Oceans Yet to Burn

argumate

Source: heavilyarmedvirtue politics the invisible fist the iron hand

ranma-official

cnbc.com

McDonald's hits all-time high as Wall Street cheers replacement of cashiers with kiosks

Cowen believes McDonald's digital ordering upgrades will drive the fast-food chain's sales higher.

Tae Kim

triggeredmedia

Demand unsustainable wages, get replaced. Pretty fucking simple.

cottoncatking

Lose out on work experience early in life, get penalized for it later, lose opportunities to help the family out, get a degree, go into debt, struggle to find a job that pays decently. But Wall Street is happy so that’s good.

rainy-days-are-over

>Get paid minimum wage

>Minimum wage never increases

>Lose job to machine anyway

Wow this is really an improvement, people should starve so I can get a wopper for $2 god bless capitalism wanting to live is for communists

triggeredmedia

I hear Cuba is nice this time of year.

I got you, though.

#not real communism

rainy-days-are-over

Yanks are genuinely this retarded.

ranma-official

Triggervs Medivs, 200 AD: “Slavery is good, slaves just have to outcompete horses while working for less”

mitigatedchaos

In which it is impossible that increasing automation across all sectors simultaneously which arrives at a speed exceeding would-be employee retraining could cause significant unemployment and downward pressure on wages below the levels necessary for long-term wellness.

But don’t worry, Libertarians’ anti-nationalist sentiment means that they’ll bring in ethnic groups that favor increased state intervention (on average), because Libertarianism assumes the political will necessary for itself. The alternative, after all, would involve buying off low income voter groups in clever ways so that they are supported by the nation and support the nation in turn.

Source: triggeredmedia the invisible fist

ranma-official

Source: diarrheaworldstarhiphop the invisible fist

mitigatedchaos

@argumate @collapsedsquid

The thing I like about the idea of mandatory safety insurance is that it introduces a new actor with new incentives into the problem.

Let us return to aircraft.

The State has determined that every airline company must carry two million dollars in insurance per passenger per flight, to be paid out in the event that the plane is destroyed and they die. It has set certain rules, for instance that the insurance company must be sufficiently well-capitalized and it can’t just waive paying out because the company did something stupid.

Executive Todd has plans to reduce the maintenance on Tumblr Airlines aircraft. He will be at the company for five years. There is a 90% chance that if he does this, there will be no crash, and he gets a million dollar bonus and leaves. There is a 10% chance that a plane will crash before he leaves and he’ll only have a personal fortune of ten million dollars and a mansion on Hawaii left, which he can retire to.

So Todd orders that the maintenance should be cut.

However, Blue Hellsite Insurance, Inc., Tumblr Airlines’ insurance company, depends for its funding entirely on carefully calculating risk and then charging a bit more than that, on an ongoing basis. To do so, as part of their contract (and thanks to provisions passed in law by the State), they can set insurance agents out to inspect processes, planes, and so on.

BHI’s reaction to a plan that results in a 10% chance of a plane crash is “you WHAT?!” Whereas the risk isn’t necessarily quite so visible or quantified to all others in the organization, or else they may have motivations to ignore it for the same reason as Executive Todd.

So BHI come back and say that either Todd’s plan isn’t going to fly, or the insurance rates are going to go up.

So what was an invisible cost that could have gotten kicked down the road to a successor is transmuted into a stubborn operating cost right now.

Tumblr Airlines makes less profit (upsetting shareholders), raises ticket prices to compensate (thus pricing the risk into the market and making them less competitive), or else doesn’t go through with the plan.

The State could even require that the portion of the cost which is the risk premium is printed on the ticket, informing consumers of roughly how dangerous a given flight is. This is actually an enormous information gain by consumers, who as non-experts find it very difficult to not only judge airline safety, but obtain inside information about aircraft maintenance procedures.

mitigatedchaos

@e8u What about Todd the Insurance Executive?

An astute observation. I actually left off that part in order to conserve length.

This entire scenario still depends on state intervention, which is why AnCaps and most Right Libertarians will not be in favor of it, even though it loosens the details of regulation to the markets and allows riskier behavior (but just prices it more).

Here’s what the State needs to do to cause this to happen:

Require mandatory insurance on certain classes of products.
Determine the rules governing the insurance so that the insurance will actually pay out.

For instance, wrongdoing on the part of the airline does not get the insurance company out of paying the insurance. (It could, however, allow them to pursue damages against the airline without breaking these necessary conditions.)

Ensure the insurance companies are sufficiently well-capitalized, so that it does not become common practice to make insurance shell companies which immediately fold rather than pay out. Criminal liability may need to be introduced here.
Create a court system in which it is reasonably feasible for regular people to actually collect the insurance payout. (It isn’t necessary that they collect the full payout, just enough that they’re willing to initiate and complete the necessary legal procedures. Some money could go into an ethical offset fund instead.)

I would say that there have to actually be enough competing insurance companies, but the market will take care of that, since this should be a reasonably profitable field. And the insurance company itself is a longer-term investment vehicle than the airline, since its practice of distributing risk changes when investors will get paid.

So, the question then is, is a system of competing insurance companies with competing insurance regulations more or less efficient and effective than a system of top-down, politically-driven regulation where government decides the details of regulations?

And that question is an empirical one. In systems as complex as economies, we can’t just assume the efficient market hypothesis. After all, this plan is in many ways in response to the existing market distortions of limited liability corporations and destruction of value being easier than creation of value.

Do it right, however, and you can also chip away at information asymmetry - the risk pricing by a moderately profitable insurance company that actually has to pay out if the product is dangerous or defective, as a share of the product’s price, communicates a lot of information that the customer previously often didn’t have.

the invisible fist the iron hand

argumate

mitigatedchaos

@argumate

essentially privatising the FAA and NTSB, although the NTSB already seems to do really good work and it’s unlikely quality would improve with privatisation.

Though really, I wanted to use aircraft to talk about building safety. The field of aircraft is already pretty safe in general.

What I’m thinking with this building materials issue is that in addition to the Executive Todd Problem being worse (because the real estate will change hands more often than the aircraft and the builders will too), and there being no insurance requirement, a lot of problems (like asbestos, or that cladding) were either known beforehand, or would not have been that difficult to figure out if someone had bothered to check first.

Additionally, the insurance company, the builder, or the owner would be losing money for every month that problem was not repaired. So instead of fighting a long legal battle and not fixing it, it’s more likely at least one of them would fix it now, then have the long legal battle about who finally gets compensated.

That would be the plan, anyway. I have other insurance-based plans to distort the markets as well.

Source: mitigatedchaos policy the invisible fist

@argumate @collapsedsquid

The thing I like about the idea of mandatory safety insurance is that it introduces a new actor with new incentives into the problem.

Let us return to aircraft.

So Todd orders that the maintenance should be cut.

So BHI come back and say that either Todd’s plan isn’t going to fly, or the insurance rates are going to go up.

So what was an invisible cost that could have gotten kicked down the road to a successor is transmuted into a stubborn operating cost right now.

the invisible fist policy the iron hand

argumate

some kinds of common knowledge are a massively valuable public good, and a centralised authority is typically the most efficient way of providing it.

collapsedsquid

It’s related to that idea that we all have time and love to comparison shop between everything. It’s basically saying “you’re going to get screwed by that crucial detail you didn’t know was important beforehand.“

argumate

and that you have the time and resources and are still alive to pursue damages through the court system against those with deep pockets who have screwed you over.

adjoint-law

I’d be interested to learn more about different models for decentralized accreditation services – consumer safety, etc. You see a little of this with professional guilds and etc I guess? But I’m not sure how much money you’d need to throw at meta accreditation to get good trust levels, or how much duplication of work you get in a free market of accreditation services, etc. It really does seem like a central authority is a good way to go…?

argumate

I think the tricky part is enforcement and incentives. Structural engineers were complaining about the cladding long before buildings started burning down, and fire fighters were shocked when they tried to put out the fires, but in order for that to translate into it not being sold, purchased, and installed on buildings there needs to be someone who says “no” when the architect says “cheap!”

mitigatedchaos

The thing that gets me with the Libertarianism thing and safety regs is that, precisely because of all the losses of information in the process and limited information resources available to buyers, I feel the regulation process really does have to bottom out somewhere with “men with guns come and say no, you can’t do that.”

And I know they hate that, but their plans often effectively give out huge subsidies in the form of unaccounted-for externalities, information asymmetry, and so on, to capital.

“Make them all buy insurance” requires a strong state to come through and force the issue and also make sure that that insurance will pay out. But if you don’t do at least that, then you allow people to engage in arbitrage against peoples’ lives (more than they do now). One could argue, even, about smoothing out lifetime earnings with loans to help pay for safety, but financial markets are waaaaaay too frictional for that and the future is too unknown.

So I don’t feel too bad about the building safety codes.

And some of the Asian countries prove you can have the building safety codes and even earthquake standards without the part that causes housing prices to quintuple.

the invisible fist the iron hand

collapsedsquid

argumate

some kinds of common knowledge are a massively valuable public good, and a centralised authority is typically the most efficient way of providing it.

collapsedsquid

mitigatedchaos

Explore vs. Exploit strikes again.

Source: argumate the invisible fist

argumate

The aircraft engine maintenance example is instructive for other reasons: airlines have strong financial, legal, and moral incentives not to kill hundreds of people, and their passengers obviously agree with this, as do the crew of the aircraft, so all the incentives should be aligned. But they still fucked up.

It turned out that some airlines took shortcuts that did not actually harm the integrity of the engine mounting, while American Airlines and some others did dangerously crack the mounting and leave it vulnerable to failure on take off, as eventually happened.

But this damage could have been noticed with regular inspections! They used a shortcut procedure – despite warnings from the aircraft manufacturer – and did not check to ensure that the shortcut was safe.

Once again if people actually did their damn jobs we wouldn’t need regulation, but believing that the market will accurately price risk in its absence is just silly.

mitigatedchaos

Ah, but here’s the trick: Corporations are not unified agents. While Tumblr Airlines might have incentive not to destroy aircraft through negligence, killing hundreds, and customers of Tumblr Airlines might have incentive not to die horribly due to lack of maintenance, Executive Todd does not personally lose $400 million when the aircraft is destroyed and can effectively extract the money ‘saved’ by cutting maintenance and move on before the consequences can catch up to him. Also, each additional dollar he earns feels less real, and its loss will hurt him less dearly than the dollar before it.

Also he’s not fully rational because he’s still human.

the invisible fist

argumate

All the NTSB recommendations are technically trade offs that have costs; consider American Airlines Flight 191 which crashed on take off killing everyone on board and two people on the ground after an engine separated from the wing due to improper maintenance procedures had cracked the pylon.

While 273 people may have died, the improper shortcuts taken during engine maintenance saved 200 man hours per aircraft! Why, the meddling FAA banning this procedure may have done more harm than the original crash!

mitigatedchaos

Nah it’s alright fam,

If we assume that the GDP per capita is $55,000, and that the typical passenger has 35 working years remaining, we can just have the state bill the company and its shareholders $525,525,000 and put them into debt bondage and sell off their assets if they are unwilling or unable to pay.

Now you may object to the state rolling around and charging huge sums of money as payment for accidental deaths, but I have it on good authority that everyone signed over their trusteeship to the state rather than get kicked into the ocean, entirely of their own free will. Quite remarkable, really. So I assure that this plan is entirely Capitalist.

death shtpost the invisible fist the iron hand policy politics

McDonald's hits all-time high as Wall Street cheers replacement of cashiers with kiosks

LMAO RIP IN FUCKIN PIECE

THERES MORE

So the ether whales, in triggering a flash crash, fucking murdered two morons who LOST EVERYTHING in their amateur trading habits

POWERUPDATE:

THESE TWO WERE PART OF 800 (maybe more) RICH, BLUE WHALE INVESTORS WHO GOT FUCKING OBLITERATED WHEN SOMEFUCK WITH FAT FINGERS ACCIDENTALLY SOLD DOWN $3 MILLION OF ETHEREUM, TRIGGERING A CASCADE OF AUTOMATIC EMERGENCY STOCK DUMPS, ALL THE WAY DOWN TO TEN CENTS PER ETHEREUM

LITERALLY CRYPTOCURRENCY HISTORY ON PAR WITH THE HACKING OF MT. GOX

That $320,000 worth of ethereum just sold for $100

5 minutes later, the price is back to $300 and your $100 of ethereum can only buy you back one third of an ethereum.

See, that’s what the app is perfect for.

McDonald's hits all-time high as Wall Street cheers replacement of cashiers with kiosks

LMAO RIP IN FUCKIN PIECE

THERES MORE

So the ether whales, in triggering a flash crash, fucking murdered two morons who LOST EVERYTHING in their amateur trading habits

POWERUPDATE:

THESE TWO WERE PART OF 800 (maybe more) RICH, BLUE WHALE INVESTORS WHO GOT FUCKING OBLITERATED WHEN SOMEFUCK WITH FAT FINGERS ACCIDENTALLY SOLD DOWN $3 MILLION OF ETHEREUM, TRIGGERING A CASCADE OF AUTOMATIC EMERGENCY STOCK DUMPS, ALL THE WAY DOWN TO TEN CENTS PER ETHEREUM

LITERALLY CRYPTOCURRENCY HISTORY ON PAR WITH THE HACKING OF MT. GOX

That $320,000 worth of ethereum just sold for $100

5 minutes later, the price is back to $300 and your $100 of ethereum can only buy you back one third of an ethereum.