Quotulatiousness

May 19, 2012

Salvage operation on Costa Concordia to cost more than £200 million

Filed under: Europe — Tags: , , , , — Nicholas @ 08:45

The Telegraph headline says £200 million, but the scrap value of the vessel must be much lower than that:

The operation is due to start in the next few days and is expected to take a year, with the battered ship to be towed to an Italian port in one piece and then dismantled for scrap.

“This is the largest ship removal by weight in history,” said Richard Habib, the president of Titan Salvage, the American company that has been given the job of raising the 1,000ft-long, 114,500 tonne cruise liner.

“The magnitude of the job is unprecedented. But we feel confident that we can do it and do it safely, with the least disturbance to the environment and the economy of Giglio.” The Concordia has been wedged on rocks and semi-submerged just a few yards from the coast of Giglio, an island off Tuscany, ever since it ran aground on the night of Jan 13.

[. . .]

The two companies’ plan for removing the wreck involves extracting the huge chunk of rock embedded in its side and patching up the torn hull.

Engineers and divers will then construct an underwater platform beneath the ship.

They will also fix steel compartments or ‘caissons’ to the side of the ship that is out of the water.

Two cranes will slowly pull the ship upright so that it rests on the submerged platform.

The caissons will be filled with water to help the cranes lift the massive weight of the ship.

Once the vessel is upright, more chambers will be attached to the other side of the hull.

All the caissons will then be emptied of water and filled with air, which will stabilise the ship in preparation for it being towed to a nearby port for demolition.

March 28, 2012

“[T]he Government of Canada is [like] a big national insurance company with a side business as a tax collector for the provinces”

Filed under: Cancon, Economics, Government — Tags: , , , — Nicholas @ 10:17

Kevin Milligan in the Globe and Mail:

The first question to ask of any budget announcement is whether the dollars are recurring or one-time only. If we change a tax that brings in $1-billion a year, the budget changes not just this year but in future years as well. [...] Politicians and commentators often choose the time frame that suits their current argument. Confusion results. A good economist keeps her eye open to these tricks and tries to ensure we compare numbers on similar time-frames.

Next up is properly adjusting future dollars to account for inflation and our ability to pay. Dollars spent in the future are different than dollars spent now. Imagine that inflation averages 2 per cent a year, and inflation-adjusted economic growth is 1.5 per cent a year on top of that. In just 20 years, prices will increase by 50 per cent and the size of our economy — and our ability to pay for programs priced in nominal dollars — will double.

[. . .]

As a final note, it is always useful when crunching the numbers to keep in mind what the Government of Canada actually does with our tax dollars. Transfers to individuals for insurance programs (such as Employment Insurance and Old Age Security) are 25 per cent of spending. Transfers to provinces and territories (health and other transfers) are another 20 per cent. Interest takes a further 11 per cent. The best way to think of the Government of Canada is a big national insurance company with a side business as a tax collector for the provinces. (This is only slightly different from the US Government, which has been called by Ezra Klein an insurance company with a standing army.) Everything else the Government of Canada does — from fisheries management to culture to the military — takes the remaining 44 per cent. Making any change to the trajectory of total spending when insurance and inter-government transfers are both projected to grow rapidly requires very large changes to that residual 44 per cent.

March 25, 2012

Reason.tv: 3 Reasons to End Obamacare Before it Begins!

Filed under: Economics, Government, Health, Law, USA — Tags: , , , , — Nicholas @ 08:36

February 28, 2012

Yet another death due to excessive concern for ‘elf an’ safety issues

Filed under: Britain, Bureaucracy, Government, Health — Tags: , , — Nicholas @ 14:25

Bagehot blogs about the unhealthy results of paying too close attention to the health and safety regulations:

[T]he Mail on Sunday ran an interesting feature this weekend about a different example of what certainly sounded like a health and safety overreaction. It told the tale of a man who drowned in a shallow boating pond in his local park, after suffering an epileptic seizure while feeding swans. A passer-by (a woman who was in charge of a small child so did not dare enter the pond) called the emergency services. But the first firemen to show up announced that they only had Level One training, for ankle-deep water, and needed to wait for a specialist team with Level Two training for chest-deep water. By the time that team arrived, the man had been floating in the pond for 37 minutes. While waiting for that specialist help, the same firemen also strongly urged a policeman not to attempt a rescue in the pond, even refusing to lend the policeman a life-vest. Then the policeman’s control room told him not to enter the water, as the victim had been in the pond so long that it was a body retrieval mission, not a rescue.

The MoS, which sent its reporter out into the same pond equipped with no more than rubber waders, called it a story that “shames Britain”. Certainly its photograph of the eventual retrieval of the poor victim’s body, featuring 25 separate emergency workers, an inflatable tent, several fire engines and a helicopter, is suggestive of an over-reaction after an under-reaction.

It is tempting to conclude that Britain has fallen into a serious problem with regulation, red tape and crippling risk-aversion. Certainly, the newspapers have recently been filled with all manner of depressing stories about pancake races being cancelled, policemen being urged not to pursue criminals onto roof tops, party bunting being outlawed or council workers refusing to mount shoulder-height step ladders to fix broken signs without logistical back-up once reserved for the cleaning of the Sistine Chapel ceiling.

[. . .]

All of which is sensible. You don’t have to be a wild-eyed libertarian to suspect that something has gone wrong with the management of risk in Britain. It is also depressing to see so many advertisements for ambulance-chasing lawyers, urging anyone who has had the smallest accident to sue. Anecdotally, members of parliament grumble about the role played by some insurance companies who hold special advice-sessions on liability for local councils, seeking to terrify them into taking out expensive cover and in the process filling the heads of municipal bosses with all manner of scare stories.

But listening to my rather cautious Jersey host, and reading the MoS report of the pond rescue, I found myself wondering if the British character may not also play a role. Read the report by Lord Young, or even the detail of the admirably comprehensive Mail report, and the rules themselves are sometimes less the problem than their interpretation. It turns out that emergency workers can break all sorts of health and safety rules when lives are at stake, without fear of prosecution, for example. And those guidelines on Level One and Level Two water training were intended for rescuers in fast-moving flood waters, the inquest into the pond case was told.

February 21, 2012

The real problem with forcing employers’ insurance to pay for contraception

Filed under: Government, Health, Liberty, Religion, USA — Tags: , , — Nicholas @ 11:29

At the Adam Smith Institute blog, Tom Clougherty discusses the biggest problem with the current American debate over contraceptives and insurance coverage:

Now, I’m no Rick Santorum. I’m a fan of contraception. But there’s so much wrong with this story that it’s hard to know where to start. Should the government really compel you to buy a service from a private company? It’s probably better than the government nicking your money and providing that service themselves, but for a libertarian it still rankles. Then there’s the insensitivity to deeply-held religious conviction, which not only exposes the ‘liberal’ left’s inability to tolerate social mores that differ from their own, but also highlights the way big government inevitably tramples on diversity and choice with its one-size-fits-all monomania. And then there’s the idiot-economics which suggests that you can force a company to provide a service without anyone having to pay for it. In this case, assuming insurance companies can’t find a way of covertly passing on the cost of contraceptive cover to church-affiliated employers, then everyone else with insurance ends up footing the bills through higher premiums.

But perhaps the biggest problem is the one explained by Sheldon Richman in this Freeman article: contraception has nothing whatsoever to do with insurance.

    Insurance arose as a way for individuals to pool their risk of some low-probability/high-cost misfortune befalling them. It shouldn’t be necessary to point this out, but coming of child-bearing age and choosing to use contraception is not an insurable event. It’s a volitional act. It may have good consequences for the person taking the action and society at large, but it is still a volitional act. It makes no sense to talk about insuring against the eventuality that a particular person will use contraception.

September 2, 2011

US flood insurance is “a veritable bucket of fail”

Filed under: Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 12:12

Felix Salmon on the state of US flood insurance:

Ben Berkowitz has a big report on the the National Flood Insurance Program — something which is a veritable bucket of fail. In a nutshell, it undercuts private insurers and therefore is the only game in town; it insures only a small minority of homeowners; and it loses gobs of money. In September 2005, the NFIP was $1.5 billion in hock to the federal government; that number has now ballooned to $21 billion, and is certain to rise further.

There’s a simple answer to all these problems: let the NFIP raise its rates. And I don’t understand why it’s not being allowed to do so. If the rates rose, then that might allow private insurers into the flood-insurance game, giving consumers a choice and helping to get the word out about how insuring your home against flood damage is a really good idea. The NFIP could become profitable, and thereby start paying back all the money it owes. And while homeowners are quite price sensitive when it comes to flood insurance, the fact is that so few homeowners take out flood insurance right now that the number would be unlikely to fall dramatically if rates went up to a reasonable level.

July 13, 2011

Expanding government-provided flood insurance?

Filed under: Economics, Environment, Government, USA — Tags: , , , , — Nicholas @ 12:42

It has always amazed me that the US government is the primary insurer for flood damage, but the idea of putting the few remaining private insurace companies out of business is insane:

The House of Representatives is scheduled this week, as early as today, to consider an extension and “reform” of the National Flood Insurance Program (NFIP), administered by FEMA. Since Hurricane Katrina in 2005, the NFIP has been about $18 billion in the hole. And this is from a program that only collects around $2 billion a year in premiums, which barely covers losses and expenses in a normal year. So make no mistake, the NFIP is still on course to cost the taxpayer billions more in the future.

Even before Katrina, the Congressional Budget Office estimated that the NFIP was receiving a subsidy of close to a billion dollars a year. Under CBO’s optimistic projections, the House’s reform bill would increase NFIP revenues by about $4 billion over the next ten years, making only a small dent in the program’s current deficit.

If private insurers aren’t willing to offer insurance to people and businesses located on flood plains, isn’t that a strong indication that building a house or a plant on that location is a bad idea? Why should people who chose not to locate in risky locations be forced to subsidize the risk-taking of those who do?

May 20, 2011

Salesmen get rewarded for whoring their wares

Filed under: Europe, Randomness — Tags: , , , — Nicholas @ 09:09

At least, according to this story, the best salesmen at Munich Re were rewarded with whores:

However, this being a German-run orgy, it was not an unseemly free-for-all, but an efficient affair in which the prostitutes “had worn colour-coded arm-bands designating their availability, and the women had their arms stamped after each service rendered”.

Handelsblatt‘s informant told the paper: “After each such encounter the women were stamped on the lower arm in order to keep track of how often each woman was frequented.”

He elaborated: “The women wore red and yellow wrist bands. One lot were hostesses, the others would fulfill your every wish. There were also women with white wrist bands. They were reserved for board members and the very best sales reps.”

This was back in 2007, according to Handelsblatt, a German business publication. I’ve worked at companies where the sales force seemed to be extravagantly over-rewarded with various goodies, but this seems to be a few steps further.

January 10, 2011

Fighting pirates, privately

Filed under: Africa, Economics, Military — Tags: , , , — Nicholas @ 09:42

Strategy Page reports on a new initiative to combat the problem of piracy off the coast of Somalia:

A major British insurer (Jardine Lloyd Thompson) is organizing a private armed escort service for ships operating off Somalia. Called the Convoy Escort Programme (CEP), the 18 small patrol boats will offer armed escort through the Gulf of Aden, and reduce overall security and insurance costs for ships using the service. It’s all about money, as the insurance companies don’t like the spiraling ransom costs, and especially the unpredictability of the pirates. While the insurance companies can pass the costs onto those who buy their insurance, the pirates could rapidly increase the number of ships their steal, and force the insurance companies to incur losses, not to mention the risk of more ships foregoing insurance and using increased shipboard security and armed guards.

The CEP is not a done deal yet. A country has to sign on to allow the patrol boats to fly their flag (and thus provide a national legal system to operate under). The patrol boats will carry heavy machine-guns (12.7mm/.50 cal), armed crews (all former military) and small boats to check suspected pirates. CEP will coordinate with the anti-piracy patrol, and let the larger warships spend more time pursuing the pirates that are now operating much farther from the Somali coast.

This may not be the answer, but it shows that creativity isn’t dead in the insurance industry.

October 5, 2010

I thought this only happened in the bad old days

Filed under: Government, Liberty, Politics, USA — Tags: , , — Nicholas @ 07:49

One of the arguments that used to appear regularly whenever anyone proposed privatizing public services is that “in the bad old days”, when fire departments were run by insurance firms, they’d only put out fires that endangered paying customers. Apparently that sort of thing still happens today:

Imagine your home catches fire but the local fire department won’t respond, then watches it burn. That’s exactly what happened to a local family tonight.

A local neighborhood is furious after firefighters watched as an Obion County, Tennessee, home burned to the ground.

The homeowner, Gene Cranick, said he offered to pay whatever it would take for firefighters to put out the flames, but was told it was too late. They wouldn’t do anything to stop his house from burning.

Terrible, isn’t it? A strong refutation to that whole crazy libertarian notion of privatizing essential services. So which greedy corporation runs the fire service?

Each year, Obion County residents must pay $75 if they want fire protection from the city of South Fulton. But the Cranicks did not pay.

The mayor said if homeowners don’t pay, they’re out of luck.

Interesting.

H/T to BoingBoing, where many of the comments seem to be from folks who didn’t read that it wasn’t a private fire service.

October 3, 2010

Personal responsibility is key

Filed under: Bureaucracy, Europe, Liberty, USA — Tags: , , , , — Nicholas @ 11:41

A post at The Economist looks at the ongoing debate on liberal/libertarian joint concerns:

My colleague noted the other day the discussion Matthew Yglesias has been having with his readers over whether liberals and libertarians can agree on some regulations they both hate. So, here’s a regulation I hate: you’re not allowed to swim across the lake anymore in Massachusetts state parks. You have to stay inside the dinky little waist-deep swimming areas, with their bobbing lines of white buoys. There you are, under a deep blue New England summer sky, the lake laid out like a mirror in front of you and the rocks on the far shore gleaming under a bristling comb of red pine; you plunge in, strike out across the water, and tweet! A parks official blows his whistle and shouts after you. “Sir! Sir! Get back inside the swimming area!” What is this, summer camp? Henry David Thoreau never had to put up with this. It offends the dignity of man and nature. You want to shout, with Andy Samberg: “I’m an adult!

I would gladly join any movement that promised to do away with this sort of nonsense. For example, Philip K. Howard’s organisation “Common Good” works on precisely this agenda. Common Good’s very bugaboo is useless, wasteful legal interference in schools, health care, recreation, and so on. But what you quickly note with many of these issues is that they’re driven by legal liability concerns. You have a snowblader in Colorado suing a resort because she crashed into someone. You have states declining to put up road-hazard signs because the signs prove they knew the hazard was there, which could render them liable for damages. You have the war on children’s playgrounds. The Massachusetts swimming ban, too, is driven by liability concerns. The park officials in Massachusetts aren’t really trying to minimise the risk that you might drown. They’re trying to minimise the risk that you might sue. The problem here, as Mr Howard says, isn’t simply over-regulation as such. It’s a culture of litigiousness and a refusal to accept personal responsibility. When some of the public behave like children, we all get a nanny state.

As Robert Heinlein put it, “The whole principle is wrong; it’s like demanding that grown men live on skimmed milk because the baby can’t eat steak.”

August 25, 2010

Bans on texting while driving have not measurably improved highway safety

Filed under: Bureaucracy, Law, Media, Technology — Tags: , , , , — Nicholas @ 07:34

This report should come as no real surprise to anyone who’s been paying attention:

The two biggest highway-safety issues right now, as far as Washington is concerned, are runaway Toyotas and distracted driving. But what if these aren’t the most important factors driving the nation’s annual highway death toll, which averages about 100 fatalities a day?

That’s the view of Adrian Lund, president of the Insurance Institute for Highway Safety, who says the U.S. Transportation Department, Congress and the media have gotten sidetracked by issues like texting while driving.

“There’s nothing rational about the way we set highway safety priorities,” Mr. Lund says in the Insurance Institute’s Aug. 21 “Status Report” newsletter.

Mr. Lund’s organization is the safety research and advocacy arm of the insurance industry. The IIHS has been critical of the government’s highway safety policies over the past few years, usually arguing that the government wasn’t moving fast enough to require better crash-prevention technology from auto makers.

Mr. Lund and the Insurance Institute also say recent laws banning motorists from using mobile phones behind the wheel don’t correlate with a significant reduction in accidents.

“You’d think from the media coverage, congressional hearings, and the U.S. Department of Transportation’s focus in recent months that separating drivers from their phones would all but solve the public-health problem of crash deaths and injuries,” he wrote. “It won’t.”

September 28, 2009

You know the stories about “they built ‘em better in the old days”?

Filed under: Technology — Tags: , — Nicholas @ 00:13

Here’s an interesting video from the Insurance Institute for Highway Safety (IIHS), pitting a 2009 sedan against a 1959 model at a combined speed of 80 mph:

In the 50 years since US insurers organized the Insurance Institute for Highway Safety, car crashworthiness has improved. Demonstrating this was a crash test conducted on Sept. 9 between a 1959 Chevrolet Bel Air and a 2009 Chevrolet Malibu. In a real-world collision similar to this test, occupants of the new model would fare much better than in the vintage Chevy.

“It was night and day, the difference in occupant protection,” says Institute president Adrian Lund. “What this test shows is that automakers don’t build cars like they used to. They build them better.”

Even with the video evidence, not everyone will be convinced. This is my favourite quote from the Slashdot thread on the topic (I think the comment is offered in an ironic tone):

But then again, back in the 50′s we didn’t need all these fancy crumple zones, seat belts and air bags. Men were real men. Hell, I’ll bet you dollars to donuts any man from the 50′s driving that Bel-Air would have jumped right out of that wreck to help the crying sissy-boy with a cut lip driving that Malibu.

August 15, 2009

QotD: The biggest risk in moving to a single-payer system

Filed under: Health, Quotations — Tags: , , — Nicholas @ 11:05

My objection is primarily, as I’ve said numerous times, that the government will destroy innovation. It will do this by deciding what constitutes an acceptable standard of care, and refusing to fund treatment above that. It will also start controlling prices.

Now, at this point in the discussion, some interlocutor starts chanting what I’ve come to think of as “the mantra”: othercountriesspendlessandhavelongerlifespans. Then they ask me how I can ignore the overwhelming evidence that national health care is superior to our terrible system. Now, what’s odd about this is that all of those countries do precisely what I am concerned about: slap price controls on the inputs, particularly pharmaceuticals. Their overwhelming evidence indicates that I am 100% correct that a government run system in the US will destroy the last really profitable market for drugs and medical technology, and thereby cause the rate of medical innovation to slow to a crawl.

[. . .]

The things that make markets innovate — profit potential — have been mostly squeezed out of the system. The things that hasten market discover — prices — have also been increasingly relegated to central authority. Having something like that in the United States would produce exactly the outcome I’m worried about. So if Matt is right, and this is where the slippery slope ends up, my nightmare will have been realized.

Megan McArdle, “What Does It Mean To Have a Private Health Care System?”, Asymmetrical Information, 2009-08-13

August 12, 2009

QotD: “an abject failure for the Obama administration”

Filed under: Health, Politics, USA — Tags: , , — Nicholas @ 12:34

But who would have thought that the sober, deliberative Barack Obama would have nothing to propose but vague and slippery promises — or that he would so easily cede the leadership clout of the executive branch to a chaotic, rapacious, solipsistic Congress? House Speaker Nancy Pelosi, whom I used to admire for her smooth aplomb under pressure, has clearly gone off the deep end with her bizarre rants about legitimate town-hall protests by American citizens. She is doing grievous damage to the party and should immediately step down.

There is plenty of blame to go around. Obama’s aggressive endorsement of a healthcare plan that does not even exist yet, except in five competing, fluctuating drafts, makes Washington seem like Cloud Cuckoo Land. The president is promoting the most colossal, brazen bait-and-switch operation since the Bush administration snookered the country into invading Iraq with apocalyptic visions of mushroom clouds over American cities.

You can keep your doctor; you can keep your insurance, if you’re happy with it, Obama keeps assuring us in soothing, lullaby tones. Oh, really? And what if my doctor is not the one appointed by the new government medical boards for ruling on my access to tests and specialists? And what if my insurance company goes belly up because of undercutting by its government-bankrolled competitor? Face it: Virtually all nationalized health systems, neither nourished nor updated by profit-driven private investment, eventually lead to rationing.

I just don’t get it. Why the insane rush to pass a bill, any bill, in three weeks? And why such an abject failure by the Obama administration to present the issues to the public in a rational, detailed, informational way? The U.S. is gigantic; many of our states are bigger than whole European nations. The bureaucracy required to institute and manage a nationalized health system here would be Byzantine beyond belief and would vampirically absorb whatever savings Obama thinks could be made. And the transition period would be a nightmare of red tape and mammoth screw-ups, which we can ill afford with a faltering economy.

Camille Paglia, “Obama’s healthcare horror: Heads should roll — beginning with Nancy Pelosi’s!”, Salon.com, 2009-08-12

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