Tuesday, October 21, 2008

Why We All -- Not Just ACORN -- Are Nuts

I've been reading about ACORN and voter fraud. The right demonizes ACORN for tampering with voter registration records, while the left points out that such tampering matters only when real voters are being purged, not bogus voters being added. This is just one of several incidents (like the Ohio Supreme Court's ruling against the state Republican party last week) that are causing people on both sides to wonder if this year will be another Florida 2000.

What cracks me up about all this is that both sides of the debate accept as a given that we need to register voters in the first place.

I understand the need to regulate elections -- I agree there needs to be a list of eligible voters that the poll workers can authenticate human beings against. But it's 2008 -- why does that list have to be generated through a process as archaic and error-prone as a dedicated paper form?

Can't states just hook up to the IRS or Social Security master database and run a query that says "give me all the legal adults that reside in this state," bounce it off of VICAP or whatever other criminal database can be used to disqualify felons, and boom, done?

You would still need a registrar of voters, because someone would have to have legal responsibility for vetting the list to weed out people not eligible to vote. But that's a much simpler process when the raw list of all possible voters can be generated automatically.

We're obviously still growing into democracy, but "voter registration" as a distinct public-facing process is something we should have outgrown by now.

Tuesday, October 14, 2008

Why Atheism Will Never Be A Major Belief System

I'm an atheist, and although I try to be restrained in my day-to-day personal interactions, I do dream of a world in which this belief system eventually dominates its competition. I'm not very hopeful, though. There is one threshold that any up-and-coming belief system must cross before it can hope to be embraced by a statistically significant percentage of the world's population, and atheism alone, not Islam or Christianity or Judaism or Buddhism (or even Enlightenment values or free-market capitalism or Communism or civil rights or gay rights), has yet to cross it. Atheism will never be a major belief system until it does.

(As an aside, a lot of notable atheists like Richard Dawkins or Sam Harris would probably take issue with me calling atheism a belief system, probably because they're afraid that it will afford enemies the rhetorical trick of equating spiritual faith in God with intellectual faith in the power of science. I can appreciate that concern, but at bottom, their enemies are simply correct on that point. Epistemology has pretty much established that we can't know anything for certain -- the only thing we have to go on in shaping our behavior is our belief system. The fact that we believe in gravity for excellent reasons does not change the fact that we believe in it.)

Anyhoo, here's the critical threshold: No one has ever died for atheism.

People have died for no reason other than their belief in Christ. People have died for no reason other than their belief in homosexual equality. People have died for no reason other than their belief in Communism. But there has yet to be a case where even one person, never mind a large number of people, has been put to death for no reason other than their disbelief in God or any other supernatural creator.

Nothing impresses people more than ideological death. It gives other believers something concrete to rally around, to whip the base into action. It generates public sympathy for the believers (not so much in the case of deliberate martyrdom, but certainly in the case of hate crimes, which are nearly as good). In economic terms, it allows a belief system to accumulate emotional capital through public and private investment. Like it or not, it is a non-negotiable precondition for ideological maturity and large-scale market penetration.

This presents a problem, because atheism is the one belief system that explicitly discredits martyrdom as one of its tenets. Those who believe it are the least likely of all people to be enticed by rewards in the afterlife. ("72 copies of Religulous and The Selfish Gene await you in heaven!")

This puts me in an awkward position, because while I certainly hope no atheist ever dies solely because of his atheism, I also can't help but acknowledge how helpful such an occurrence would be to the movement as a whole.

On some level human beings recognize that if an idea is worth repressing, there must be something to it. Despite how some atheists may feel about prevailing social attitudes toward them (and there is a sizeable body of literature out there that can be reduced to "I'm an atheist, woe is me"), what we experience is merely mild distaste or faint bewilderment -- nothing that remotely approaches repression.

The closest thing to repression that atheists experience in this country is the realization that no honest one among them will ever win public office. Unfortunately, humanity doesn't measure repression in political opportunity cost -- we measure it in blood.

Saturday, October 11, 2008

Healthcare and the Art of Motorcycle Maintenance

I used to be in favor of universal healthcare. Now I'm for it in principle (i.e. I am in favor of making changes that would drastically expand the availability of healthcare), but against how most of its supporters propose going about it.

The solution requiring the least thought is to simply mandate that everyone have health insurance. But this presupposes that insurance is the best model for financing healthcare. It isn't. To see why it's not, look at car insurance.

Cars are similar to human bodies in several ways, yet the insurance industries that govern their care react to those shared characteristics very differently. Cars and human bodies both require maintenance for the duration of their operational lives. Cars and human bodies are both vulnerable to accidents and other infrequent, expensive, unforseen sources of damage.

Insurance is a mechanism for blunting the impact of infrequent, expensive, unforseen events. Maintenance is not infrequent, not unforseen, and usually not expensive (at least not in comparison to accidents). Insurance is not a sensible means to finance maintenance.

Car insurance has the correct relationship to automotive care, because it handles only the accidental half -- the infrequent, expensive, unforseen half. It leaves the maintenance half in the hands of the free market. (Imagine if it were otherwise: To get an oil change, you'd have to visit your Primary Care Mechanic, chosen from an insurance-approved directory of mechanics, and hand him your insurance card and a $15 copay. And your car insurance premiums would be at least three times what they are now.)

Insurance works by pooling risk. In order for it to work, the risk must be low enough that most members of the pool will not actually suffer the fruition of that risk. But the "risk" of maintenance is high -- it's guaranteed that every member will suffer from its fruition. Therefore pooling the maintenance risk doesn't help anyone except the insurance company; in theory, the premiums required to finance such pooling are guaranteed to at least equal, if not exceed, the cost that pool member would pay to obtain the same maintenance on the open market.

Here is where the analogy between cars and human bodies breaks down. If the maintenance of human bodies were handled by the free market in the same way as the maintenance of cars, the prices would be extraordinarily higher. This is the only reason the square peg of the insurance model has been pounded into the round hole of healthcare maintenance: the free-market costs of the maintenance are so high that, despite the theory, even exorbitant premiums still end up being cheaper. Releasing health care maintenance to the free market would essentially eliminate that market, as providers priced themselves beyond their prospective consumers' reach.

I believe the correct implementation of universal healthcare is not to expand the inefficient and ill-fitting pooling of "risk" (risk whose likelihood is much closer to 100% than to 0%) offered by insurance, but rather to lower cost to the point that healthcare maintenance can actually survive on the open market.

So, why is the maintenance cost for human bodies so much higher than for cars? Supply and demand. The supply of maintenance expertise is much more plentiful for cars than it is for human bodies. This is because there is no stratification of knowledge for medicine the way there is for car care. Certainly it requires highly paid, highly educated engineers to design cars, but you don't need one of them to rotate your tires or check an air filter. There exists an entire stratum of providers of medium-to-low automotive expertise that suffices for the vast majority of maintenance needs. In medicine, by contrast, even the lowliest neighborhood general practitioner has a college education that was at least as extensive and costly as the education received by the car-designing engineer. The costs of medical education are so high that they must necessarily (a) heighten the medical barrier-to-entry, constricting the flow of new doctors into the market, and (b) be passed on to the patients so the doctors who do make it into the market can hope to make a profit despite the vicious monkey of student loans perched menacingly and omnipresently on their backs.

Not only is medical expertise in shorter supply than automotive expertise, but it is also in higher demand. The owner of a car always has a choice before paying for maintenance. Frequently owners would rather let their car die and purchase another one than undertake some expensive maintenance operation. Such a choice rarely exists for the owners of human bodies. We each get only one body; the decision of whether to seek maintenance for it at all has already been made, in the affirmative, from the getgo. And no one can decide to eschew the whole owning-a-body nonsense by always riding a bike or taking the subway.

In order for healthcare to be made market-ready, steps must be taken to increase the supply of medical expertise and lower its demand.

Insurance companies must be given credit for recognizing the second half of that statement. Many insurance companies now operate incentive plans that attach financial reward (in the form of premium reductions or rebates) to habits that promote good health, like walking more, joining a gym, or quitting smoking. These are a good idea, but they don't go far enough. I believe that the Surgeon General, the Food and Drug Administration, the National Institute of Health, the American Medical Association, and the Center for Disease Control should collaborate to produce a measurable definition of what it means to be healthy, sufficiently rigorous and concise that it can be used as a legal standard. Anyone who wants to can submit to a test administered by their doctor that determines whether they meet this standard, and if they do, the doctor issues them a legal certificate that can be redeemed for a nontrivial income tax break.

Unfortunately, the insurance companies do not seem interested in tackling the other side of the problem, increasing the supply of medical expertise. This is because the insurance companies currently find themselves in a position analogous to the Department of Defense. Both use the legitimate importance of their missions to accumulate way more wealth than even those missions deserve, and inject that money into a tiny market of high-expertise vendors. Doctors and hospitals are the high-priced defense contractors of healthcare, and insurance companies are the bureaucratic, insular Pentagons that pay their exorbitant fees.

I believe the solution to increasing the supply of medical expertise is simple: someone should completely subsidize the cost of all medical education. Tuition, books, housing, everything. Anyone who wants to pursue an M.D. should be able to do so 100% free of charge.

I say "someone" not because I'm a whackjob liberal who likes it when mysterious fairies wave wands that magically take care of real-world concerns. I say it because it wouldn't necessarily have to be the government that does the subsidizing. Even large corporate employers are getting tired of the insurance model of healthcare finance. It might well prove cheaper for them in the long run to jettison their insurance fees in favor of voluntarily contributing to a private nonprofit consortium (that, for tax purposes, would count as a charitable donation) that subsidizes medical education without any government involvement.

It would be hard to maintain the current high price of healthcare if there were ten times as many doctors available as there are now, all equally as competent and qualified as the current population of doctors (and none with student loans). This proliferation of private medical practices would also force down the cost of niche pieces of high-tech medical equipment. MRI machines cost $2 million each not because they run on plutonium or need to withstand atmospheric reentry from space, but because their manufacturers know in advance that they'll have only 1,000 prospective buyers per year. If that market expanded to tens or even hundreds of thousands, manufacturers would gladly lower their prices to ensure dominance of the newly expanded market.

None of this is to say that the insurance model should be dismantled for healthcare "accidents" -- cancer, Alzheimer's, Lou Gehrig's disease, multiple sclerosis, etc. These are all infrequent, expensive, unforseen things that fit well with the pooling of risk. But if those were the only things covered by health insurance, premiums would necessarily go down.

Government intervention is bad for healthy markets, but the healthcare market is anything but healthy. The way to make it well again is by throwing more doctors -- not bureaucrats, either government or corporate -- at the problem.

The Defense of Traditional Marriage

I live in Connecticut, which just became the third state in the Union to legalize gay marriage. Already the homophobes are mobilizing to amend the state constitution to ban such marriages, as they have already done in 27 other states.

The opponents of gay marriage don't like to be called homophobes. They insist they aren't, that theirs is a more nuanced position derived from their concerns that marriage, the fundamental building block of civilization, is being dismantled and marginalized.

I'm not an entirely unreasonable person. I too think it is cause for concern if a fundamental building block of civilization is dismantled and marginalized. So, let's take the "defense of traditional marriage" crowd at face value for a moment.

Here's a quote from an article about Traditional Marriage Defense (TMD) on the website of James Dobson's Focus on the Family:

Family is the fundamental building block of all human civilizations, and marriage is the foundation of the family. The institution of marriage is unquestionably good for individuals and society, and the health of our culture is intimately linked to the health and well-being of marriage. Unfortunately, the standard of lifelong, traditional marriage as the foundation of family life in our nation is under attack.

Battered by high rates of divorce and cohabitation, unwed child-bearing and the push for so-called same-sex "marriage" and civil unions, marriage is in a state of crisis. Recent cultural changes without historical precedent have influenced an increasing number of Americans to view this fundamental institution as optional, disposable and open to redefinition. In this context of marital decline, political and ideological battles rage between those who view marriage as a transient human invention –- ready for updating and revision -– and those who regard marriage as natural and fundamental to humanity – essential to a flourishing civilization. [emphasis mine]

This doesn't seem so unreasonable to me. At least it acknowledges that there are other threats to traditional marriage besides just gay marriage. However, this quote came from the "Overview" section of the article. Check out this line from the "Talking Points" section of the same article:

Only a federal amendment to the U.S. Constitution can fully defend the institution of marriage: protecting states from having same-sex marriage imposed upon them by the federal judiciary. [emphasis mine]

Purely from a Constitutional perspective, this violates one of the ostensible precepts of conservatism, i.e. sovereignty of the states. They claim the threat comes from "the federal judiciary," yet all three of the states that have allowed gay marriage have done so by exercising their own sovereign right to govern themselves, which is exactly what a careless reading of the above sentence will lead one to believe they are arguing for. It was Connecticut's own Supreme Court, not the federal Supreme Court, that rendered this ruling.

But putting that aside for a moment, the more revealing lapse of logic is in the bolded portion: marriage will be fully defended by banning gay marriage. What about the more even-handed list of threats outlined in the overview?

The funny thing is that if you were to produce a ranked list of legitimate threats to the sanctity of traditional marriage, the #1 entry would be something that receives no mention in the entirety of Focus on the Family's whitepaper: marital infidelity. I can see how some could interpret, say, premarital cohabitation as an affront to the tradition of marriage, but even the most ardent anti-gay-marriage activist would have to concede that marital infidelity is a far more serious impugning of that institution's sanctity. Also, it's ubiquitous: for every gay couple that wants to marry, there are dozens of straight husbands and wives who are already busy cheating on their spouses.

So to me, this is proof that despite their claims of noble intentions, despite their professed concern for the perpetuation of civilization as we know it, the TMD crowd really are just a bunch of homophobes. If they were legitimately concerned with TMD, they would be pushing for a federal constitutional amendment to outlaw infidelity within existing marriages, since that is demonstrably the largest threat to the sanctity of traditional marriage. But instead they just keep up their incoherent yodeling about Adam and Steve.

P.S. Bonus Trivia Question: I wonder how many straight married people who are against gay marriage are also involved in an extramarital affair?

Do We Really Need Balance?

So first there was my favorite Jonathan Haidt video, which argued that liberals and conservatives are equally necessary for the perpetuation of civilization. Then there's an L. A. Times article that says political attitudes are largely determined through genetics, and that "for the species to survive, you need both" liberals and conservatives.

The research seems to point in the direction of balance -- you need to balance risk-taking and new ideas against caution and a desire for order and stability. As long as the two stay in balance, civilization flourishes.

At first this sounded great. But then it occurred to me: what exactly are the consequences of this balance disappearing? I can think of several civilizations that descended into ruin when the balance tipped too far in favor of conservatism, but I can't think of any that have done so when the balance tipped too far in favor of liberalism. (And before you start mentioning failed communist states, remember, we're talking about social issues here, not economic -- the USSR may have been communist, but they were just as repressive on social issues as our own Sarah Palin.)

I don't doubt the research that is leading scientists to reach these conclusions, but I do wonder about the conclusions themselves. They seem to invest almost too much wisdom into natural selection; "this balance exists because it confers an evolutionary benefit to the species as a whole." Perhaps.

But what if the original natural state of humanity was conservatism, and liberalism was a mutation that has taken a comparatively long time to reach its current level of penetration into the species? Another recent scientific study has shown that conservatives reproduce at much higher rates, on average, than do liberals. Since the research seems to demonstrate that the very concepts of liberalism and conservatism have been baked into our innate makeup for nearly as long as we've been on the planet, it is not unreasonable to extrapolate that disparity in breeding rates back to near the beginning of our species' history. If that's the case, it would explain why reaching a global mindshare roughly equal to that of conservatism has taken an amount of time so utterly disproportionate to the benefit and utility that liberalism conveys to the civilizations it inhabits.

I realize I just lost all (two) of my conservative readers with that conjecture, but remember, it's only conjecture; I'm not sure I believe it either. I'm just trying to do good science and propose an alternate hypothesis that explains the observed results. But why am I defending myself to you? You conservatives now have a homework assignment: produce a single nation, tribe, culture, empire, or other unit of civilization that descended into ruin because its pendulum of social attitude swung too far to the left. If I pass out holding my breath, someone please call an ambulance.

Friday, October 10, 2008

Whither PMI?

The favorite talking point on right-wing radio has been that this whole financial mess is the fault of Democrats. It is true that Democrats have been staunch defenders of Freddie Mac and Fannie Mae compared to Republicans. It is also true that the Clinton Administration's passage of the Community Reinvestment Act in 1992 forced mortgage lenders to issue loans to higher-risk, lower-income borrowers than they would otherwise prefer. Both of these set the economy up for a run of defaulted loans.

If this were the only side of the story worth telling, then the current crisis would have manifested solely as an insurance collapse, not an investment banking collapse. The other side of the story worth telling is how this event disrupted the investment banking market so quickly and effectively.

(There may still be an insurance collapse, but it will take longer to become visible than the investment banking collapse, because of the reinsurance shell game -- insurance companies taking out policies from other insurance companies to cover their losses in the event that some external circumstance forces them to pay out more claims against their own policies than their actuaries predicted would occur. AIG was the first domino to fall, but I'm sure its shockwaves are invisibly propagating through the reinsurance community as we speak.)

Why all this focus on insurance? Because I have yet to hear a single pundit, politician, or self-proclaimed economic expert mention PMI. It is standard banking practice to attach mortgage insurance to any loan for which the borrower hasn't put down 20% or more of the purchase price. The borrower pays the premium (factored into his amortized payment schedule) for a policy that indemnifies the lender in the event that the borrower defaults on the loan. The Community Reinvestment Act may have artificially expanded the mortgage lending market into brackets of lower income and higher risk, but it did not preclude those lenders from continuing their established practice of insuring those risky loans with PMI.

A spike in loan defaults from low-income, high-risk borrowers shouldn't hurt the lenders -- because by definition, those are the loans for which they would have required PMI from the getgo. It would just translate into a spike in mortgage insurance claims. But barely anybody is talking about insurance in this mess; it's all about the investment banks.

I view this as proof that CDOs really are the problem. If a CDO is based on 10 underlying mortgages, all of which go bad, but all of which are covered with PMI, then the underlying lenders will recoup their loss, but none of that insurance payout will go to the holders of the CDO. Banks are failing not because their mortgages went bad, but because they invested en masse in CDOs that were not entitled to the PMI payouts of those bad mortgages.

The legislation that allowed CDOs to be created was the Gramm-Leach-Bliley Act, a Republican-championed bill that was passed seven years after Clinton's Community Reinvestment Act. (For those irrational Clinton-haters among you, yes, Clinton did sign both bills -- ironically, a decision he continues to defend even in light of the subprime mess.)

So here's what I want to know. I want some statistics:

(a) percentage of defaulted loans that would not have been made had the Community Reinvestment Act never been passed
(b) percentage of defaulted loans that had PMI
(c) percentage of defaulted loans that had been repackaged into CDOs
(d) percentage of overlap between groups (a), (b), and (c)

If it turns out that the overlap between (b) and (c) is low, that would disprove my conjecture, as would (c) being any lower than 90%. If (b) is anything less than 90%, then the banks have fucked up on an even more fundamental level than we've been led to believe up to this point.

Everybody has been making the general prediction that the economy is going to continue getting worse over the next year or two. I'm going to make a specific sub-prediction: that, just when it seems like the investment banks are finally getting their shit together, we'll see the same thing happen with the insurance business. The reinsurance market is the other shell game that will prove unsustainable under these conditions.

Thursday, October 9, 2008

The NRA... Remember Them?

One of my favorite issues that has fallen very far out of favor from the public discourse is gun control. I was a card-carrying member of the National Rifle Association for a year, although it was more a statement of principle than a sign of a fervent love for firearms, which I've used several times before, but never actually owned. I support the Second Amendment and think it's just as important (although not more important) as the First Amendment, but I'm much more reliant on the protections of the First in my day-to-day life.

In this election, if people were to make a ranked list of the issues that matter most to them, gun control would be at, or very near, the bottom of the list. (Think about it: people talk about affirmative action and the privatization of Social Security more than gun control these days.)

A lone voice in the wilderness, Richard Feldman has published a piece about the NRA and Obama.