Author Archives: nedthehead

Climate Change Questions

Posted on by
1

http://blogs.scientificamerican.com/observations/2012/03/17/effective-world-government-will-still-be-needed-to-stave-off-climate-catastrophe/

Mr. Stix posits some intellectually honest questions regarding implementation of climate change policy.

How do we overcome our hard-wired tendency to “discount” the future: valuing what we have today more than what we might receive tomorrow?

I agree it’s hard-wired. So “overcoming” it is clearly the role of religion.

Would any institution be capable of instilling a permanent crisis mentality lasting decades, if not centuries?

Fear of going to hell has worked for many religions for centuries….

How do we create new institutions with enforcement powers way beyond the current mandate of the U.N.?

May I suggest “The Prince” – these power-consolidation problems have well known solutions…

Could we ensure against a malevolent dictator who might abuse the power of such organizations?

Please re-read “The Prince” (I’ll save you some time – the answer is “No”…)

Ned Rico

Posted on by
1

Rick Santorum invited me to attend a campaign rally with him in Puerto Rico this weekend. Right before the event we had a free hour so Rick tried to grab a few rays, and I took a swim. Of course one thing you learn on the campaign trail is that you really give up a lot of your privacy so the next thing you I’m back on the Drudge Report again…

Putting the “Strategic” in Petroleum Reserves

Posted on by
Reply

When they named is the “Strategic Petroleum Reserve” I’m not sure the sitting president’s re-election strategy was the one they had in mind…

U.S. and Britain Agree to Emergency Oil Stocks Release

Rising world oil prices have pushed the cost of gasoline in the U.S. up sharply, threatening to stall economic recovery ahead of Obama’s bid for re-election in November.

Also

While there is no significant disruption of world oil supplies at the moment, sanctions on Iran are expected to cut its output when a European Union embargo takes effect from July.

Since there are no major supply disruptions that are artificially driving up the price, it stands to reason that prices are rising because of fundamentals and will simply go back up once our “strategic” release is over. This release is an attempt to temporarily juice oil prices to the downside for political reasons.

“The Obama administration can only take so much political pain from rising gasoline prices, which pose a serious threat to the economy and the president’s re-election,” said Bob McNally, a former White House energy adviser and head of U.S. energy consultancy Rapidan.

Candidate Ned hereby pledges not to use public resources for his personal political benefit.

High Tech White House

Posted on by
Reply

http://www.computerworld.com/s/article/print/9225132/White_House_CIO_s_first_40_days_included_worst_day_ever

“The White House CIO office had one data center, said Colangelo. “We had no redundancy,” he said
…
“When it was all said and done, in the first 40 days of the administration we were down 23% of the time,” said Colangelo. ”

You thought that the most powerful man on the planet had state-of-the-art tech?  Or, heck, even an email server that worked?  No, actually it is worse than what an impoverished kid living in a hut in Brazil gets for free from Gmail.

“Colangelo was also open to new ideas.
An intern in the Council of Economic Advisors, who had a computer science background but was working on projects unrelated to his training, sparked the effort. When asked to update a spreadsheet or a memo, he automated it using macros or some other type of technology to make it move faster. ”

Wait, “using macros” was a “new idea”?  The intern probably blew the office away when he introduced them to “track changes.”

“The program also led to the development of survey tools, memo generators, and an online tool that replaced paper-based goods and services processing.
“I’m proud of what we’ve done here,” said Colangelo. ”

You should be, Mr. Colangelo.  You should be.  The six-figure salary that you earn to deliver 1990’s tech is not nearly the compensation that you deserve for producing such a monumental achievement.

Now, if only we could get these guys to run our healthcare system…

Bad Investments

Posted on by
Reply

From http://finance.yahoo.com/news/underwater-locked-130036830.html:

The couple bought the home for $415,000 and later took out a $65,000 second mortgage. Today, Maria and Jose owe $245,000 more than their home is worth (which is $235,000) and have a loan to value ratio of 204%.
Selling the home without harsh negative consequences seems impossible without government assistance, a prospect that is unlikely at best.
Either a foreclosure or a bank-assisted short-sale would, in the best scenario, stain their credit rating and make it harder to buy a new home in the next few years. So they continue to pay monthly into a mortgage where they have no equity.

The amount of equity in the house is inconsequential. When Maria and Jose bought the house for $415,000 they knew that it would take 30 years to pay it back, and that their payment would be about $2,600 a month. Nothing has changed! They made a commitment to pay the mortgage for 30 years, but now they’re having second thoughts because they see the property has gone down in value. In the insurance business we call that a “bad investment”. I am very much against government action to compensate people for bad investments.

John Shore, age 62, says he can’t retire and move because he’s locked into mortgage payments on his severely ‘underwater’ home outside of Fresno, Calif.

This is just silly. Mr. Shore was going to have a mortgage payment whether the house was “underwater” or not. If he can’t retire because of the mortgage he obviously knew that would be the case when he took out the mortgage (which, at a typical span of 15 or 30 years, is about the most predictable bill any of us ever encounters). I suspect what Mr. Shore meant to say was “I bought this house as a speculative investment hoping to ‘flip’ it and it didn’t work out as I had hoped. Now I want the government to cover my gambling losses so I can retire.”

What ever happened to personal accountability?

Santorum

Posted on by
1

Call me a bit astounded at the GOP’s primary process that currently pits Romney against Santorum as the number two guy.  Let’s quickly review all of the other candidates that “popped” previously in the process and gave Romney a run for his money:

Herman Cain and his ‘999’

Michelle Bachman and her tea party caché

Rick Perry and his amazing résumé

Newt Gingrich and his stunning debate performances

Then let’s consider candidates like Tim Pawlenty who early in the race polled at higher levels than Santorum, but dropped out like a gentleman.  Ron Paul also has polled higher than Santorum for a good stretch of the campaign.

Is Santorum rising now simply because he was the worst of all of the other options?  If not, what explains his failure to connect with voters earlier like most all of his competitors?

More here.  Interesting quote from the article:

“Well, as you know, those delegates had to be filed in Virginia and all the way back in early part of December,” Santorum said. “And, you know, look, I’ll be honest, I mean, I was running across the state of Iowa and, you know, sitting in 2 percent of the national polls, with very, very limited resources, you know, we didn’t have the ability to go out.”

On Insurance Mandates

Posted on by
2

I thought I would share a few thoughts on the current controversy concerning insurance mandates, specifically as they relate to contraception. I feel I am very qualified to opine. You see, I spent my life in the insurance sector. As I sometimes joke, I spent a little time in the actuarial offices, I just didn’t inhale. I understand how insurance policies come, and how insurance policies go. And in that experience I’ve come to understand a few points about economics and insurance.

  1. Insurance is not designed to cover predictable activities. The purpose of insurance is to aggregate risk for unknown events. Insurance companies make bets about how likely a given event will be, and how much it will cost, based on their long term measurements of actual events. This allows them to charge you, the customer who doesn’t know how likely a given event will be, an average cost (plus a nominal profit) for coverage to pay for the unknown event should it occur. If an activity (such as eating, or a woman’s birth control for that matter) is predictable then it should be paid for out of pocket by the individual. It makes no sense to procure that item through insurance.
  2. Government cost savings calculations are a slippery slope with no intellectually defensible stopping point. The argument being presented for mandating contraception as part of insurance is that it saves money, since the cost of contraception is lower than the cost of pregnancy. The same can be said of food. The cost of feeding an individual for a year can be less than the cost of treating them for starvation (you can feed a person for a year for less than a couple days in the emergency room). So why don’t we mandate that insurance provide three square meals a day?
  3. Insurance mandates are a two way street. The political factions happy about getting free contraception through government mandate will probably be less happy when different political factions get into power and start mandating that all insurance plans cover firearms purchases. Clearly the cost of a firearm is lower than the cost of treating a person injured after an assault.

In my opinion we will all be happier in the long run if we quit using insurance mandates as a proxy for property redistribution by the government.

Taking Credit

Posted on by
2

Aside from the quality escape that the legend on the bottom of the video is mismatched from the labels on the Y-axis, this video is a little surprising to me:

President Obama appears to be taking credit for the increase in oil production over the last three years. Yet here is candidate Obama in 2008 explaining that it takes 10 years for oil drilling efforts to take effect (actually probably closer to 5):

It is misleading to point out that domestic oil production is up under the Obama administration, as the groundwork for the increase was clearly laid many years ago. I’m not aware of any specific actions the administration has taken in the last three years that would lead to increased production.

Congressional Groupon

Posted on by
Reply

I guess just about everyone has heard about Groupon by now but if you haven’t let me summarize: A “group coupon” is established where a certain number of people have to commit to buy before the coupon reaches the “tipping point”. If that point is reached then everyone buys. If that point is not reached then everyone gets their money back. The model solves the problem where a retailer can give a good price if and only if he/she sells a large quantity.

I want to apply this model to Congress. Right now just about everyone knows we need to cut federal spending, but nobody wants to be the guy or gal to actually do it. If a district elects a fiscally conservative representative they will likely fail to bring home their district’s fair share of pork barrel spending as they “unilaterally” vote to cut spending while all the other representatives vote to continue the practice. It only benefits the district to elect a fiscal conservative if a sufficient number of other districts do the same thing. So, I propose that we setup a “Congressional Groupon” where candidates running for office will pledge to vote to cut spending if and only if a majority of candidates from other districts make the same pledge (and are elected). If all of the candidates making the pledge are elected, such that they hold a majority in Congress, then the “tipping point” has been reached and they all vote to enact the spending cuts as pledged. Everyone shares in the pain. If they do not achieve the tipping point then none of the candidates are held to their promise and may all pursue continued deficit spending to benefit their districts.

It is impossible to enact spending cuts in a vacuum. If we can get a majority signed up for the Congressional Groupon then the voters in their districts can be confident in voting for fiscal conservatives without disproportionately hurting themselves.