Thursday, December 31, 2009

2009 Predictions Revisited

Prediction is very difficult, especially about the future.
-- Niels Bohr
It's that time of year again; time for me to give my predictions a reality check and to once again learn that I'm overconfident.

Jonathan scores me 2 out of 8; I think I deserve a score of 5.5 out of 10. Here's how I figure it:

I got 2 things 100% right:

6. General Motors will declare bankruptcy after getting billions more dollars of bailout money.

I wouldn't have predicted that we'd STILL be giving GM money AFTER they declared bankruptcy, but just today the news is that GMAC, the financing arm of GM, is getting $3.8billion more in bailout money.

9. Lance Armstrong will not win the Tour de France again.

Maybe he'll win the 2010 Tour.

Completely wrong about these 3:

1. Oil prices will continue to be wildly volatile; oil will cost more than $100 per barrel again on at least one day in 2009.

They were volatile, but didn't get much above $80 per barrel.

7. Now that Home Depot is open, Rocky's Ace Hardware in Hadley and Leader Home Center in Amherst will close in 2009.

Nope, both still open.

10. I'll only get 7 of these 10 predictions right.

By my count, if I'd got one more completely right, this one would've been correct, too. (I was really hoping to get exactly 7 of the other predictions right, in which case the tenth prediction would be neither right nor wrong, but would be a logical paradox).

Too soon to be sure, but I was probably wrong:

3. The economic recession will last through the entire year.

Unemployment is still high, and they keep revising the GDP numbers down, and the National Bureau of Economic Research hasn't yet said that the recession is over, but I predict that I'll be wrong on this one.

I'd give myself full credit for these three:

4. Conservatives will claim that the stimulus is causing the recession to last longer.
5. Progressives will claim that without the stimulus we'd be in the Second Great Depression.

Jonathan thinks those don't count as predictions, since that's what conservatives and progressives were saying BEFORE the stimulus passed.

8. Mark's Meadow school in Amherst will be closed.

I think I got this right; the school committee did vote to close the school, and it will, barring a miracle, be closed after the 2009-2010 school year ends.

Stuff I got half right:

2. Congress will pass, and Obama will sign, an economic stimulus package larger than $900 billion.

I think I should get half-credit for this one; the stimulus did pass, it was just 13% smaller than I expected ("only" 787 billion dollars).

What's going to happen in 2010? I dunno. My crystal ball isn't very reliable; I think I'll try reading tea leaves (organic, fair-trade, of course) this year.

Tuesday, December 22, 2009

The health insurance deal

So the deal is roughly -- the government will guarantee that I can buy catastrophic coverage for my family for 2% of income with a annual deductible of 8% of income? I don't think that is anything close to what Democrats intended, but maybe that's not so bad. How far would that be, really, from the libertarian preference for catastrophic insurance combined without out-of-pocket payments for normal medical expenses? -- Slocum in the comments at Marginal Revolution

The press has been focusing on the details of the health care bill, and the political deal-making and drama. The emotional, moral side of me is angry that Nebraska gets a special sweetheart deal because one of it's senators was a key vote. The rational part of me knows that in the long run that type of thing doesn't really matter, and also knows that the only way to prevent that type of thing from happening is to change the incentives, which means changing the system.

If the health care bill makes it through the House/Senate reconciliation process and becomes law, what incentives will change?

Here's a thought experiment: imagine you're a self-employed person making $60,000 per year. Under the new health plan, if you don't buy health insurance you're fined 2% of your income-- $1,200 per year.

Since you can't buy health insurance for $1,200 per year, you don't -- instead you just pay the fine and pay for any minor health expenses as the come up.

If you get something serious, you sign up for health insurance and let your insurance company pay. They have to take you because they're not allowed to exclude people with pre-existing conditions.

So: what does that do to the overall cost of health care? I think it will actually push costs down. Lots of young, healthy people will all be paying for everything but catastrophic health care costs out-of-pocket. They'll be cost-conscious.

What will that do to the health insurance companies? It will drive up their costs; we'll end up with a weird system where healthy people pay 2% of their income plus actual medical costs. And sick people pay 8% of their income in health insurance premiums, with the government subsidizes costs above that. There will be an incentive for sick people to make as little income as possible ("do I want to pay 8% of $50,000 or 8% of nothing?"). And there will be some unintended consequences; I predict you'll see a lot more sick people getting divorced (or not getting married), so their spouse's income isn't counted.

Will it be better than the system we have now? I don't know. I think it depends on what happens to the majority of people who get their health insurance through their employer. I'd like to see more details on what the employer mandate looks like; if employers have to pay up to 8% of income for a young, healthy employee, but that same young, healthy employee would only have to pay 2% of income if they were on their own, then that's an incentive for young, healthy people to work for themselves.

Maybe we'll accidentally create a whole generation of entrepreneurs...

Wednesday, December 02, 2009

Kookaburra Copyright

Kookaburra sits in the Old Gum Tree...
I'm playing with fire here; the Kookaburra song is still copyrighted. I'm pretty sure quoting the first line for non-commercial purposes would qualify as "Fair Use", but I woulda thunk that using it in a pop song was Fair Use, too.

Apparently, no. "Men At Work" are being sued, 28 years after putting half the Kookaburra song (just the tune, not the words) in the "Down Under" song. You know, the one with the line "She just smiled and gave me a vegemite sandwich."

Mmmmmm...... vegemite......

(Vegemite® is a registered trademark of the Kraft Foods Corporation. All Rights Reserved.)

Anyway, the idea behind copyright is to encourage people to create stuff by giving them a monopoly on the right to that stuff. Copyright used to last 14 years, plus another 14 years if the creator was still alive and bothered to register an extension.

I think we'd be better off with that old law. Men At Work wouldn't be sued for using the Kookaburra song (which was written in 1934, so the copyright would've been long expired). In fact, the Down Under song would be in the public domain and a whole new generation of pop stars would be free to rework it to create something new.

I suppose the danger is that if everything created before 1981 was in the public domain we'd buy less new stuff and get more old music (or movies or books...) for free. But I don't think that would happen. I think we would get more old stuff, but we'd also spend exactly as much money as we do now on new stuff. And pop stars would end up a little bit richer, because they wouldn't have to quite as much money defending themselves from ridiculous copyright lawsuits.