no third solution » Archive
Inflation and Insurance
I read part of an article in Property & Casualty Insurance News (December 24/31, 2007), the “Top 10 Stories of 2007.” The California wildfires are number 10 on the list. Iin the wake of other mega-catastrophes like hurricane Katrina, the bad publicity surrounding the CA wildfires doesn’t help the reputation that insurers have. Who knows, someday we might even see a class-action suit against P&C insurers in California, exceeding the $3 Quadrillion settlement demanded by some of the Katrina victims. I will take a brief moment to remind my readers that insuring against some of these perils, in certain locations, is actuarially impossible. People respond to incentives. This much is elementary. Legislation however, often with large subsidies, has been crafted in defiance of the laws of probability … Read entire article »
Filed under: Economics Lessons, Rants, Seen and Unseen, Subsidize This!
Massachusetts: The Control Group
[NOTE: I had written this on or about January 25, and for some reason it had been posted as "Private," meaning that nobody could read it. Anyways, here I am about a week late.] In economics, there rarely exists anything even approaching a control group for an experiment. Every so often, however, we’re graced with examples like East and West Germany, or North and South Korea (insert). At the Liberty Papers, Doug Mataconis explains the problem with socialized health care, using Mitt Romney’s Massachusetts plan as an example. Massachusetts’ dalliance in socialized health care is a wonderful control group – side by side with the existing (albeit) imperfect system. And although I’ll be the first to argue that the current market for health care, medical care, medicine, and general … Read entire article »
Filed under: American Politics, Subsidize This!