Beast

March 27th, 2010

Beast Screenshot Beast Screenshot

A remake of a 1984 game with the same title, Beast is a game of strategy and speed for 1 or 2 players. Squish or trap beasts, crush eggs before they hatch into stronger beasts and avoid dangerous blocks.

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It struck me quite suddenly how the sub-prime lending meltdown with all the associated money madness that nearly caused a market meltdown resulting in bailouts that angered most and a recession that’s hurt many, is connected to Health Care.

Many years ago (30 if you believe some stories), the government decided it wasn’t fair that certain people couldn’t afford to buy a house. After all, it is the American Dream. Someone probably even mentioned it was “a right” to own your own home.

Naturally, the government had to do something. So it forced banks to lend money to people who were at high risk of not paying them back, people who had little or no money for a down payment, no collateral, etc. These people would lose little more than their credit rating if they simply walked away and paid nothing back to the banks.

To manage the risk financial institutions were forced to take on these mortgages, they came up with all the monkey business we’ve heard about. The assumption was that by grouping high risk mortgages together and buying securities (credit default swap, etc.) on them, they could sell them around and reduce their individual risk.

This was all well and good until the risky mortgages started to show why they were risky. So many people were defaulting on their loans, some because they couldn’t afford them, others because they were totally irresponsible, more yet because they were convinced they could afford them. The result of all that buying and selling of bundled debt and securities on that debt was lower individual risk, but unacceptably high systemic risk.

So it all fell apart and only ridiculously large sums of money from governments around the world kept the economy from collapsing (or so we’re told).

So goes Health Insurance (not the same as Health Care). Health Insurance is a bet. When you buy health insurance, you’re betting you’ll get sick. The insurer is betting against you. If you get sick, you win the bet and the insurance company pays. If you don’t get sick, the insurance company wins and you pay (your premium).

Insurance companies disallow preexisting conditions because it isn’t a fair bet. If you’re betting you’ll get sick when you’re already sick, that’s cheating. There’s probably ways the insurance companies take advantage of this rule, unfairly excluding people, particularly those who were cut off of their insurance just when they got sick, but that’s not the issue here.

Each bet insurance companies make is a risk. They try to balance the risk by charging appropriate premiums so they can pay out potential insurance claims, pay their employees, and make a profit in the process, which is the whole point of running a business. Decent profits allow them to grow and expand coverage and make more policies. Exorbitant profits should show consumers they don’t play fair (or possibly are just winning a lot of bets at the moment).

Once again however, the government has stepped in saying “it’s not fair.” This time, it’s not fair that people can’t afford insurance or are being excluded for preexisting conditions, etc. Instead of changing the rules so valid preexisting conditions are covered while others may still not be, the government has simply said, “Insurance companies can’t deny coverage based on preexisting conditions.” Or essentially, “Insurance companies have to cover everyone, or else.”

Insurance companies will essentially be forced to take on excessive risk, resulting in much more money going out in claims, so more money must come in.

“That’s okay,” the government says. “Everybody must buy insurance, or else.” This the government says so insurance companies have a chance at balancing risk. If healthy young people have to buy insurance, it’ll help pay for the older or sicker people to get health care, instead of simply waiting until they’re old and sick to get insurance.

Sounds like a win for everyone, right? Possibly. If all the rules are written just right, it might balance risk well enough to allow insurance companies to continue operating in the long term. But if there’s anything wrong with the rules, risk will be unbalanced and we’ll be headed for a health insurance crisis on the scale of the sub-prime mortgage fiasco.

Further, mandating that everyone buy insurance is outright unconstitutional. I buy insurance. I like having insurance. But I don’t think the government has the right to mandate that I do so. I’ve heard all the arguments and they fall flat. Car insurance is not required, unless you want to drive on public roads. Regulating commerce is not the same as mandating that commerce take place. Promoting the general welfare is not the same as mandating the purchase of a commodity.

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I hear a lot of argument about whether or not the proposed Health Care Reform bill will be deficit neutral. Proponents of the bill claim it will be deficit neutral by means of taking money from other areas of spending, reducing fraud, and raising taxes. Opponents claim it won’t be, pointing out that three or four years of taxes will be collected before any benefits are paid (as if that’s proof against deficit neutrality), claim some of the money is double counted, and that reducing fraud won’t work (or they’d already be doing it).

The truth of the matter is no one knows. We can put our best people and their best calculations on solving the question, but even if they decide that after all the money wrangling involved in the bill, it comes out to be deficit neutral – or even better, reduces the deficit – it isn’t good enough.

What we should be worried about is whether the bill will reduce our health care liability. By liability, I mean the amount we, the government, and we, the people, spend on health care each year. If all the bill is doing is throwing more money at the problem, that’s not a solution, it actually worsens the problem.

Allow me to explain. The government, like each of us has a limited capacity to earn money. We do it by working at our various occupations, the government does it mostly through taxation. In our case, there’s only so high a salary the market will bare. The better we are at our jobs, more experience, etc. the more the market tends to bare. The worse or less experienced, the lower the salary.

Taxation follows a different set of rules, but it still has rules. The Laffer Curve is one representation of those rules. Summarized, it goes like this: If the government wants to increase revenue, it can do so by raising taxes, so long as it is on the left side of the curve. Once it passes the peak, raising taxes any further will tend to reduce revenue. This is due in part to those people and companies that are taxed the most will start moving to where taxes are lower, or finding loopholes in tax laws that allow them to pay less, when the tax rates start to get too high. It is also because taxes are a drain on the economy. Drain too much at one time and the economy as a whole suffers, resulting in lower tax revenue for even higher tax rates.

I don’t know where we currently sit on the curve, so raising taxes might still be a reasonable thing to do. But if we raise taxes now to pay for supposed Health Care Reform, if the reform doesn’t also include real and credible methods of “bending the cost curve” downward, more taxes will eventually have to be raised again and again to keep the program “deficit neutral” until we pass the peak point on the curve and start to head down the back of it.

The only thing I’ve heard about this bill’s effort to actually reduce costs has to do with two things. First, I hear payments to doctors from the government will most likely be reduced further for government plans such as Medicare. This isn’t reducing the cost of health care, it’s cheating doctors and patients on other insurance plans. Those costs that aren’t paid by the government are subsidized by other patients who are charged more for their services. This essentially helps drive up the cost of health care for those of us not on a government plan.

Second, they propose that by getting more people insured, the cost of insurance will go down. This isn’t necessarily true. Without an individual mandate to purchase health insurance (which many believe is unconstitutional, myself included), there is no reason an otherwise healthy person would buy health insurance. By disallowing preexisting conditions as grounds for denying insurability of a person, people will be allowed to buy insurance when they get sick. In other words, healthy people won’t buy insurance, but sick people will. Sick people then will need coverage, something more expensive than their premiums so insurance companies will either go bankrupt, or raise their premiums more.

If anyone knows how else this bill is supposed to actually reduce the cost of health care, I’d sure love to know. The above two points don’t even address the cost of health care itself, just of health insurance. Either they love to conflate the two, or they don’t understand the difference between them. Health care costs are the costs of doctors, facilities, medical supplies and pharmaceuticals. Health insurance costs are the payments we make to a third party as part of a contract that if we need medical care, they’ll pay a predetermined type and portion of the costs.

The real problem isn’t that health insurance costs are skyrocketing, it’s that medical care costs are skyrocketing. We can weep and wail and gnash our teeth about insurance companies making profits, and there’s real legislation we might pass to mitigate that “problem” without directly penalizing them for being successful capitalists, but it’s still not addressing medical costs.

What health care reform needs rather than more money thrown at it (not that money won’t or can’t help), is actual reform. We must do something to control the costs of health care, not insurance. If we open up the insurance market, the market will take care of the insurance costs, but only if we do something about the real problem.

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A Few Words on Gravity

March 12th, 2010

One regularly used and specious counterargument to the objection that a scientific theory is “just a theory” is to point out that gravity is also “just a theory.”. The implication (sometimes explicitly stated) is that since no one would doubt that gravity exists, no one should doubt whatever other theory is being considered.

I say the counterargument is specious for good reason. Gravity is a fact. There is a phenomenon we call “gravity.” The “Theory of Gravity” however is science’s attempt to describe the phenomenon in a quantifiable manner, ie with a model. Over the course of history, science has developed many models for gravity. Each one has in time been proven to be either wrong, or incomplete. The current Theory of Gravity describes gravity accurately so far as we can tell, but one would be foolish to rule out a future advancement that might revolutionize our understanding of gravity.

For example, we observe strange and unexpected gravitation in the universe at large. We don’t have a good explanation for this behavior as of yet, but many have posited “dark matter” or “dark energy” is involved, to make the current gravity models fit.

Meanwhile, we have a good working model for gravity. A large body of experimental data has been shown to agree with predictions the current gravity model makes. In particular, ie. there was a bunch of data that the model had to describe/fit initially, and the model has since accurately predicted future data. For example, if you drop any weight of any shape in a vacuum, shoot a satellite into space, or anything else where gravity is concerned, the model predicts the outcome with a high degree of accuracy. Any lack of accuracy we might observe between the prediction of the model and the outcome of events is generally from other forces involved, such as air resistance.

So, we see that while “gravity is just a theory” it is a pretty good one. The model fits past data very well, one might say perfectly within margins of measurement errors. But more importantly, it accurately predicts future data, such as outcomes of experiments done by physics students do an equal degree of accuracy.

This is vastly different from most of the theories that gravity is compared to in argument. Climate change/global warming for example has no model that is able to make such accurate predictions. It does have a model that fits existing/old data to a degree of accuracy (not as good as the gravity model). But so do many competing climate models. In fact, other models are better able to predict future data. The model itself doesn’t prove or disprove the theory behind it, but the lack of a good, reliable model does place the theory on a completely different plane from that of gravity. One that is much lower and subject to skepticism.

So, please. Stop comparing things to gravity just because both are called “theories.” There is no relation between them beside the fact that the models for each of them might be wrong. It just turns thinking individuals off from your argument. Instead, if the “theory” has merits, discuss them.

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Any scientific subject, once sufficiently politicized, warrants skepticism, particularly by those who philosophically oppose, or disagree with those who willingly, recklessly, and religiously embrace it. Skepticism is even more warranted when politicians, not scientists are making all the arguments. Particularly since everything in politics seems to be a means to an end.

Now by “skepticism” I don’t mean to say we must deny or prove false the science in question, but we must carefully examine the science, scientific process used, and especially those scientists involved in it to make sure the matter is in fact scientifically supported or whether it is partially or wholly false or at least not certain.

One blog I read is written by a Statistician, William M. Briggs who regularly comments on the science, and particularly the math and statistics of the Anthropogenic Global Warming (AGW) theory that is so often touted as “settled science.” There are several points which he grants the AGW side is accurate. Firstly, it is clear that we humans have an impact on our environment, and that impact can be both positive and negative depending on our behaviors and the scale of them. Second, it is well known that we pump loads of CO2 into the atmosphere each year and we have every reason to believe that CO2 is a global warming gas (if that’s not actually proven beyond doubt, there’s very good evidence for it).

The point where he debates that AGW is at least “not settled” if not so wrong it needs to go back to the chalk board, is in their models. According to our statistician, and common sense, any good model should do two things well. Number one, it should accurately model, or fit existing data upon which it is built. Number two, it should accurately predict future data, or data not yet in the model and disjoint from the data already in the model.

So far, again according to Mr. Briggs, the AGW models have succeeded at the first requirement, but failed at the second. Does this mean (ie. prove) that AGW is false? No. It does however mean that the science is not only “not settled” but has a lot of work to do before it is.

Mr. Briggs further argues that there are other models for climate that also fit past data and actually do a better job of predicting future data. Does that mean these other (non-global warming) models are correct? No. The wonderful thing about models in this debate is they don’t really prove anything. Yes, a model that accurately predicts future data is compelling and useful, but it is not proof. And the failure of a model to predict future data devalues the model, but doesn’t prove the theory false either.

Mr. Briggs is the first to admit he might be wrong and AGW might be as true as anything. But he makes the point many times that the scientific process is flawed to the extent that the scientists involved are flawed, and that any number of biases, errors, or mistakes resulting from individual or collections of scientists could be present and probably are. In answer to the objection that the science is “peer reviewed” he often brings up studies or articles that were also peer reviewed that are either meaningless, ridiculously flawed, or blatantly wrong.

Again, none of this means that AGW isn’t happening exactly as the scientists say, when the models aren’t predicting the new data accurately, scientists refuse to examine themselves, their own biases or their process of peer review, there is plenty of reason for skepticism.

Furthermore, when politicians pick up any topic of science, I almost have to add the “so-called” prefix to the word “science.” Politicians are smart, smart people – they somehow convince the voting public that they’re better than the alternatives, so we vote for them. They do this by argument, debate, and rhetoric. Mostly, lately they do it by promises, smears of opponents, flattering blocks of voters, and a never ending series of logical fallacies. In this political arena, science is often held up as the great light of reason and truth amid the quagmire of lies, propaganda, and maneuvering that is so prevalent in politics. In this struggle for power, whenever a politician (or political party) sees something in science that might help them gain favor, power, or influence, what reason do they have for not holding onto it?

Now, if both sides immediately sees the value and truth of that science, there’s no political gain to be had, everyone just nods and says “yep that’s how it is” and moves on. Occasionally there’ll be a propaganda war or smears that the other side doesn’t value the particular science, but that ends pretty quickly as the public comes to understand the positions of the sides are actually equal.

But if one side or the other looks at the science and sees a problem with it, or at least that it might not be true (science is always wrong, until it’s right), the side that embraces it can use that opportunity to gain power and influence, while at the same time belittling and smearing opponents. I can think of a number of examples that I will go into later if there’s interest.

This is exactly what has happened with AGW, the democrats have latched onto AGW and republicans have been mostly skeptical. For this democrats have smeared republicans as “deniers” putting them on the level of Holocaust deniers, implicitly and explicitly. This is not unexpected. If republicans had latched onto some bit of science that could change the world, and democrats resisted it, I’m sure mud would be slinging in the opposite direction.

The key points I’m getting at are: 1) Skepticism is both a healthy and necessary part of science 2) Skepticism is not “denying” truth 3) Politics muddies science 4) Science isn’t perfect 5) No one should believe in an aspect of science because politicians say it’s so (or actors or people standing to gain lots of money, etc. – they’re all politicians too even if not in public office).

Mr. Briggs makes very good arguments for all of my points (although imperfect ones in some cases). Again, AGW may actually be happening. That’s what skepticism is: saying “I’m not so sure” rather than “that’s not true”. Yes there are people who believe AGW is false, some rationally, others irrationally. Also, there are those who believe AGW is true, some rationally, others irrationally. I’m not talking about them. I’m talking about skeptics. And anyone who would demean a skeptic of any science, particularly one that is far from proven (“scientific consensus” isn’t proof), would also demean the scientific process.

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When I was a child it was always a big deal for my family to see a movie. Unless one was showing on television, we didn’t often rent movies and even less frequently go see one in the theater. When we did then, it was a special experience.

I don’t know if it was this, the novelty of movies, or their big budgets resulting in stronger performances, better visual effects and music, or perhaps my limited attention span (being only a child), but I found myself gravitating towards movies quite preferentially when given the choice between them and regular television, more especially when given the choice between them and books.

Perhaps it was well then that my parents rationed movies. I may never have read anything or come to appreciate books the way I do now. You see, as I get older I find my attention span is much longer than it was years ago. The result is an increased appreciation for long running television shows with continuous narratives (not like The Simpsons where each episode is essentially stand alone), and even more so for long book series.

Even as recent as three years ago (before the kids were born) I appreciated a good movie. Sometime between when they were born the last six months or so, I find I can’t even enjoy a book that’s under 350 pages, unless there’s at least one sequel. I suppose the reason for this is that I enjoy a long narrative. A good movie may introduce an interesting universe, problem, cast of characters, and more, but it has to resolve everything in under two hours, or four to six if there’s a sequel or two. An average novel gives you around ten hours (unless you read really fast) and that still feels short for me.

In contrast, a single season of a television series gives you around twenty episodes. Giving about forty minutes per episode it comes out to a little over thirteen hours. Almost adequate for me. Some series give twenty-two to twenty-four episodes per season, which comes to maybe sixteen hours. Assuming the format is not just episodic, but also gives sufficient time to a continuous narrative, I like single season series.

But what I really like (in television) is the long series (5+ seasons) which gives a continuous narrative and especially ones where there’s loads of character development throughout. Absent a good series to watch, I prefer the epic fantasy novel series where each book tends to average near 1000 pages and there’s at least three, sometimes twelve or more books. That can take quite a number of hours to read, and can really involve you in a narrative.

I suppose what drew me to movies in the past was the flashy effects, music and other big budget bells and whistles, where what draws me to entertainment media now is the story, rich with character, change, and plot. Those things are just harder to attain to in a movie where you only have an hour or two to do everything.

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Last time I wrote about socialism. I relayed a story about a professor who graded his class as an average of everyone’s performance, and discussed how it was a valid single dimensional example of how pure, true socialism fails under the weight of human nature.

This time I’d like to write about capitalism. I don’t have a story I consider to be as cute or pithy that derides capitalism, but given the current economic and political climate, I feel there is enough sentiment both toward and against it that I really don’t need one.

To be clear in what I mean by “capitalism” let’s define it thus: A system (economic and social) in which property, business, and industry are owned by private individuals and not by the state. In particular, any products, results, or outcomes that each individual is able to accomplish belongs solely to that person or to those persons with whom it has been contracted. This is in opposition to the socialist tenant that outcomes ought to be shared equally. Capitalism gives each person two main things that socialism fails to, those being 1) the threat of failure, 2) the incentive to excel.

First, the threat of failure. In a truly free market, everyone is free and otherwise left alone to accomplish what they can or, importantly fail to. This means there is no free ride. No one is going to bail you out if you can’t stay afloat. More accurately, no one is obliged by the system or government to bail you out. This threat of failure is a good motivator for those who would like a free ride. It keeps them productive and puts the burden of their support squarely on their own backs.

Second, the incentive to excel. If anyone by his or her intelligence, work ethic, supreme talent, or other superior ability is able to produce more than someone else, they are able to keep what they earn. Since many of us like comfort much more than the daily struggle, the incentive to work harder or be better at something keeps us on our toes and allows many of us to achieve higher standards of living and much comfort.

This is about the extent to which capitalism wins out over socialism. But capitalism isn’t without its flaws. Take for example the Industrial Revolution. During this period the flaws of the capitalist system reared its ugly head so clearly that it couldn’t be ignored, even this many years later. Many business owners, particularly in the rising industries, succumbed to greed (ah, that human nature again), were so focused on profit (ie. capital) that they abused and exploited their employees to get it. Since nearly every business was doing it there was nothing the working class people could do. Working conditions worsened, salaries sank, health, and living standards as a whole suffered. If someone were to complain, they’d most likely be fired on the spot and replaced by the end of the day by someone who’d keep his mouth shut.

This is where unions came in. Workers united and basically forced businesses to treat them fairly. Improvements didn’t come all at once, but the relative respect workers enjoy today is largely due to the unions, even in non-unionized work places. But unions, it turns out, are a lot more socialist than they are capitalist. You see, unions are there to protect each member (except when they’re not), and collectively ensure the good of the whole. This is a socialist tenant. Capitalism would dictate every person should take care of his or her own self.

My point here isn’t to say that capitalism is bad, or that socialism is bad – or that either of them are good for that matter. My point is that in capitalism, if everyone plays by the rules and does what’s right , actually works for everyone. But then it is also true that in socialism, if everyone plays by the rules and does what’s right, it works for everyone too.

So why so much criticism of both capitalism and socialism (especially socialism)? Because not everyone plays by the rules and certainly not everyone does what’s right. This is human nature. In capitalism this leads to a few getting very wealthy while many become very poor, the vast majority being somewhere in the middle. Many aren’t paid what their work is worth but what those above them can get away with, while others are paid much more than what they’re worth. In socialism this leads to apathy and lower standards of living for everyone, except perhaps a small ruling class that doles out the diminishing results of everyone’s labors.

It seems then to me that the best system would be either the right mix of capitalism and socialism, or a completely orthogonal system I’m not aware of as of yet. We certainly want everyone to be paid what their work is worth, and we don’t want to demonize or punish the wealthy just because they worked harder. Further, we’d like to be sure those who absolutely can’t take care of themselves are taken care of. The important thing in seeking a system isn’t looking for one that looks good on paper, but looking for one that matches the people, their morals, desires, and motivations, then applying the right set of limitations and rules to catch and penalize those who would exploit the system.

That system, as far as our country is concerned, looks a lot more like capitalism than it does socialism, but it contains elements of both. It’s been a long time since we were purely capitalists, and the people clearly don’t want to be socialists. Many are uncomfortable with the degree of socialism we have already while others feel the problems we face are caused by capitalism. Both sides have merit to their arguments, but less than they think. Even so, supposing we continue to “progress” closer to socialism, I doubt very much that any of the core ideals of capitalism will ever be given up without a fight.

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