Thursday, February 25, 2010

Difference Between Obamacare and Republican Proposals

Mark Thoma is the owner of Economist's View, a blog that i frequent. He's gotten quite a bit of attention thanks to the success of the blog and now contributes to Marketwatch as a commentator. Recently, he wrote this article comparing Obama's revised health care proposal to Republican proposals. I wrote the following response on his blog:

After reading the article, I see a fundamental difference between Republican proposals and Democrat proposals that Mark Thoma seems to have missed. The proposals favored by Obama and the Dems focus mainly on expanding coverage and establishing a system that will pay for the subsidies that are included with the expansion. Whether a person favors such an expansion along with the taxes and fees that must go along to fund it, is a choice that has no objective right or wrong answer. In my judgment and the judgment of most Americans, this is not reform, certainly it's not the reform we wanted. It is perfectly reasonable to oppose a costly expansion of health benefits and the creation of another social spending program when we face huge liabilities with Medicare and Social Security in the future. If expansion is the "reform" Thoma mentions, then I and the majority of Americans oppose reform.

The Republican plans mostly concentrate on cost reduction. This is the kind of reform I and most Americans had in mind when the health care debate first started. We want more affordable health care, we don't want a new program that will expand coverage to the uninsured, most of which are uninsured by choice or have no legal residence.

The public option is the only proposal by Dems that meet the cost reduction requirement of "reform". I'm not against the public option, but it depends on the details. The public option should not be subsidized or receive government funding beyond what private insurers receive. That is it must operate from the premiums it collects, otherwise it would mix in the expansion of coverage which is opposed. It also must operate under the same rules as private insurers, this shouldn't be hard, Congress can just change the rules for private insurers too if they wish, but for the public option to be a true competitor, it must not receive special advantages.

As an economist, Mark Thoma should realize that a public option with the conditions proposed has very little chance of reducing costs. I'm surprised Mark Thoma dismisses rationing so easily, I think rationing is the best and most effective way to reduce costs. The thesis is that we're paying for health care procedures that either aren't needed (all the tests) or aren't a good value (like giving hip replacement surgery to a terminally ill cancer patient with 6 months on average to live). A medical panel or board is needed to investigate and determine which procedures and medicines offer the best value. Insurance companies will tend by allowed or required to deny care based on those recommendations, I don't any other way that would reduce costs by a major amount. Of course liability would have to be reformed too.

Bottom line is that the administration's definition of reform is something that Americans don't want, an expansion of coverage. It's very reasonable to oppose this kind of reform without obstruction as the main purpose. Simply those who do not believe an expansion of health care services, along with the higher taxes and fees needed to fund such an expansion, is wise or beneficial at this point should oppose reform. Obviously Thoma is not one of those people, but he should not ocnfuse rightful and reasonable opposition due to disagreement with obstruction based on politics.

Wednesday, February 24, 2010

Mass Media Can Flourish

The mass media is alive and well, certain institutions will adapt, others will fail. The Wall Street Journal has increased its circulation. While the New York Times has decreased circulation, total subscription revenue is up thanks to price increases that have more than made up for the loss in subscribers. It seems the successful newspapers are moving away from the ad based revenue model to a subscription model where ads are secondary to the income generated from selling the paper itself. It sucks that the NYT and WSJ are now $2 at news stands in California, but it makes sense that they should charge a price people are willing to pay and that covers their operating costs.

Blogs are popular because they provide analysis of news. Reporting news is no longer as valuable as it was, people now want in-depth coverage and analysis beyond the usual of X did Y. Certain neglected news, local news, is still valuable and small newspapers have to focus on reporting stories that pertain to their local communities and are relevant. More investigative coverage is needed, we still want newspapers and organizations to dig up corruption and shady deals, or expose ridiculous waste. For example it was reported recently that it cost the new California agency that deals with pollution (forgot the name, the Air Quality board or something like that) $6000 to build each and every cubicle for their workers. $6000 is excessive for a single cubicle, the head of the board said the costs included telephone equipment and installation, but $6000 is still excessive for a phone, computer, chair, desk, and cubicle partitions.

In other words, certain organizations will continue to flourish. The Economist Magazine, for example, reported record levels of subscription, even as Time and Newsweek die off. Time had been increasingly dumbing down its coverage and spending too many pages on pop coverage of celebrities and so forth. I like the Economist because it reports on news all around the World, from Africa to Asia, every issue has stories from every populated continent allowing the reader to keep up with events around the world rather than just in the US. Newspapers and magazines should take note and follow along, US based media sources are too focused on domestic events and should be informing readers of what is going on in the rest of the world. It's a small world these days.

Wednesday, February 17, 2010

CO2 Emissions Missing Link to Global Warming

We've continuously increased CO2 emissions without fail for the past 2 centuries, yet it has had no noticeable effect on the temperature measurements collected. We have not seen an acceleration in warming.

Here are the trends and significances for each period:
Period Length Trend
(Degrees C per decade) Significance
1860-1880 21 0.163 Yes
1910-1940 31 0.15 Yes
1975-1998 24 0.166 Yes
1975-2009 35 0.161 Yes

We've had a 150 year period now where CO2 emissions have risen exponentially from 1860 levels. Where is the similar exponential growth in higher temperatures? The fact that we can increase CO2 emissions from 2002 and yet show a drop in temperatures implies that CO2 emissions are not the primary driver of warming, perhaps not even a minor factor. Those who argue for a delayed effect must also answer why we haven't seen such an effect after 150 years. Shouldn't we have seen exponential rises in temperature by now that track CO2 emissions? Why haven't we? These are legitimate questions that need to be answered. More failed models that wrongly predict future temperatures are not what's needed. And consistent with the scientific method, models that have shown themselves to be seriously out-of-line with data time and time again are discredited and new models based on the same old ones receive little regard until they fit in line with data.

It is not the skeptics that are unscientific, it is those who put up these models that have proven themselves to be wrong time and time again. There should be zero weight given to these false models by anyone claiming to be unbiased and scientific, this is the standard approach used in every scientific field from biology to physics.

It is just not understandable how people can continue to claim CO2 is a primary driver when the 150 year data clearly shows otherwise. They have to first explain why they were wrong to be taken seriously, and that's just a first step. Otherwise, the theories that fit in with the data, namely that CO2 is a lagging indicator and is not a primary driver of warming, should be the mainstream established theory that all people and policy makers adhere to.

Avoid Volvo of Santa Monica

My mom's story...

I feel very frustrated and sad due to the stupidity and shameful actions of Volvo of Santa Monica. While I was going home in the evening on December 23, 2008, my Volvo S80 engine started to emit a strange sound that I've never heard before. When I got home, the Volvo warning lights started to go off “Stop Engine” “No Oil”. When I saw this I immediately shut off my engine and the first thing next day, called AAA to tow my car to Volvo of Santa Monica, where I usually gofor repairs. They confirmed what the warning light said, the engine had completely run out of oil, and was in fact damaged and dead.

On October 04, 2008, I had just had maintenance done on my Volvo, and had only driven 3892miles since then. Feeling a bit frustrated at this, I asked one of the employees, Jesse, how could my car have already run out of oil? I told them that they must have made a mistake, and did not refill my engine oil enough, nor did they screw the gasket on well enough. At my home there is a palm sized black stain where I usually park. Jessie responded rudely and threatened to not bring my case to the Volvo factory if it included information on the oil leak. When I looked at the invoices, there was nothing about the oil leak. In fact I suspect that to cover up their mistake, they completely took apart the entire engine, on the grounds of “inspecting what went wrong”, no one can tell if they messed up on the engine now. I have a feeling they even took forged pictures for evidence in case I decided to go against them. The manager Ewald replied that my Volvo is 10 years old, therefore it eats 1 quarter of oil every 800 miles when it gets this old. I never heard of this weird assertion before, and neither has anyone else I talked to. But even if we do go by their logic of the engine eating one quart every 800 miles, it still means I should have been able to drive 5840 miles total without the engine running out of oil, while I only was able to drive 3892 with my engine running out of oil. So I still should have been able to drive 1948 miles, or 33% more even if we go by their calculations. They had to have not put in enough oil or screwed the plug on wrong so the oil leaked out and lied to cover up their mistake. My car is actually only 9 years old, and only about 116,000 miles on it. Before the Volvo S80, I had owned a Volvo 240 DL, which I drove for 14 years, and nothing like this ever occurred, which makes this incident of the engine running out of oil all of a sudden, ludicrous. It was the fault of the Volvo company, and whoever's at fault should pay for it.

I went to talk to Don Marino, the general manager of Volvo of Santa Monica to attempt to get reimbursed. This got me angry glares from Ewald whenever I saw him after, maybe because I didn't go through him first. Anyway, Don Marino made it seem like they were being the good guy, offering a “50% discount” for a final price of a $15000 new engine, however when I inquired about the engine price in another auto-shop, they stated that a new engine only costs $7000. 50% discount? More like a 50% mark up! Not did the Volvo of Santa Monica lie to cover up their mistake and not reimburse me, but they tried to scam me also!

I feel Volvo of Santa Monica didn't lie about the prices just once though. When I said I would just get an used engine because I did not have the funds to buy a new engine at the time, they offered to install it for an original price of $6100, along with a 25% discount to bring it to $4575. Now this seems like they were trying to be nice and reimburse me, but when I checked with other auto repair shops, their regular price without discount was $4500. I feel like they just said they would give me a 25% discount when there wasn't one in reality.

Eventually I bought a 65000 mile used engine, and the people who helped me install the engine was Viking Motors for a installation fee of $4500. After this, my Volvo has not had any engine problems at all.

Thereafter, I kept getting angry glares from Ewald, that his employee Jesse also noticed. I felt indignant, so I tried to continue to persuade Ewald to reimburse me. When they refused, I sued them. During the trial, Ewald blamed me for whatever happened to the Volvo, saying I don't take care of it, and hardly go for maintenance. I believe I take the utmost care of my Volvo that I possibly can—I usually don't even take it to work, only on my spare time, and take it for maintenance regularly, making their statement completely false. They also presented what I suspected were forged pictures of the engine mentioned before (which is actually the first time I saw them) and tried to explain them. They should have showed me these pictures when I asked for a explanation before, which is one of the reasons why I suspect they were forged. We lost the case, but the fact he had the audacity to try and blame everything on me is astounding.

I've driven a Volvo for 23 years in total, and 90% of the time I went back Volvo of Santa Monica to have my car serviced. However, I am astounded to find that they would lie to cover up their mistake and not reimburse me for it. I've given so much business to Volvo of Santa Monica, and the fact that Ewald would throw all those years of business and profits away, and even future profits to refuse to reimburse me even a mere $2500 for a new engine—in my opinion this is extremely stupid. A branch led by a manager like Ewald will hurt the entire company by driving its customers away. I hope that after reading my story, you will stay away from Volvo of Santa Monica.

Climategate's Phil Jones Says No Statistically Significant Global Warming Since 1995

What Phil Jones, former director of CRU at East Anglia states should be noted carefully. For once he doesn't B.S. and so admits what we've known all along (from data) that there has been no statistically significant global warming for the last 15 years and that the Earth has cooled since 2002. Who's in denial? Global warming advocates who continue to pine for something that hasn't shown itself for 15 years. Again, where is the evidence for global warming? Instead of just saying it's there, why don't you listen to Phil Jones?

The BBC's environment analyst Roger Harrabin put questions to Professor Jones, including several gathered from climate sceptics. The questions were put to Professor Jones with the co-operation of UEA's press office.

A - Do you agree that according to the global temperature record used by the IPCC, the rates of global warming from 1860-1880, 1910-1940 and 1975-1998 were identical?

An initial point to make is that in the responses to these questions I've assumed that when you talk about the global temperature record, you mean the record that combines the estimates from land regions with those from the marine regions of the world. CRU produces the land component, with the Met Office Hadley Centre producing the marine component.

Temperature data for the period 1860-1880 are more uncertain, because of sparser coverage, than for later periods in the 20th Century. The 1860-1880 period is also only 21 years in length. As for the two periods 1910-40 and 1975-1998 the warming rates are not statistically significantly different (see numbers below).

I have also included the trend over the period 1975 to 2009, which has a very similar trend to the period 1975-1998.

So, in answer to the question, the warming rates for all 4 periods are similar and not statistically significantly different from each other.

Here are the trends and significances for each period:
Period Length Trend
(Degrees C per decade) Significance
1860-1880 21 0.163 Yes
1910-1940 31 0.15 Yes
1975-1998 24 0.166 Yes
1975-2009 35 0.161 Yes

B - Do you agree that from 1995 to the present there has been no statistically-significant global warming

Yes, but only just. I also calculated the trend for the period 1995 to 2009. This trend (0.12C per decade) is positive, but not significant at the 95% significance level. The positive trend is quite close to the significance level. Achieving statistical significance in scientific terms is much more likely for longer periods, and much less likely for shorter periods.

C - Do you agree that from January 2002 to the present there has been statistically significant global cooling?

No. This period is even shorter than 1995-2009. The trend this time is negative (-0.12C per decade), but this trend is not statistically significant.

N - When scientists say "the debate on climate change is over", what exactly do they mean - and what don't they mean?

It would be supposition on my behalf to know whether all scientists who say the debate is over are saying that for the same reason. I don't believe the vast majority of climate scientists think this. This is not my view. There is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the palaeoclimatic) past as well.

Friday, February 12, 2010

Commentary on Deficit Debate

The issue at hand isn't with the current budget and the huge deficits that may not be possible to cut in this time of crisis. It is with the continuation of these deficits for as far as the eye can see. Furthermore, the administration has attempted to enact additional programs that would be permanent and add to that already endless morass of large deficits. This is what people are concerned about.

There would be no issue if we ran -10%GDP deficits for 3 or so years, but the problems are structural and the current administration and congress refuse to acknowledge or deal with the long term problems that will impact us as soon as more Boomers begin to retire. No one wants to deal with tough issues and choices, but our leaders were elected for that purpose. The country has every right to be pissed, the buck has been passed for long enough, it can no longer be delayed for the next administration to handle.

We don't want to play the blame game. Fine past administrations and congresses put us in this place, but the current crop of officials were elected because we needed change. We needed people who would deal with the buildup of debt and crap and obligations. We didn't elect these officials just so they can whine and continue ignoring the problems of the country like past administrations. We expected real change, and change is difficult. These people who ran on change have failed to be different from the people we wanted to change. Enough excuses, it's time to deal with the situation at hand. Americans do not like whiners in our leadership, they expect decisive actions, not more finger pointing!

The F-22 vs. F-35 Debate And Government Waste

The US has been carrying the cost of defense for both Europe and Japan, the F-35 JSF was developed in order for our allies to share in the costs of defense.

Unfortunately, the defense department is a part of the government and thus, subject to all the waste and stupidity common to government entities. The F-22/F-35 conflict highlights the problem with having multiple goals.

The F-22 is an air-superiority fighter designed to take out tough defenses. With the F-22, there is no need for the F-35 since legacy F-16 fighters would be able to fly in unopposed and above short range SAM systems.

But then our allies wouldn't be able to share in the costs! So F-35 production moves on, but the F-35 is not as good of an air superiority fighter. It can't overcome tough defenses, but it can perform multi-purpose bombing and other roles and is a replacement for the F-16. The main advantage of the F-35 is that it is cheap, or is supposed to be cheap. But with cost overruns, it might cost over $100 million each when it's all said and done, which means POOR VALUE. No surprise that our government cannot get good value for the money.

The F-22 was designed to break stiff enemy air defenses long into the future. F-22 systems have truly no peer in lethality. The F-22 uses extreme altitude, high speed, high quality stealth, and leading edge sensors to kill and survive on its own terms.

What the two USAF leaders don’t understand is that once the F-22 has cleared the huge threats which are enemy long range super surface to air missiles (SAMs) and enemy aircraft, common legacy aircraft can do the rest of the bombing and not get touched by the lesser threats. In other words, current legacy aircraft that are in production now, the F-15, F-16 and F-18 can drop cheap near all weather precision bombs from high altitude and not get touched by shorter range battlefield SAMs, shoulder fired SAMs, anti-aircraft artillery ( “triple A”) and trash fire. “I can touch you, but you can’t touch me”.

Based on this, the USAF has not justified a reason to acquire the F-35. The F-35 is not interchangeable with the F-22. The USAF claiming that it needs an expensive all stealth fighter force isn’t practical.

With its limited funds, the USAF can rebuild its fighter force to meet requirements of expeditionary war and home air defense. This can be done by funding the F-22 to a proper number of aircraft and buying new build F-16s which still contain a significant war fighting capability.

All these issues show why it's so hard for government to get its act together and why it so often wastes money buying stuff that is not a good value. Obama would be lauded as one of the greatest presidents ever if he could only make government get its money's worth when spending.