The Right is Wrong and the Left is Wronger

The sky is falling!, No it's not!

Before proceeding please read the following article.  Article on insurance effects of global warming - Seeking Alpha  Note: I generally regard Seeking Alpha and its analysts/authors in high regard.  However...

Before I comment on the common sense of the”sky is falling, no it’s not argument” that seems to be the common thread here.  I have some questions for the author:

1)      H1 Climatalogical (temperature extremes, drought, wildfire) doubling, how does that affect insurance rates in coastal areas?  Any wildfire in Maryland I haven’t hear of? The Carolinas?  I know there have been fires in Florida, have they burned down any cities I’ve heard of?

2)      The trendline in the US thunderstorm graph doesn’t include 2006 & 2007 which would drive the trendline down significantly depending on the type of regression used.  Frankly, it appears they intentionally over fit the line to prove a point.  Do a simple linear regression on the line, adjust it for inflation throw in the fact that property values exploded during the last 10% of the graph and in inflation adjusted dollars I’m guessing, not much change.

3)      “Insured coastal exposure in Florida, for instance, was $1.9 trillion in 2004; by 2007, that number had risen to $2.5 trillion, with total coastal exposure in the US reaching $8.9 trillion, largely as a result of the boom in construction” Frankly, I’d expect better financial analysis from an article on Seeking Alpha.  Was the increase in value from building or from the bubble?  Will the bursting of the bubble, with a 20-25% reduction in value reduce this number back to $2.0 trillion? If it does, does the insurance company benefit from having the same premiums but lower exposure?

4)      A hurricane hit New York, what’s the likelihood?  Particularly of it being above Class III after having left the gulf stream thousands of miles behind?  This is a strawman argument, Nor’easters hit New York all the time, and the buildings are built for it.  Is there any record of a hurricane stronger than a class III hitting New York…..ever?

If you went on to read the comments about the article you would have seen an example of what is wrong with both the right and the left.  On the left "Global Warming" is a religion, not a scientific fact.  Particularly if you define "Global Warming" as an increase in the median temperature of the planet precipitated primarily by the activities of mankind such as burning fossil fuels.  On the other hand the right, seemingly out of defense of science and of strong desire to not take action solving the "wrong" problem advocates wanting more proof.

The glaciers in Greenland have melted? The North Pole will melt this summer? 

It is July.  After having introduced that much new water, how has the east coast escaped flooding?  I live in Virginia Beach 8 ft. above sea level.  If the Atlantic had risen so much as a foot, people all around me would have noticed the ocean in their front and back yards.  So much on both sides is taken as gospel without so much as looking outside or at Google Earth.  Seems to me that before believing someone who was telling me the North Pole was melting, I’d go look at a recent satellite shot. 

Turns out, North Pole still has some ice and my house is still 8 ft above sea level.  On the other hand, oil is a finite resource and isn’t renewing itself as quickly as we are consuming it.  It is unethical to use up all the petroleum when there are viable alternatives.  What are future generations going to think about us, when our answer to them about why we used up all of a finite resource is, “screw you we got ours?”

Privatizing Social Security or Eliminating the Neo-Slave Class

African Americans have been freed from slavery for over (depending on whom you ask 125 years), or so the story goes.  Today African American men under force of law and at the point of a gun, “contribute”  15% of their salary to supplement the lifestyle of old white women.   Perhaps that sounds like a lie, perhaps you think I am skewing the numbers.  How could that blatant a wealth transfer, defacto slavery (which I am defining here as involuntary servitude for the benefit of another), be allowed to exist in this day and age?  Because of the stereotypes put forth by the media the reader might think that this must be a Republican plot to plunder the poor for the benefit of the rich, right?

Actually no, it is primarily at this point a Democrat plot, Democratic because they are the party that successfully balked George Bush’s plan to privatize large parts of this racist plot.  Social Security was originally designed to help the poor as a safety net in retirement for those who weren’t able, for one reason or another to provide for their own retirement during their working life. Unfortunately, as is so often the case when the government gets involved, it is now a program that takes money from relatively poor minority men and gives it to the relatively rich majority women.  No longer is it a safety net for those who didn’t save, now it is a primary source of retirement income for too many and even the wealthy that have provided adequately for their own retirement are not means tested out.    

The primary problem I am describing in this post is, in a nutshell, that black men and white women don’t have the same life expectancy.

In the early eighties the Greenspan commission deliberated how to “Save Social Security” the strategy they settled on was to raise the retirement age.  This delayed the age at which citizens could draw full benefits and thus reduced the amount Social Security would disperse through that person’s lifetime and thus prolonged this Ponzi scheme for another 30 years.  Because black men have a life expectancy of 70 years see (http://www.cdc.gov/nchs/fastats/lifexpec.htm) and because if you make the wrong choice you don’t start drawing Social Security benefits until age 70, the average black man will never see any Social Security benefit.    Even if he were to choose to start drawing benefits at age 65, he would only see benefits on average for five years. After having paid into the system for on average 40+ years?  On average the African-American male doesn’t even have a statistical chance of receiving what could be considered a fair amount of interest on their money.

But white women do!  On average they live to be 81 years of age.  They draw full benefits for eleven years or partial benefits for sixteen years, in either case they draw out a far greater amount of money than black men do.  Adding to this disgrace is the fact that while women’s organizations are aware of this issue, they fight to preserve this inequitable system. To see where the National Organization of Women stands on this issue go here http://www.now.org/issues/economic/social/

Because white men and black females on average live to 76 years of age, their affect on the system is a statistical wash however; both of these groups are also required to contribute to the support of white women in the later years.  The inequity is not as pronounced, but it is still there.  This is really a story of how the real majority in the United States, white women (45% of the population) derives the cost of their retirement from the blood sweat and tears of the minority and uses their majority at the ballot box to ensure this inequitable system stays in place.

A fairer system would be one that rewarded people commensurate with their contribution and provided a safety net for those at the lowest reaches.  A system such as this would run far lower overhead and earn far greater returns.  Most importantly such a system would allow the contributor to own the account.  At this point, because you don’t own the money paid into Social Security, each person is robbed of the opportunity to pass the amount in their account on to their heirs.  If they pass away prior to exhausting the funds in their account, those funds could be passed to their estate and benefit those they felt were deserving.  As it stands now, when someone dies before receiving more in compensation from Social Security than they “contributed”, the system consumes the surplus and in the great percentage of situations this is the case with black male contributors. 

I envision a system where everyone is required to save 7.5% of their salary.  At the same time their employer would be required to match this 7.5% with another 7.5%. Like a 401K plan, the proceeds could be invested in a wide variety of options.  Under this plan 2% of the assets in the plan would be “taxed” to support those in the lowest 10%.  For illustration, I have created a chart that assumes someone start paying into the plan at age 22 and earn $30,000 with annual salary growth of 2.5% and 8% interest on average.  Age 68 a person could retire with returns on investment exceeding their income and still pay $24,650.10 per year to support someone else.  Because only the lowest 10% would qualify for benefits, 9 people would be supporting them.  The other 90%?  They would have enough savings to support themselves. 

I started off deriding the inequalities of the current system, is this one any better?  The same black man who dies at age seventy on average, is able to give his heirs almost $1.5 Million dollars.  The white woman who currently depends on the untimely death of the black man for her maintenance in her old age?  If she dies at the average age of 81 she is supported throughout her life and passes her heirs about $1.1 Million  if she lives longer, she will run out of money at age 91, a long time after the average and once she passes into the lower 10% others paying into the system would supplement her income.  Seems much more ethical all around.