Detailed Abstractions

As most know, late last week, smaller health insurance companies sent out press releases detailing a simple fact – when mandates increase, so will premiums (via WSJ here):

…Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators….

To most, this might seem an obvious consequence of the legislation.  The economics and logic of these required rate increases are undeniable.  If someone, in this case the government through force of law, tells a private business that they must increase their spending, under force of law, some, if not all, of those new expenditures will be passed on to consumers (WSJ continues):

…Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates….

…Aetna, one of the nation’s largest health insurers, said the extra benefits forced it to seek rate increases for new individual plans of 5.4% to 7.4% in California and 5.5% to 6.8% in Nevada…

…Regence BlueCross BlueShield of Oregon said the cost of providing additional benefits under the health law will account on average for 3.4 percentage points of a 17.1% premium rise for a small-employer health plan…

…In Wisconsin and North Carolina, Celtic Insurance Co. says half of the 18% increase it is seeking comes from complying with health-law mandates….

Not only should this seem obvious, but in a free country, any company should be able to set their rates for their services.

This of course assumes you don’t work for the government – then the news is shocking (WSJ continues):

…The White House says insurers are using the law as an excuse to raise rates and predicts that state regulators will block some of the large increases.

“I would have real deep concerns that the kinds of rate increases that you’re quoting… are justified,” said Nancy-Ann DeParle, the White House’s top health official. She said that for insurers, raising rates was “already their modus operandi before the bill” passed. “We believe consumers will see through this,” she said….

Not only shocking – but so wrong that even more force is needed.

Enter the Department of Health and Human Services threatening private business, for making private decisions, solely because those decisions disagree with the government’s predictions (via HHS website – bold added):

It has come to my attention that several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act.  I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases….

…We estimate that that the effect will be no more than one to two percent….

…Given the importance of the new protections and the facts about their impact on costs, I ask for your help in stopping misinformation and scare tactics about the Affordable Care Act.  Moreover, I want AHIP’s members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections….

Think carefully about some of  these words/phrases used by government officials against private businesses in a free country: zero tolerance, misinformation, not tolerate, unjustified….all for raising theirs rates at a greater rate than the government assumed.

Maybe it’s just me, but when the government threatens people for fishy emails, then moves forward to threaten private business for deciding what to charge for their services…. well, it certainly doesn’t appear to be a free society.

As Thomas Jefferson stated so many years ago:

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

Boxer might lose?!?!  In what has to be either a sign of the end times or a sign of our bright future, Senator Barbara Boxer is in a tight race against former HP CEO Carly Fiorina (via the Atlantic here):

The latest Field poll looks a bit troubling for Sen. Barbara Boxer: she leads her Republican opponent, former HP CEO Carly Fiorina, by just three percentage points (47% to 44%)…

San Fransisco’s City Council, in an attempt to prove themselves the absolutely dumbest people on Earth, might ban the sale of pets (via Huffington Post here):

…If the ordinance passes San Francisco could be the first city in the nation to ban the sale all pets except fish….

The IMF tells the US to slow down on spending (via the Hill here):

The United States must rein in its deficits sooner than President Barack Obama wants, the International Monetary Fund (IMF) said Thursday.

In an annual report on the U.S. economy, the IMF said the U.S. faces a “central challenge” in implementing a “credible fiscal strategy” to ensure that public debt is put on a sustainable path without putting the economic recovery in jeopardy….

The NSA responds to the WSJ article (posted here yesterday) concerning the “Perfect Citizen” program (via the Atlantic here):

Today’s Wall Street Journal article by Siobhan Gorman, titled “US Plans Cyber Shield for Utilities, Companies,” is an inaccurate portrayal of the work performed at the National Security Agency. Because of the high sensitivity surrounding what we do to defend our nation, it is inappropriate to confirm or deny all of the specific allegations made in the article. We will, however, provide the following facts: PERFECT CITIZEN is purely a vulnerabilities-assessment and capabilities-development contract. This is a research and engineering effort. There is no monitoring activity involved, and no sensors are employed in this endeavor. Specifically, it does not involve the monitoring of communications or the placement of sensors on utility company systems. This contract provides a set of technical solutions that help the National Security Agency better understand the threats to national security networks, which is a critical part of NSA’s mission of defending the nation. Any suggestions that there are illegal or invasive domestic activities associated with this contracted effort are simply not true. We strictly adhere to both the spirit and the letter of U.S. laws and regulations….

I’m not saying I automatically disagree that their statement is completely accurate, but we should not forget the NSA is the same agency who for years denied even having something like Echelon.

In other administration news, WSJ Online is reporting (here):

The federal government is launching an expansive program dubbed “Perfect Citizen” to detect cyber assaults on private companies and government agencies running such critical infrastructure as the electricity grid and nuclear-power plants, according to people familiar with the program….

As a concerned citizen, you might ask yourself… how will this work?

…The surveillance by the National Security Agency, the government’s chief eavesdropping agency, would rely on a set of sensors deployed in computer networks for critical infrastructure that would be triggered by unusual activity suggesting an impending cyber attack, though it wouldn’t persistently monitor the whole system, these people said….

& herein lies the problem…. the internet wasn’t designed to predict or prevent attacks, so the question becomes – how do they plan to do this?

Do they plan to redesign the internet?  Or do they plan to spy on all computers connected?  Combination of both?*

In this age of “transparency” I’m sure we can find out:

….Defense contractor Raytheon Corp. recently won a classified contract for the initial phase of the surveillance effort valued at up to $100 million, said a person familiar with the project.

An NSA spokeswoman said the agency had no information to provide on the program. A Raytheon spokesman declined to comment….

Ahhhh…. that clears it up.  The administration bent on transparency is implementing a secret program to monitor most internet activity without telling anyone what it is.

Please note: I do agree that say specific intrusion detection techniques and encryption would be left out of the public.

But for this administration, the transparent, no more Patriot Act administration, to task the world’s number one cyber-spy agency to secretly monitor internet activity of American citizens without telling those citizens exactly what it’s doing – well, whatever it is, it’s not transparent.

*side bar* To get an idea of cybersecurity threats, how difficult it is to detect without intruding on personal computers, and just an overall great article about a real life cyber-mystery, I highly recommend The Enemy Within published by The Atlantic:

When the Conficker computer “worm” was unleashed on the world in November 2008, cyber-security experts didn’t know what to make of it. It infiltrated millions of computers around the globe. It constantly checks in with its unknown creators. It uses an encryption code so sophisticated that only a very few people could have deployed it. For the first time ever, the cyber-security elites of the world have joined forces in a high-tech game of cops and robbers, trying to find Conficker’s creators and defeat them. The cops are failing. And now the worm lies there, waiting ……

The full article is well worth the time.

The 9th Circuit strikes again…. via LA Times (here):

SAN FRANCISCO — A sharply divided federal appeals court in California on Monday exposed Wal-Mart Stores Inc. to billions of dollars in legal damages when it ruled a massive class action lawsuit alleging gender discrimination over pay for female workers can go to trial….

Now I don’t claim to be a lawyer and haven’t even played one on tv, but part of the dissent seems obvious to me:

…Judge Sandra Ikuta wrote a blistering dissent, joined by four of her colleagues.

“No court has ever certified a class like this one, until now. And with good reason,” Ikuta wrote. “In this case, six women who have worked in thirteen of Wal-Mart’s 3,400 stores seek to represent every woman who has worked in those stores over the course of the last decade — a class estimated in 2001 to include more than 1.5 million women.”…

Maybe they like being overturned (here from 2007)?

…The 9th Circuit also has a long-running streak as the most overturned, which went unbroken this year. The Supreme Court reviewed 22 cases from the 9th Circuit last term, and it reversed or vacated 19 times….

Via WSJ, The Big Brown Union Bailout

If you can’t beat ‘em, have Congress hobble ‘em. That’s the motto of some in corporate America, and Exhibit A might be United Parcel Service’s campaign to get Washington to impose its labor woes on rival Federal Express. This would be one more union bailout at the expense of business competition and economic efficiency….

This is a continuation of this administration’s policies to pay off unions at the expense of others (DA posts here).

Via Reason.com, GM’s Phony Bailout Payback

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy….  So when Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case….

I say if you want to buy American, buy Ford – no bailout money and still going strong.

& cool science news via e!Science (here):

…In a study published as an Advance Online Publication in the journal Nature Nanotechnology on Sunday, physicists at Ohio University and the University of Hamburg in Germany present the first images of spin in action….

Obamacare - was the final push an act of noble means or just hubris? (via Reason.com here)

…At a time when America’s economy is still in bad shape and when we face numerous problems abroad, Obama has put the country through a shattering political battle—and, with legal challenges and promises of repeal, the fight may be just beginning.

This seems, at the moment, less a monument to idealism than to hubris.

Rep. Mike Honda, D-CA seems to think Fannie Mae knows their stuff (via Politico here).  In asking for more money to prevent legal foreclosures, he gives us this:

…In addition, Fannie Mae estimates that as many as 50 percent of the minority homeowners who received a subprime loan should have qualified for a prime loan. This clearly indicates the need for housing counseling services….

With all due respect to Mr. Honda, I think all this clearly indicates is poor critical thinking skills.  When a GSE which apparently knew nothing about the impending crisis and was proactively laying down on the job when it came to auditing loan standards gives you estimates on who might or might not have qualified for what kind of loan – laughter is the appropriate response.  Not regurgitation.

Cato on telephony deregulation, cell phone innovation, & ingratitude (here).  Discussing his memories as a child where phone line were costly and long distance was only slightly less expensive than actual driving as compared to today’s age:

Then came the breakup of the AT&T monopoly in 1984. Phone technology and competitive service provision exploded. In 1982, Motorola produced the first portable mobile phone. It weighed about 2 pounds and cost $3995.

Within a very few years they were much smaller, much cheaper, and selling like hotcakes.  Today there are some 4.6 billion mobile phones in the world, and counting, or about 67 per every 100 people in the world.

Then he moves forward to the ingratitude:

And to celebrate this incredible achievement, Slate and the New America Foundation are holding a forum titled “Can You Hear Me Now? Why Your Cell Phone is So Terrible.”

From the CEI (Competitive Enterprise Institute), we learn the EPA is about to expand its powers (here):

Washington, D.C., March 30, 2010 – The Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) are expected this week to finalize their joint greenhouse gas (GHG)/fuel economy standards rule. This will make carbon dioxide an “air pollutant subject to regulation” under the Clean Air Act for the first time. The rulemaking, and the endangerment finding that is its prerequisite, will allow EPA to immediately exercise and continue to amass powers never delegated to the agency by Congress….

I suppose those supporting the decision know nothing about the EPA’s massive failure in just the Energy Star program.

Lastly, as a reminder, most places and people in the US did NOT buy homes they couldn’t afford (via WSJ here):

The U.S. still is feeling the effects of widespread housing bust, but a new report serves as a reminder that large swaths of the nation didn’t experience a boom in home prices and hasn’t suffered from the bust….

In fact, most of the insane double digit growth in real estate prices were in 5 main areas – NY corridor, Florida, Arizona, California, Nevada.  Make of it what you will that almost all flyover states never experienced the irrational boom, to be inevitably followed by the burst.

Proving how little we truly understand about addiction, a new study (via UK Telegraph here):

Bingeing on junk food is as addictive as smoking or taking drugs and could cause compulsive eating and obesity, a study has found.

According to the research, rats when given junk food, will crave it in a similar fashion to much harder drugs, as it all uses the same pleasure center:

…As these pleasure centres become less and less responsive the animals quickly develop compulsive overeating habits, consuming larger quantities of high-calorie, high-fat foods until they become obese.

The very same changes occur in the brains of rats that over consume cocaine or heroin…

I wonder if this will put to rest the nicotine is addictive as cocaine meme?  Or possibly destroy the idea of heroin addiction altogether?  Whatever it does do in the end, it should give us pause anytime we hear “as addictive as…”

John Stossel on government testing (here).  Among the other illuminating information, you can read about GAO’s audit of energy star products, including this gem:

…The GAO attached a feather duster to a space heater, sent the photo to the EPA, and got approval in just 11 days…

All told:

GAO sustained Energy Star certifications for 15 bogus products, including a gas-powered alarm clock.

Via WSJ, In War Between States and Feds, Utah Strikes Latest Blow:

All is not well between the states and the federal government….states in recent months have signed sovereignty statements….last week, more than a dozen states sued to strike down the new federal health-care law…..Now….Utah Governor Gary Herbert on Saturday authorized the use of eminent domain to take some of the U.S. government’s most valuable parcels….

This should get interesting.

Lastly, an interesting idea via HBR (here).  Asking CEO Tim Brown:

…what does it take to bring about such mass behavior shifts? Are there approaches that businesses could use, too, to influence behaviors on a micro level, and gain benefits on a macro one?…

• I think there is still a health care debate even though the bully pulpit isn’t wanting to increase attention to this, but writer Michael F. Cannon from the Cato Institute diligently continues to shed light on the issue.  As one of the best writers on the subject I recommend everything he has written or papers he has published on the subject.  For now, he has a three part series worth the time for anyone interested in learning more: Questions for Thoughtful Obama Care Supporters (Part I, Part II, Part III)

• It might not matter, the health care bill hated by all might be pushed through with various legal and procedural maneuvering.  here via Cato

• Interesting medical research showing correlation: As girth grows, risk of sudden cardiac death shrinks.  I question their use of BMI to identify normal/underweight as as 6’4” person can weight as little as 160 and still be normal (chart), but hopefully it will help them understand that stats are useful tools, but for things such as medicine…. due to the unique nature of us all, the future is individually built therapies, not government programs to change the BMI of an entire nation.

• John Stossel writing Reform Does Not Mean More Rules in response to Senator Chris Dodd’s proposed overhaul of financial regulation:

The New York Times headline says Dodd’s Bill “Adds Layers of Oversight”.

Just what we need: 1,336 pages of additional “layers.”  Senator Dodd is as ignorant as he is arrogant.

• Lending credence to Mr. Stossel’s position, How the Fed slept through Lehman via Rueters

• Cornell MBA student says bet against Warren Buffett (here via WSJ).  Not saying I agree, but I do agree with WSJ – always nice to see someone attempting to break conventional wisdom.

• Here come’s the CFPA…. known as the Consumer Fraud Protection Act, which is shaping up to confirm my theory on the titling of bills.  Meaning it will not protect anyone, including consumers, from anything, including fraud; which I thought was already against the law….  More @ Reason by Tim Cavanaugh here.

• More psychology study showing evidence that concealment or perceived anonymity can lead to more unethical behavior.  via Time here

• Via Calculated Risk, Home Builders $2.3 Billion “Gift” from Taxpayers, demonstrating our government’s utter indifference to the economic realities associated with propping up businesses which should naturally contract during a correction.

• Cato on the government’s continued refusal of basic facts showing government employees earning more on average than their civilian counterparts (here)

• Obama administration to reverse decision on trying terrorist mastermind in NY & instead opt for a military tribunal – via WSJ here

• For light reading, America’s Craziest Cities @ The Daily Beast where they rank cities based upon stress, drinking, eccentricity, and number of psychiatrists.