Safe and Sound - Crime, Medicare, Synapse, and Bankruptcy
Note: ASD will be off next week, back on the 28th.
Crime
With a presidential election looming, ‘crime’ will once again plague the American discourse. We are a nation of people who believe they are under constant threat, armed to the teeth against phantom assailants. Meanwhile, in reality, crime has plunged in the last thirty years, and America is safer than it’s been since the middle of the twentieth century. This reality is, of course, nonexistent in opinion polling, where Americans consistently assert that crime is bad nationally, while believing their own localities are much safer.
We did have a blip in the last two years, though, which saw violent crime peak in the summer of 2021 and level off through 2022, coming down significantly in 2023.
The good news is that 2024 is continuing the trend, with both murders and gun crimes way down in major cities across the US:
Murder is down over 40 percent in Boston, Fort Worth, Columbus, Seattle, New Orleans, Baltimore, and Philadelphia (amongst others). There are 20 cities in the sample with a double-digit decrease in murders YTD compared to 3 cities with a double-digit increase (Charlotte, Baton Rouge, and Savannah). Murder is down or even in 41 of the 51 cities that reported at least 20 or more murders at this point in 2023.
In a year-to-date comparison with 2023, when violent crime was already falling from its 2021 peak, murder and gun crime rates continue to improve. This is great news for the country, and especially for those most impacted by this type of violence.
America is both a wildly prosperous and deeply unequal country, and violent crime is no exception. Black Americans are ten times more likely to be the victim of a homicide, while the murder rate among whites mirrors wealthy European nations. As such, the Black community is the primary beneficiary of a cooling of hostilities.
Another thing that peaked in 2022, for different reasons, was auto theft. One of the few legitimate criticisms leveled at TikTok is that it taught everyone how to steal KIAs and Hyundais and boy, did they ever.
Unlike violent crime, auto theft continued to rise in 2023, up double digits. But! It’s finally on the downslope in 2024:
Auto thefts are down nearly 15 percent in a sample of 186 cities with data through at least April.
The overall decline certainly stands out — especially after four straight years of increases. What really pops out though is that auto thefts are falling a ton in the cities with a lot of auto thefts this year but they are basically even everywhere else.
The rise in auto theft was largely driven by cities, and now it is heading back towards pre-pandemic levels. Which is good, since theft is by far the most common sort of crime the average person will encounter, but can easily reinforce the sense that crime writ large is out of control.
While this news is welcome, the question remains - what the hell happened to America? The explanation I find the most convincing is one we explored back in February while talking about dangerous driving and road deaths. This country, more so than many of our wealthy peers, suffered a collective trauma during the COVID-19 pandemic that scarred us so deeply, we reacted in the most stereotypically American way - violence. We killed others, ourselves, and drove with reckless abandon. Our instinctual response to so much needless death was to create more of it.
The undertone in the declining rates of violence, theft, and traffic deaths is that we seem to be healing. We are emerging from the dark, dangerous place we inhabited for a couple years, and - despite opinion polls and political inclinations - we are back on a path of physical safety we haven’t seen since before our parents were born.
This is not to minimize the many problems we continue to fail to address, but it is difficult to convince people other societal issues are important when they don’t feel safe leaving the house.
Medicare
Back in 2022, we talked a little about what Medicare Advantage was doing to the nation’s largest single-payer health insurance system. At the time, I said:
Imagine how much better our care could be if insurance companies and doctors didn’t spend their time coming up with ways to steal money from the government.
Well! It’s 2024 now and it turns out the companies administering Medicare plans to more than half the country have been busy:
Citing the nonpartisan Medicare Payment Advisory Commission, the [JAMA] paper notes that Medicare Advantage (MA) plans have overcharged the federal government to the tune of $612 billion since 2007—and $82 billion last year alone.
As I have mentioned, I marketed Medicare Advantage plans to seniors at a previous job, so for those new to these pages let me explain a little bit about what Advantage is, and how it got so big so quickly.
When a person turns 64.5, they become eligible for Medicare, which comes with a menu of options. There’s basic Medicare health coverage (Part B), which most closely resembles a standard health insurance plan, covering medical care and preventive services. Then there’s a prescription plan to cover medications, and two different types of additional coverage choices - a ‘supplemental’ plan (Medigap) which sits atop Medicare and can reduce out-of-pocket costs, and an Advantage plan, which offers baseline health coverage at a much lower cost. If Medigap is a PPO plan, Advantage would be a cut-rate HMO.
Advantage plans are attractive to younger seniors, newly entering the Medicare system with fewer chronic ailments, or transitioning off their employer’s insurance for the first time. For the average senior - with little retirement savings and/or on a fixed income - paying hundreds+ a month for insurance is far less attractive than a smaller (or no) premium that purports to cover any major medical events.
The problem with Advantage plans is they are subject to the whims of the private insurers who administer them. Often, Advantage coverage shifts on a yearly basis, as actuaries and insurance execs shift profit models. Unlike stock Medicare, the government pays insurers lump sums based on various criteria (which insurers constantly game), and there is no guarantee those extra dollars are passed through to Medicare enrollees. In fact, as the recent study finds, billions are put straight into the pockets of said insurers. How nice for them.
Nor is this a victimless crime - the billions stolen by insurers could have gone to provide better services to everyone in the Medicare system, the millions of seniors who are living longer, requiring more expensive treatments, and have done nothing wrong other than pay into a system their whole lives and expect a minimum quality of care at a time when they need it the most.
Synapse
A couple weeks ago we touched on fintech, the Escherian system of middle men shaving profits off our every interaction with digital commerce.
We talked about one company called Synapse who was responsible for connecting thousands of apps and systems, affecting millions of people who, unbeknownst to them, could lose access to their money when a company they never heard of turned off its servers.
At the time, both I and a bankruptcy judge puzzled over why Synapse had abruptly shut down its network rather than, you know, going through some form of protracted unwinding. Well!
There is an $85 million shortfall between what partner banks of fintech middleman Synapse are holding and what depositors are owed, according to the court-appointed trustee in the Synapse bankruptcy.
Customers of fintech firms that used Synapse to link up with banks had $265 million in balances. But the banks themselves only had $180 million associated with those accounts, trustee Jelena McWilliams said in a report filed late Thursday.
Ahhhh, yes. There it is. It turns out there were a handful of banks involved in moving Synapse funds around, and someone seems to have misplaced a third of the company’s funds. Whoops!
When a bank fails, there is not only insurance to protect depositors (the FDIC, in our case) but generally speaking, there is an accurate ledger of where funds are, or where they’re supposed to be, whether that’s in a vault or invested in various low-risk assets, et cetera.
With a fintech like Synapse, run more like a software company than a bank, you can just, like, misplace the money I guess? And because there’s little oversight from regulators, no one notices the missing $85 mil? Sure.
It bears repeating that, crypto scams aside, there are plenty of other companies offering financial products that might not, in fact, be properly set up to administer them. Be careful where you ‘bank’, because sometimes your bank isn’t a bank, it’s a virtual wallet attached to a company that may or may not know where your money is.
Bankruptcy
Despite what the media would have you believe, bankruptcy is not supposed to be a joke. If you’re a wealthy company seeking to avoid legal liability or looking to screw over workers, the bankruptcy system can be bent to your will, but for individuals seeking protections, it’s supposed to be fairly straightforward.
There are two types of personal bankruptcy. Chapter 7 is intended to wipe the slate clean - in exchange for strict auditing and monitoring, most debts are completely forgiven, and most assets other than things like primary residences and retirement accounts are liquidated to pay creditors. Chapter 13 is a debt restructuring plan, where the filer pays what they can afford based on financial statements to the court, and creditors receive a percentage of what they are owed.
For a business, Chapter 11 is similar to a 13 in that it allows the filer to remain in control of their assets and finances while they negotiate with the court and their creditors.
These distinctions are especially pertinent this week, because noted scumbags Rudolph William Louis Giuliani and Alexander Emerick Jones are in various stages of having their respective bankruptcies converted from ‘debt restructuring’ to ‘we are going to sell all your shit’.
In Rudy’s case, he’s used Chapter 11 to dodge legal liability for a massive jury award for defamation. But, given his inability to perform simple tasks such as ‘filing documents’ and ‘not lying under oath’, his creditors are seeking to convert his bankruptcy to a Chapter 7, so they can get at his assets:
Since Giuliani filed for bankruptcy protection, spurred by a $148 million defamation verdict, his creditors have accused him of hiding assets and a coffee deal, spending egregiously, and failing to timely file required paperwork.
They have now had enough. On Monday, lawyers representing Giuliani’s creditors will return to bankruptcy court in New York, hoping to convince a judge that the time has come for a trustee to step in.
A look inside Giuliani’s finances paints exactly the picture you’d imagine - tens of thousands a month to maintain tacky condos in Manhattan and Palm Beach, extravagant spending on meals and travel, and paying his girlfriend-slash-employee’s credit card bills.
After his radio show (?) was suspended following his indictment for election fraud, Rudy started a coffee company, without bothering to tell the court or his lawyer. Whatever. His shaky finances and loose ties to a guy trying to siphon as much campaign money as he can to pay his own legal bills mean Rudy’s attempts at subterfuge may just be delaying the inevitable.
Elsewhere, Alex Jones has finally agreed to convert his bankruptcy to a Chapter 7, meaning his creditors can finally get at some money after years of delays:
The legal maneuver ultimately “means [Jones’] ownership in Free Speech Systems is going to get sold,” Avi Moshenberg, an attorney who represents some of the Sandy Hook families, told CNN on Thursday night, referencing the parent company of Infowars.
Which begs the question - what is Infowars, and the rest of Jones’s sprawling web of snake oil and paranoid prepper gear companies worth? Is there a buyer for Infowars Sans Alex Jones? Would Jones stay on as an employee of whoever bought it? I wish I did not have to think about these things, but nevertheless, I have questions.
The best outcome, not for Rudy or Alex but for the rest of us, is that these two putrid fountains of hate are financially ruined and forced out of the public spotlight forever. Given their indefatigable need to be in front of cameras and microphones, and the millions of marks who insist on subsidizing their lifestyles, it seems unlikely we’ve heard the last of these two, even if their lives will be made unpleasant for awhile.
Short Cons
CNN - “More than 15,000 Amazon contract drivers filed arbitration claims against the e-commerce giant on Tuesday, alleging Amazon classified them as independent contractors instead of employees with minimum wage and overtime rights.”
WSJ - “When a patient with employer-based insurance goes under for surgery, the anesthesiologist’s fee is supposed to be determined by market forces. But what happens if one firm quietly buys out several anesthesiologists in the same city and then hikes the price of the procedure?”
NYT - “On Wednesday, federal prosecutors said Mr. Smith abused his power to pull off an astonishing fraud: He stole nearly $40 million between 2012 and this March, they said, equal to 39 percent of all the money that the group had reported spending in that time, burning through the group’s cash reserves.”
MIT Tech Review - “Generative AI reduces the cost of running propaganda campaigns, making it significantly cheaper to produce content and run interactive automated accounts.”
MIT Tech Review - “And yet for all the crude gamelike elements that have been grafted onto our lives, the more hopeful and collaborative world that gamification promised more than a decade ago seems as far away as ever. Instead of liberating us from drudgery and maximizing our potential, gamification turned out to be just another tool for coercion, distraction, and control.”
Know someone thinking of hiding their assets by filing for bankruptcy? Send them HERE!