Supersonic Man

May 31, 2014

the unifying force of conservatism

Filed under: Rantation and Politicizing — Supersonic Man @ 11:48 am

The Republican party, which as we know is in a fairly desperate situation with regard to attracting younger voters, may have hit on something that will help: they’re beginning to dabble in marijuana reform.  This has always  been attractive to libertarians, and as the religious fundamentalists and old-south racists fade away as electoral powers, a libertarian wing of the GOP looks like it might be coming into ascendance.

There seem to be two branches to the GOP base.  (We leave aside, for the moment, the monied establishment insiders, and look just at mass voting groups.)  One includes the aforementioned fundies and racists, plus assorted other know-nothing antigovernment types such as the militia movement.  This is the traditional GOP base, the angry white male low-information voters, the foundation of the “southern strategy”… Bobby Jindal’s “stupid party”.  One thing that unifies this block is a negative attitude toward science and intellectualism.  This group is concentrated in the older generations and is, thankfully, fading away with time.

The other branch is not anti-intellectual at all, and isn’t particularly religious.  Many of its members are successful high-tech engineering types, or smart go-getters in finance.  It is racially colorblind as a rule, and not notably patriarchal or misogynistic (though it still may attract men a lot more easily than women).  Unlike the first group, they usually have modern attitudes about issues having to do with sex and drugs.  They have no problem indulging in the kinds of decadent lifestyles that the first group loves to hate.  This group includes libertarians, objectivists, and a variety of more mainstream groups who just happen to believe in enterpreneurship, small government, low tax, light regulation, and an ideal of meritocracy, such as for instance the Log Cabin Republicans.  It can include people who are in some ways quite radical, such as transhumanists.

The difference between the two groups is so wide that one might naturally wonder what they’re doing in the same party in the first place.  Where is their common ground?

The only one I can see is that they both defend privilege.  Libertarians back a system that lets all the people who have wealth and private power keep it and expand it.  Cultural traditionalists, including religious traditionalists, end up defending traditional advantages for favored groups.  Racists and sexists oppose taking any advantage from white males, who happen to include most of the rich and powerful people protected by the other groups.  They can all agree, basically, on letting the rich get richer, and though none of the three actually wants an impoverished middle class, they’re all capable of lying to themselves about that somehow being unrelated to the protection of the wealthy which they support.

So letting the rich get richer is now the only thing that the Republican party, as a unified whole, stands for.

May 29, 2014

why the insurance industry is highly regulated, and needs to stay that way

Filed under: Rantation and Politicizing — Supersonic Man @ 10:41 am

I currently work for an insurance company.  Not a great big one, but a leading one in its niche, and one that seems to treat its clients pretty well.  And I get to see firsthand the impact of heavy regulation on the company.  Some people look at this impact and argue that business would be much more efficient without it.  But that won’t work in this case.  I will explain here why the insurance industry needs this regulation.

Let’s assume that some insurance company executives are more ethical and principled, and others are less so.  Let’s consider the incentives acting on the latter group.  Getting high premiums is good, but drives away new customers.  Advertising lower premiums brings in new customers, allowing total revenue to go up by more than enough to compensate for the loss of margin on each.  So the incentive is to compete with other insurers with a low price.

Paying claims is bad.  It not only loses money right away, it forces the raising of premiums.  The more claims you can avoid paying, the more competitive a rate you can offer to new customers.

Now, the revenue of premium payers is steady, but the cost of claims is not.  One year might be twice as expensive as another.  This means you need a cash reserve.  But this needs slightly higher premiums, so the incentive is to keep it smaller.  Plus, there’s the all-too-human itch, when looking at a big pile of money, to start spending some of it.  So it’s all too easy to talk oneself into underestimating the degree of variability of claims — to assume that the exceptionally bad years won’t happen.

The cash reserve can earn money through investment.  Some investments pay more than others, but the ones that pay more also pay at a less predictable rate.  So the incentive is to underestimate that variability and invest in overly risky opportunities for capital growth.

Whenever a company has a few good years in a row, the amount of saving they’re doing for future claims starts to look excessive, and the incentive is to think that it’s now safe to cut back on savings, and lower premiums.

Put all this together and what you get is a situation where market forces push insurers toward being underprepared for major claims.  If some companies prepare well and others prepare poorly, the ones making poorer preparation will tend to get customers away from the ones preparing well, by offering lower prices.  This can force the companies that are reluctant to do so, to also shave their premium prices.  So the number of poorly prepared companies has to increase.  And because the rewards of underpricing are immediate but the negative consequences are uncertain and may not occur for many years, it’s very easy for people to convince themselves that they’re not underpricing at all.

Eventually, a crunch will come — the investments may go south, and at some point the big claims will hit.  If the investments do poorly enough, even routine claims may suddenly be too big.  Once this happens, the company can either exhaust their capital, or cheat their customer, coming up with some technicality as a grounds to refuse to pay a claim.  The latter might work, or it might make them liable to a costly lawsuit.  Either way, it’s not sustainable.  Eventually, you either have to give up the money, or lose your reputation so customers won’t trust you with their money anymore.

Now a free market apologist might argue that the market will eliminate these bad companies eventually, thereby leaving the good ones behind.  But once some companies turn bad, competitive pressure forces the others to either get down in the mud with them, or shrink and become minor niche providers.  This means that the majority of customers buying insurance end up being not really insured.  Legally they’re covered, but in practice they aren’t — they’re still subject to the risk they tried to eliminate by insuring themselves.  The result of this is that the entire industry ceases to function; no real insurance is being provided except to a select few who are willing to pay a top-shelf price for it.

As a result of this, the only way to have an insurance industry that really insures people is, firstly, to force them to expose their financial data so that everyone can see if they are at risk of failing to pay claims. And to test those findings against some standards of financial preparedness.

But that’s not the only issue.  Even when all the insurers are financially healthy, each one still has an incentive to resist their obligations to pay claims.  There’s always an immediate reward for finding ways to deprive a customer of coverage when they make a claim.  And if some companies do so and others don’t, those companies gain a pricing advantage in the short term.  This can mean that the whole industry, again, can be dragged toward failing to really cover their customers.  This isn’t theoretical: a situation like this did happen in the pre-Obamacare health insurance industry.  It became the norm to cheat and rob many customers through legalistic trickery.  (We shall see in time how much difference the new law manages to make.)  The auto collision insurance industry has allegedly also showed tendencies in this direction, when the regulatory climates of particular states allowed it.

Again, the free market does not weed out the bad apples — or rather, it doesn’t weed them out quickly enough to discourage their proliferation.  Instead, it pushes the good ones to emulate the bad.  And even if you clean out all the bad ones, the least good of the ones remaining will still exert a slight downward pull, which increases with time.

The only way to overcome this steady downward movement is to put a floor under it, which means setting and enforcing minimum standards of dependability in paying claims.  Our current regulatory environment, unfortunately, is spottier in this area than it is in the financial one.  But when and where it’s done properly, the insurance industry can function pretty well, providing a valuable and necessary service.  When it doesn’t, the industry can gradually shift from useful to parasitical.  If that shift becomes complete, one might as well never have bothered to start insuring oneself.

May 13, 2014

cosmic inflation

Filed under: Hobbyism and Nerdry,thoughtful handwaving — Supersonic Man @ 10:24 am

This post has been promoted to a permanent page on my website, here.

April 1, 2014

the theory of funniness

Filed under: Hobbyism and Nerdry,thoughtful handwaving — Supersonic Man @ 11:41 am

This post has been promoted to a permanent page on my website, here.

October 22, 2013

“pension crisis”

Filed under: Rantation and Politicizing — Supersonic Man @ 5:30 pm

I’m starting to hear policymakers complaining again about the exploding cost of pensions, and looking for ways to screw their older workers out of the pay they were promised for doing their jobs.

Let me make one thing clear: there is no soaring cost associated with pensions.  Pensions are no more expensive, and no more valuable, than they ever were.  It is not their price that has gone up.  It is our willingness to pay that has gone down.  Pension costs are only exploding exponentially in comparison to what we currently like to pay working people.  Or in comparison to our willingness to raise tax revenue from investors and corporations.

The only reason we don’t realize how much less we’re all paid is because we can still afford all the insanely cheap consumer products we import from China, which don’t even make a profit for their manufacturers in many cases, and in a fairly real sense are probably paid for more by the federal reserve’s export of dollars for use by overseas capitalists as an international trading currency, than by the retail prices we pay in the big-box stores.

The anti-pension propagandists would have us believe that it was runaway pension costs that sunk the municipal government of Detroit.  Not true.  What ruined Detroit financially — besides the obvious problems of massive cutbacks in manufacturing employment throughout the region — was an “interest rate swap” scheme sold to them and other cities by Wall Street banks Merrill Lynch and UBS.  Sold, in some cases, by directly giving campaign contributions to the politicians who agreed to the plans.  Under this scheme, surprise: the banks got rich and the cities got poor.  Because this scheme was applied to the pension funds, suddenly the big budget hole was a “pension cost”.

September 28, 2013

the end of the US trade deficit?

Filed under: Rantation and Politicizing,thoughtful handwaving — Supersonic Man @ 9:55 pm

Two years ago, I wrote a post about deficits, and whether we should respond to the recession by printing even more money.  It discussed the causes of our deficit spending, and the theory which says that it’s impossible not to run a constant governmental spending deficit as long as we run a trade deficit… which means, in other words, as long as other countries keep selling us goods in exchange for dollars that they don’t spend back here, but instead use as the medium of capitalism at home.  This theory, as best I know, is most identified with the liberal economist James Galbraith.  It says that as long as we act as treasurer and currency supplier to capitalists overseas, we must run corresponding deficits domestically, which means the shortfall has to be either borrowed or printed (and watch out you don’t print too much).

But now I’m hearing about interesting happenings on this front from the more conservative economist John Mauldin.  And there’s big news here that I never expected.  I had thought that the “strong dollar policy” — the political decision to encourage worldwide demand for dollars, which produces all our deficits — would be something that it might be very difficult to back our way out of.  Among other things, it would require that some other currency could step up and be the new “reserve currency” that people use for international wealth.  I thought no other currency was in a position to take on that role.

Well, it looks like the Chinese renminbi (or yuan, informally) is starting to do just that.  And at the same time, the US is starting to do a lot more exporting.  Some of this has to do with increased fossil fuel production, some of it has to do with decreased wages, some of it has to do with Obama administration policies… and maybe some of it is actually a direct result of yuans coming out to play.

So quicker and easier than I ever thought could happen, we might be scaling back our production of dollars to a volume more suitable for a domestic economy.  And we’ll start seeing “Made in USA” on products again… which means that the incredible cheapness we’ve become accustomed to from Chinese products will become a thing of the past. (Some of the products we import now actually lose money for their makers.)  This would mean people will start to feel how poor they’ve actually become, and want better pay.  It’ll cause some discomfort.

And meanwhile, the newly ascended Chinese economy will find its greatest source of wealth drying up, and suddenly have to create prosperity on its own.  These factors will all tend to create a negative feedback on any such change, causing an inertia that will slow down the transition.  But Mauldin believes it will still happen faster than anyone expects.  Maybe, maybe not.

Mauldin’s friend David Brin, the SF novelist, points out one aspect of this which I hadn’t appreciated: namely, that the strong dollar policy, though best known here for how it hurt American workers, has done a tremendous amount of good for people overseas.  It has subsidized the creation of middle classes in China, India, and many other countries. It has helped lift a huge number of the world’s citizens out of poverty!  Brin has been accused of exaggerating the economic importance of this money, but still, in that light, the mild impoverishment of the American working class suddenly doesn’t seem like such a high price.

The “quantitative easing” that has been supporting the big banks since the last crash has also done a lot to stimulate developing economies, Mauldin says. That obviously needs to wind down. The Fed has warned that the first decreases may start soon.

Maybe the strong dollar policy’s job is now largely done and it’s time to move past that phase — time to wean the developing world from the dollar teat, in Brin’s terms.  It’ll have to be a gradual thing — too sudden a move might cause a crash in areas with a lot of current dependency on that cash flow.  And even a very gradual reduction is going to eventually cause some kind of shakeout. But apparently that transition is under way.

But it does sound alarmingly like it all depends, more than anyone likes to admit, on natural gas fracking. Which means that tightening the environmental regulations on that very unclean practice might end up restoring all our deficits. At least for the short term. This certainly helps me understand why policymakers are so eager to continue fracking despute the blatantly awful environmental costs… because it produces wealth vast enough to reshape the entire world economy.

September 27, 2013

Why I marched against Monsanto

Filed under: Rantation and Politicizing — Supersonic Man @ 10:24 pm

This post has been promoted to a permanent page on my website, here.

September 21, 2013

Java is doomed?

Filed under: Hobbyism and Nerdry — Supersonic Man @ 9:25 am

I was talking earlier about Windows now having a somewhat bleak future despite still being firmly dominant today, and now I have to recognize something else that’s gotten itself into a similar position: the Java language. Over much of the last decade it’s probably been the most widely used programming language… though it’s hard to be sure, and it certainly was never in any position of majority dominance.  But now nobody sees any kind of growth in its future, and other languages like C# are making it look outdated.  Combine that with the well-publicized security troubles which, among other things, nailed shut the coffin for applets in the browser (the one place where the average computer user came into direct contact with the Java brand), and nobody’s seeing it as the right horse to bet on anymore.

Which is a shame, because it’s still one of the most widely supported and most available languages, and it’s probably still the best teaching language in the C-derived family.  It’s going to have to be fairly widely used in schools, even if it drops slowly out of use in industry.  There isn’t a suitable replacement for that role yet, as far as I can see.

Even as it gets into a state where people scoff at it for real work, it might still be unavoidable for a long time as something you have to know.

. . . . .

Another sad observation of decline: I think MS Office is now better at supporting Open Office than OpenOffice.org is at supporting MS Office.

September 10, 2013

strict doctypes and old markup

Filed under: Hobbyism and Nerdry — Supersonic Man @ 9:49 am

I thought strict doctypes, like XMTML Strict, were just for eliminating all the deprecated HTML tags that were used for stuff that now uses CSS, such as <font> and <center>.  But there are a couple of gotchas with it.  For instance, strict [X]HTML does not allow you to put a target= attribute on a link.  Apparently this is considered a matter of presentation and styling, though only cutting-edge implementations of CSS support setting it in a stylesheet.  But the one that really makes me scratch my head is that <blockquote> is only allowed to contain block-level elements.  What?  The obvious semantics of a block quote are that it should contain text.  But no, now it’s only supposed to contain paragraphs and divs, not act as a paragraph in itself.

(I’m posting this partly just as a sort of note to myself.)

I do try to use modern standards, but my website has content dating back as far as 1996, so no way am I going to clean out all the old <font> tags.

Maybe I should at least validate capejeer.com, since the content there is all fairly new, and generated from a single master page that I can easily modernize.

[update] I did: capejeer.com is now fully XHTML Strict compliant, though paulkienitz.net still has tons of content that’s stuck at a Netscape 4 level of markup, using no CSS at all.  The front landing page is the only part that uses any modern browser technology, and even that dates mainly from about 2005.

[update 2] I made a spreadsheet of all the HTML pages on paulkienitz.net assessing their state of modernity in terms of styling.  The current status is:

  • root level: almost everything is archaic except the index page and the one page that draws the most search traffic.
  • the old film-era photo gallery folder (which frankly, has been an embarrassment for some time, and really needs updating, or even just some severe culling) is also completely archaic.
  • the Enron & Friends material is 90% bad, with a light sprinkling of modern style tweaks, but the current events movie reviews in the same folder are 90% good.
  • the B movie folder is good, and the boids folder, plus bits in the Amiga folder and the Reagan folder.
  • two of the biggest folders are good, but they’re both unfinished projects which are not yet exposed to the public.

The question is, which of these archaic areas is even worth updating?  The answer would be, almost none.  They’re all dated, essentially of historical interest only, except for the gallery, where markup is the least of its problems.

August 28, 2013

automation is going to take our jobs

Filed under: the future!,thoughtful handwaving — Supersonic Man @ 10:28 am

This post has been promoted to a permanent page on my website, here.

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