Risky Business
Thanks to everyone who's made the jump with me. Let's kick the new year off on a new domain, on a new platform that doesn't amplify some of the worst bigots on the Internet.
Insurance
Talking about climate change in America can be difficult, because half the people who write its laws and their voters do not believe it exists. Also, it is not a simple problem like naming post offices or paying defense contractors to build bombs - to make a serious dent in carbon emissions we'd have to pass dozens or hundreds of laws, enact immediate, decisive regulations, and make huge investments in green initiatives.
The average American can be excused for failing to grasp the scope of climate change, because the 'climate' is an abstract concept beyond checking the weather report before you leave the house. Nor should it be the responsibility of the citizenry to single-handedly tackle carbon emissions - despite decades of fossil fuel industry propaganda to the contrary. Even the people who believe in climate change can be excused for thinking someone else - politicians, scientists, billionaire philanthropists - should figure out the solution.
One reason America is the world's richest and most powerful nation is that its inhabitants enjoy unprecedented access to luxuries - big homes, big cars, big highways to convey their big cars to big shopping malls and warehouse stores. Clean running water, breathable air, reliable air conditioning in the summer and heat in the winter. The system has worked so well for half a century that only the poor ever have to worry about losing access to any of the things we take for granted.
Underpinning our embarrassment of riches is a system of frankly pretty boring financial arrangements to mitigate the risks banks take by lending us the money to buy all this shit. We crash our expensive cars more than anyone, we build millions of homes in dangerous flood and fire zones, and our embrace of urban and suburban sprawl makes natural disasters - and manmade ones - more likely. Lenders holding paper on all our precious junk need to ensure they don't take massive losses from such misbehavior.
The primary problem with insurance is that it's essentially a bet on an unknowable future. Also, the way insurance companies make money (generally) is to take premium dollars and stick them in investment accounts and earn returns for awhile until they have to pay out. Historically, this has been a safe bet because interest rates don't move much, markets mostly go up, and insurance contracts can be a bit weaselly - state regulators are often corporate-friendly - and companies can minimize claim payouts, only painfully on the hook when there's a major event. While major events did happen every so often in the recent past, they could be papered over with posthumous price increases and policy adjustments. Plus, state and federal governments often stepped in with relief funds in the event of something major like a hurricane or tornado.
One quirk of the insurance industry was that in exchange for all the subsidies and favorable legal treatment, companies often agreed not to raise rates too much in any given year, so as not to upset policyholders aka voters. Again, this was largely uncontroversial in a world where extreme weather events didn't happen all the time, but now, well:
After Allstate suffered billions of dollars in losses and failed to get the rate increases it wanted, it resorted to the nuclear option.
The insurance giant threatened last fall to stop renewing auto insurance for customers in three states that hadn’t given in to its demands, which would have left those policyholders scrambling for coverage. The states blinked.
In December, New Jersey approved auto rate increases for Allstate averaging 17%, and New York, a 15% hike. Regulators in California are allowing Allstate to boost auto rates by 30%, but still haven’t decided on its request for a 40% increase in home-insurance rates after the insurer refused to write new policies.
There is a point at which insurers have leverage over regulators - few states relish the idea of becoming Florida, with an essentially insolvent state-run insurer shakily backstopping millions of policies as companies bolt for the exits. But it isn't just Florida or California - states with more modest immediate climate risk are facing rate hikes as insurers try to staunch the bleeding.
It used to be that insurers could set rates across a state or large swaths of it, because areas with increased risk were offset by others with less. Now, however, with better modeling and changing consumer trends, an insurer's best option may be to simply refuse service or pull out of markets. The losses in the last couple years have been sobering:
U.S. property-casualty insurers, who issue home and auto policies, racked up $32.2 billion in net underwriting losses in the first nine months of 2023, $7.6 billion worse than in the same period a year earlier...
State Farm racked up $13 billion in property-casualty underwriting losses in 2022, its worst ever.
In a business where some level of loss is written in, the last two years have blown a hole in P&Ls and caused an industry-wide panic. Politicians are faced with an uncomfortable choice - let for-profit insurers gouge their customers by hiking rates double digits each year, or have swaths of their citizens unable to obtain insurance at all. A few states are trying to lure insurers back by shielding them from legal liability, but that's a band-aid on a shotgun wound.
This is the problem inherent with relying on for-profit insurers - you can't force them to write policies, only regulate their behavior once they do so. There's only so much sweetener you can offer when they're losing billions and the only option you have is to let them raise prices exorbitantly because free markets, baby.
There are opportunities to profit from the crisis. A few, uh, entrepreneurs have contracted with the state of Florida to cherry-pick profitable policies from its slowly collapsing state insurer:
“You get to cherry-pick the policies,” Lucas said, describing how he has been able to select hundreds of thousands of favorable policies — and the revenue that comes with them — from Florida’s state-run Citizens Property Insurance Corp. “You are underwriting and cherry-picking the best policies,” he added, “leaving kind of the worst ones there.”
Generally, insurance companies are barred from cherry-picking for pretty obvious reasons - if they only wrote policies they knew would be safe and profitable, a lot of people would be denied coverage. But thanks to a system they set up decades ago to try and avoid the very problem the state faces - Citizens now insures more than half the homes in Florida - vultures can swoop in and snap up tender bits of carcass.
So, what now? What can we do about a systemically important industry backstopping our country's financial health that may be on a dangerous precipice? Ideally, we could stop allowing insurance to be regulated at the state level and create nationwide standards, which would expand the risk pool and normalize prices. Also, since the government wants us all to have a big house and two and a half cars, it could create some nationalized options, like it did with Medicare and Medicaid once upon a time. Americans may be inclined to ignore their health care, but threaten their stuff and by God I'm sure they'll appreciate affordable insurance options.
Nationalizing anything in this country is politically untenable, and we aren't going to take any meaningful steps to curb emissions any time soon, so while it's an interesting thought experiment, the most likely outcome is everyone's insurance is going to get really expensive for awhile or maybe forever, and people will have to make do with less stuff.
Medicare
Speaking of a single-payer, nationalized insurance system run by the government, how's Medicare doing?
Enrollment in Medicare Advantage plans has grown substantially in the past few decades, enticing more than half of eligible people, primarily those 65 or older, with low premium costs and perks like dental and vision insurance. And as the private plans' share of the Medicare patient pie has ballooned to 30.8 million people, so too have concerns about the insurers' aggressive sales tactics and misleading coverage claims.
Oh, cool, of course. Medicare Advantage had been an easy way for all the country's insurers to defraud the government but it turns out it's also a great way to screw over seniors as well.
Basically, the government pays private insurers a commission for each enrollee plus bonuses if they hit certain recruitment metrics - which is why both carriers and independent marketers saturate seniors with TV ads, robocalls, and reams of postal mail. Deceptive and misleading Medicare advertising has become such a scourge the government has repeatedly had to step in, but like every consumer protection system in this country, it doesn't help people who've already been scammed.
Medicare Advantage plans can be appealing to newly enrolled seniors - they offer low or no co-pay options, and insurers use government bonuses to offer additional perks. But! If and when enrollees get sick, they may discover their Advantage plan doesn't cover all or any of the new condition or treatment. Some Advantage plans function a lot more like a restrictive HMO than a single-payer PPO:
Timmins, though, discovered that his enrollment in a Premera Blue Cross Medicare Advantage plan would mean a limited network of doctors and the potential need for preapproval, or prior authorization, from the insurer before getting care.
Switching back to traditional Medicare which, contrary to popular belief, does have significant costs and co-pays can be unaffordable for seniors on fixed incomes who've become used to paying little for their limited coverage. Typically, those seniors could apply for supplemental coverage like a Medigap policy, but signing up for an Advantage plan throws a wrench in the works:
While beneficiaries who enrolled first in traditional Medicare are guaranteed to qualify for a Medigap policy without pricing based on their medical history, Medigap insurers can deny coverage to beneficiaries transferring from Medicare Advantage plans or can base their prices on medical underwriting.
So, seniors are lured into low-cost Advantage plans by a yearly multibillion-dollar marketing blitz and once they realize it won't suit their needs, they're unable to swap back to a more robust plan at a reasonable price. Meanwhile, insurers are pocketing billions in commissions and bonuses from the government to administer these shitty plans, and defrauding taxpayers for billions more to boot.
Leave it to America to take a vital service to keep its aging population healthy and create a corrupt pachinko machine to keep our sick grandparents in a constant state of administrative agony.
Plagiarism
I had desperately hoped we would not have to talk again about the ginned-up controversy about antisemitism on college campuses, being spearheaded by some of the country's most bigoted trolls, but here we are.
Basically, in the last two months a bunch of rich donors pressured the presidents of Harvard, MIT, UPenn, and others to decry antisemitism, which they did, but that wasn't enough because the Congressional GOP smelled blood and hauled them in for a kangaroo hearing.
Then, for whatever reason, the NYT and other prestige publications became absolutely obsessed with the fake controversy, and especially with Harvard president Claudine Gay, penning dozens of articles and pulling reporters off unrelated desks to do so. Why? Because right wing supertroll Chris Rufo - who also runs Ron DeSantis's weird little university in Florida - openly said he was going to run a smear campaign accusing her of plagiarism. Eventually, enough evidence surfaced to prompt Gay to resign, but that was more of a lucky guess on Rufo's part - before any credible evidence surfaced, the story was a borderline obsession among members of the elite press.
So, a Black woman was pushed out of the Harvard presidency by a coordinated smear campaign from the right and the New York Times via a manufactured outrage campaign over students showing support for Palestinians on campuses. It is all very stupid and if there were a G-d the story would end there.
But! After orienting the entire conservative attack apparatus around plagiarism accusations against anyone they don't like, some details came out about Ackman's wife, a former prominent MIT professor and well:
Neri Oxman, a former MIT professor and celebrity within the world of academia, stole sentences and whole paragraphs from Wikipedia, other scholars, and technical documents in her academic writing, Business Insider has found.
Gay's most serious crime was failing to cite a paragraph she copied in a footnote, consigning it to the bibliography. Oxman, on the other hand, lifted entire paragraphs from Wikipedia for her dissertation. Nice!
Ackman, for his part, immediately jumped to his wife's defense in what would be an incredibly embarrassing display to anyone who wasn't a billionaire. He accused Insider of antisemitism for publishing a series of easily provable facts unearthed by simply running word matches on his wife's published work. He executed a strange detour to explain why she was hanging out with Jeffrey Epstein and giving him gifts (a story he tried to secretly quash) and also totally not having sex with Brad Pitt. He leaned on Insider's conservative German owners to initiate a spurious 'review' of the journalists involved. He has been tweeting late night thousand-word screeds for days and, in doing so, got his wife's Wikipedia updated to include details of her stealing from Wikipedia, which makes him the Internet's most dedicated Wife Guy.
All of this would be an amusing spectacle if not for the fact that Ackman is a very powerful voice in American political discourse due to his money, network, and the fact he refuses to shut the fuck up no matter how stupid it makes him look.
I am not going to lift a finger to defend Harvard, or any of the Ivy League institutions stepping on rakes by refusing to issue anodyne PR statements about college speech, but we are in a bad place when a few rich or well-connected guys online can manipulate the media discourse for weeks over a problem that does not exist.
The handful of college kids protesting Israel's ongoing apartheid and brazen war crimes in Gaza and nearby countries have precisely zero power or influence. The billionaires and creepy think-tank bloggers who made a professor's old PhD thesis bigger news than the wanton killing of civilians are the people we need to be talking more about.
AI
We talk about AI a lot in these pages, most of it unflattering. The central controversy over AI at the moment is not whether it can solve math puzzles or be tricked into saying embarrassing things, but whether it can legally exist at all, given that most LLMs are trained on massive troves of content that does not belong to the AI companies. Authors, music labels, artists, and most recently the New York Times have sued AI companies, presumably so ChatGPT can't pen a thousand words on plagiarism at Harvard.
In an interesting new development, OpenAI has gone ahead and fessed up:
In a submission to the House of Lords communications and digital select committee, OpenAI said it could not train large language models such as its GPT-4 model – the technology behind ChatGPT – without access to copyrighted work.
“Because copyright today covers virtually every sort of human expression – including blogposts, photographs, forum posts, scraps of software code, and government documents – it would be impossible to train today’s leading AI models without using copyrighted materials,” said OpenAI in its submission, first reported by the Telegraph.
This is certainly an argument you can make - if every form of human expression in written or drawn form belongs to the person who wrote or drew it, then yes, you cannot create a chatbot to mimic human writing or drawing without violating someone's copyright. OpenAI presumably thinks the solution to this conundrum is that it should be allowed to train its chatbots on other peoples' property but there are a lot of people out there who vehemently disagree.
If we accept the argument, the global community would have to collectively agree to suspend copyrights entirely for the purpose of...what? Building chatbots to do what? I am a bit of a broken record on this but OpenAI and its peers have yet to demonstrate why it is so necessary to handwave away hundreds of years of intellectual property law so ChatGPT can rewrite resume cover letters or reply to customer service emails.
The fundamental tension between many tech 'visionaries' and society is they feel they should be able to inflict their ideas upon us without asking whether we want whatever it is they plan on selling. I can't think of anything more imperious than calmly explaining to a government that it must grant your tech startup blanket immunity from copyright laws so you can make your chatbot sound super convincing.
What really, really sucks about this debate is that the people in charge of said government(s) are absolutely the target audience for convincing chatbots. Who would profit more from a robot telling them their ideas were good than semi-literate, preening American politicians? Who's intellectually lazier than the average political staffer or judge? What if a robot could write inspirational posts for your LinkedIn?
This debate feels dumb because the people involved are dumb, but like the other plagiarism row, what's at stake is critically important. If tech firms can exploit regulatory capture to ingest and coopt the entirety of human creation, where does it end? Is there anything they won't be allowed to do in the name of chasing investor returns? Will we have a say in whether what they're building is actually useful?
Short Cons
Texas Tribune - "Existing Texas law requires officials to consider a defendants’ ability to pay when setting bail. But in Dallas County, a judge found that judicial magistrates set bail amounts based on the alleged crime and prior convictions without determining an inmate’s ability to pay."
The Verge - "In a blog post, OpenAI said the Times “is not telling the full story.” It took particular issue with claims that its ChatGPT AI tool reproduced Times stories verbatim, arguing that the Times had manipulated prompts to include regurgitated excerpts of articles."
CBS News - "The crisis first began in early 2022, after biologists discovered an estimated 10 billion crabs disappeared — a 90% plunge in the population. "The first reaction was, is this real? You know, we looked at it and it was almost a flat line," said Ben Daly, a research coordinator with the Alaska Department of Fish and Game."
Mediaite - "“It’s time to do it,” Stone told Greco. “Let’s go find Swalwell. It’s time to do it. Then we’ll see how brave the rest of them are. It’s time to do it. It’s either Nadler or Swalwell has to die before the election. They need to get the message. Let’s go find Swalwell and get this over with. I’m just not putting up with this shit anymore.”"
KFF Health News - "But as the risk of litigation rises for clinics, obtaining malpractice insurance on the commercial marketplace has become a quiet barrier to offering care, even in states with legal protections for health care for trans people. In extreme cases, lawmakers have deployed malpractice insurance regulations against gender-affirming care in states where courts have slowed or blocked anti-trans legislation."
Neuroscience News - "The study showed that ChatGPT was capable of “memorizing” poems, especially famous ones commonly found online. The findings pose ethical questions about how ChatGPT and other proprietary artificial intelligence models are trained – likely using data scraped from the internet, researchers said."
NBC News - "Groundbreaking treatments for Alzheimer’s disease that work by removing a toxic protein called beta amyloid from the brain may benefit whites more than Black Americans, whose disease may be driven by other factors, leading Alzheimer’s experts told Reuters."
Kotaku - "While a robotic-sounding AI-powered Mario hologram is strange enough, it’s made even weirder by its connection to AARP. Why is this organization, primarily dedicated to advocating for elderly and retired people, showing off a holo-Mario?"
Gothamist -"Detainees at the Rikers Island jails have not had regular laundry service for at least a year, leaving them to wash their clothes in toilet bowls and on their bodies in the shower and to dry wet sheets on beds and in cells, according to three attorneys who represent detainees."
Know someone thinking of starting a newsletter? Advise them against it, and then send them here.