nation, the Middle East is economically underdeveloped. The private sector has little money, by which I mean little resources, and thus has little power. So even if your average Saudis wanted a less strict legal system, they have no recourse, no money, no resources, no power. This desperation is expertly twisted by their religious leaders into hatred towards the United States, as if we are to blame for their shitty lives. But it's not our fault, we're just trying to buy some oil.

So what does this mean for Afghanistan? First, it has no real economy to speak of, and no real government, so the Taliban rose to power--it had no real challengers. The Taliban also controlled one of Afghanistan's few exports: opium. Farmers of opium poppies were able to make a little money under the Taliban regime, so they didn't want to change to an anti-drug system.

The governor of one region of Afghanistan estimated that two out of three people supported the Taliban because they were involved in the drug trade, and American supported forces are against drug production. So it's no wonder we're having so much trouble there, they need money, but we are trying to cut off one of their few markets.

But no one is going to live under the Taliban's iron fist if there is a better option. We just have to show them that option, first by legalizing poppy growing. By bringing the poppy economy into the light we will empower people across Afghanistan. They will no longer need to rely on the Taliban, and the Taliban will lose their main revenue stream. They will see the benefit of peace over insurgency is more money, more resources.

So it does come down to resources. Afghanis need enough resources to survive, yet we tell them their most valuable crop is illegal. They turn to the Taliban because they have no other options. By legalizing poppies we will cut the Taliban off at the knees, and encourage economic growth. With the Taliban out of the way, Afghanistan can stabilize and develop an economy, which will encourage further stabilization. Afghanis will fight to keep the government structure that allows them to make the most money. But this humanitarian effort is not without economic reward for America too.

Afghanistan, though resource poor, is valuable in it's proximity to oil rich nations, making it the perfect place for a pipeline. So using realpolitik reasoning, it is in our vital interest to stabilize Afghanistan in order to deliver oil more efficiently to us and our trading partners. And if we have to stabilize and democratize a few nations along the way, so be it, but really it comes down to resources.

Robot Apocalypse: Get Ready