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Consumer Watchdog should want a more dynamic, competitive market for California insureds

October 29, 2015, 10:37 AM

Yesterday, I published a paper about, and titled, “The troublesome legacy of Prop 103.” Shortly thereafter, an organization called Consumer Watchdog published a startlingly quick response.

The speed of their response, while impressive, is no surprise. Consumer Watchdog owes its very existence to Prop 103. That initiative was its genesis and, as a frequent intervenor, continues to be the one of the primary sources from which it draws its monetary support (which is to say, from the pockets of Californians).

In its haste to read, digest and respond to the study, Consumer Watchdog trotted out some of its favorite well-used talking points. So, for edification, enlightenment and entertainment, I present the top three mischaracterizations of Consumer Watchdog’s response…

“The law has saved drivers $100 billion on their insurance since 1988…”

This is the most common, and perhaps the least accurate, claim offered by Prop 103’s defenders. To come to that number, the Consumer Federation of America compared and totaled the difference between initial rates filed and eventual rates approved by the California Department of Insurance. That rather wanting calculus is good for shock value, but doesn’t shed much light on what is actually going on. In fact, by the logic of the CFA calculus, any rate-review mechanism that ever results in a rate reduction in any state is responsible for “saving” consumers money.

Of course, that’s a mischaracterization of what’s happening. Following the CFA’s logic leads to the rather amusing conclusion that when Prop 103 allows for rate increases to ensure rate adequacy and insurer solvency, it must be costing consumers money. Gasp!

Both statements are absurd. Cost drivers dictate rates; systems like Prop 103 simply confuse price signals.

“Consumers save under Proposition 103 because insurance companies are required to justify and get approval for rate increases before they take effect.”

Here Consumer Watchdog describes what is commonly known as a “prior-approval” process. The system is not unique to California. However, unlike other states in which insurers file and the insurance department in question gives a relatively straightforward thumbs up or down to the rate, California’s system has become so convoluted (largely because of intervenors like Consumer Watchdog) that rate filings have, by necessity, become rate negotiations. Rate negotiations demand that insurers, much like any party proposing a price at the start of a negotiation, treat their initial filing as a first offer.

For this reason, particularly when compared to other states, Prop 103 wastes time, slows the speed-to-market of rates, and costs consumers money.

“Proposition 103 allows the public to participate in the rate-making process.”

I encourage anybody who reads this piece to visit the Department of Insurance to register as an intervenor. It’s an “easy” process.

  • Step one: Simply hire a lawyer, find an accredited actuary; pull up California Code of Regulations, Title 10, Chapter 5; reference sections 2661.1 – 2662.8 (while ensuring that you’re also in compliance with the old regulations); and request a filing of eligibility.
  • Step two: Find a filing with which you disagree and make a “substantial contribution” to the disposition of that rate (this process takes, on average, 420 days).
  • Step three: Assuming that a substantial contribution has been made, file a notice of intent to seek compensation and request an award of compensation.

That’s all! No wonder the public is so eager to participate in the process. In fact, since 2013 there have been a grand total of five findings of eligibility to seek compensation. Five.

Consumer Watchdog’s defensiveness is natural, but counterproductive. With the arrival of autonomous vehicles, the rigid rate-approval process that Consumer Watchdog currently trumpets will violate the law’s putative purpose sooner rather than later. When that happens, Prop 103 reform is becoming a virtual inevitability.

Moving forward, we at R Street hope that Consumer Watchdog will champion efforts to shape the future of California’s insurance market. As the current system’s progenitors, they are well-positioned to contribute meaningfully to the next system’s creation. Let’s hope that the old system doesn’t hold them back.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

How bitcoin can help get money to refugees in need

October 29, 2015, 9:47 AM

Bitcoin and other cryptocurrencies have grown in influence and usage the past few years. People looking for an alternative to government-issued fiat currencies, or who simply don’t trust having their spending tracked by banks, have flocked to them. Bitcoin also has become an interesting method of payment across international borders and a way to avoid transaction fees.

There is another use for bitcoin that might get some use in these tragic times: as a way to provide relief for refugees. Refugees, by definition, are a mobile population. The explosion of cellphone technology means even many of the world’s poorest have them. The proliferation of microfinance and microbanking has lifted many of these poor cellphone users out of poverty.

However, a major problem refugees face is lack of access to traditional banks. The banks in their home countries may be out of service. They also likely do not have the proper documents to set up a bank account in their host country. Bitcoin can provide a way to bypass the traditional banking system and give aid to refugees directly.

Tiffany Hayden, the CEO of Enable, a firm that aims to be the “first provider of emergency financial assistance,” sees bitcoin as a disruptor that can change the way aid is given.

International relief and development organizations regularly disperse high volume, low value payments to millions of recipients. In emerging countries, this often involves the time consuming burden of distributing physical cash. By providing cost-effective solutions beyond stopgap measures to humanitarian agencies, funding can be disbursed quickly, fairly and in a transparent manner. Reporting tools that are built into the platform can provide critical financial information that is needed during an emergency.

…The Enable app will allow users to save, spend, distribute and receive money. Local merchants can also use this same mobile application to receive and disburse payments. For merchants that are already accepting physical vouchers, the benefits are even greater! Manual paperwork and delayed payments will no longer be an issue.

By utilizing distributed ledger technology and focusing on interoperability, it is possible to build a globally accessible, currency-agnostic platform that all responders — individuals, organizations, states and NGOs — can “plug in” to; a platform that will, furthermore, convert aid into digital assets that can be distributed instantly to mobile wallets and in a way that is fair, transparent and accessible to all.

That helps with aid in the camps. It also would allow aid to be tracked and provided transparently. The data collected can help aid workers and relief agencies plan for how to meet the needs of refugees in future events. Finally, it would allow the various partners to work together to help people.

Most bitcoin wallets allow users to convert bitcoin into gift cards. If refugees need to convert bitcoin to their host country’s local currency, a company called Bitplastic might be able to help. They have developed the world’s first bitcoin debit card. The debit MasterCard works much the same way as a traditional bank’s debit card, except it’s tied to a bitcoin account.

Refugees have the chance to be contributors to a host nation’s economy in many ways. If bitcoin can help streamline and disrupt the often bureaucratic mess that is international aid, it should be given the chance.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Gin and regulation: a lesson in a bottle

October 29, 2015, 8:32 AM

There is a bottle that sits on my desk which serves as irrefutable proof that less regulation is better than more.

Pull the stopper top and a remarkable aroma plumes forth. “I’d wear this as cologne,” a colleague remarked. He’s a clean-cut fellow, mind you, not a gutter dipsomaniac. “That’s really nice,” exclaimed another.

This 90-proof liquor’s scents come from juniper, cucumber, lemon, sage, lavender, black pepper, red bell peppers and pimento. It is Uncle Val’s Peppered Gin, made by 35 Maple Street Spirits in Sonoma, Calif.

Gin, you ask? Is that not the water-clear hooch from the United Kingdom that smells like pine needles? Yes, often gins are made in the London Dry style (think Beefeater). But gin need not ooze juniper.

And here’s where federal regulation comes in. In the United States, the definitions of various liquors are not spelled out in prolix laws. Our drinks are loosely defined in laconic regulations. The Code of Federal Regulations, volume 27, section 5.22(c) lays out the “standards of identity” for gin. It reads:

…a product obtained by original distillation from mash, or by redistillation of distilled spirits, or by mixing neutral spirits, with or over juniper berries and other aromatics, or with or over extracts derived from infusions, percolations, or maceration of such materials, and includes mixtures of gin and neutral spirits. It shall derive its main characteristic flavor from juniper berries and be bottled at not less than 80° proof.

So long as it meets the basic production requirement and its main flavor is juniper berries, it may be labeled gin. I hasten to add that there is another version of Uncle Val’s gin flavored with rose petals. Whether the gin is made in London or Sonoma is no matter. Indeed some of the most interesting gins – including barrel-aged ones – are today made in places likePhiladelphia; Seattle; Boulder, Colo.; and Middleton, Wis.

Simplicity in federal rules allows entrepreneurial distillers room to be creative and we, the people, benefit. Would that the government followed suit in regulations generally, which at last word comprised more than 170,000 pages.

How many Americans smoke?

October 29, 2015, 8:24 AM

In June, the Centers for Disease Control and Prevention released data from the 2014 National Health Interview Survey, an annual report the CDC has used for half a century to generate national smoking-prevalence estimates.

The agency generally publicizes cherry-picked data on surveys to emphasize its mission to eradicate tobacco (e.g., e-cigarette use by teens, here), but it hasn’t commented on smoking rates. In this column, I offer smoking prevalence estimates from the 2014 NHIS.

The chart below shows the prevalence of current smoking among adults in 2005, 2010 and 2014. The CDC previously reported on smoking trends from 2005 to 2010, so we can compare that period with 2010 to 2014, during which time e-cigarettes gained traction in the United States.

Among men, smoking declined about 10 percent from 2005 to 2010, and about 12.5 percent during the latter four years (the diagonal bars in the chart). The earlier decline among women was modest (4.4 percent), but the drop from 2010 to 2014 was an impressive 14.5 percent.

The prevalence of former smoking was relatively stable for men and women in all years, which belies the notion that e-cigarettes created a surge in quitting. The declines in current smoking are likely a reflection of the increasing percentage of Americans who have never smoked and the long decline in teenage smoking.

In summary, in 2014, the number of Americans who smoke dropped below 40 million for the first time in the 50 years that the NHIS has provided smoking statistics. The number of former smokers in 2014 was 52.2 million.

These numbers do not support the claim of tobacco prohibitionists that e-cigarettes are “re-normalizing” smoking. Rather, the decline in smoking continues.

GOP struggles to attract tech and cyber talent

October 28, 2015, 12:44 PM

From SC Magazine:

In early 2013, Nathan Leamer, a congressional staffer working on the Hill, had an “Aha” moment. He was reading an article about the self-imposed challenges that the GOP faced when attempting to launch cohesive, tech-savvy campaign strategies. Many of the experts quoted were frustrated millennials like himself who felt isolated within the Republican establishment for believing that technology was a central priority for the GOP. That experience was enough to convince him to try to affect change on the GOP from outside of the Hill.

NYT calls Jill Biden a doctor 3 times more often than Ben Carson

October 28, 2015, 11:17 AM

From The Free Beacon:

The New York Times referred to Jill Biden as a ‘doctor’ three times more than Ben Carson, according to the Weekly Standard…


Reforms needed for troublesome Prop 103

October 28, 2015, 11:15 AM

SACRAMENTO, Calif. (Oct. 28, 2015) – Reforming California’s Proposition 103 regime to promote a competitive auto-insurance system would lead to a healthier and more consumer-friendly insurance environment, finds a new study by the R Street Institute.

“Passed in 1998 ostensibly to help control insurance rates and protect consumers, Prop 103 has instead helped California’s auto insurance rates remain among the highest in the nation,” wrote author Ian Adams, R Street’s California state director and senior fellow.

Adams cites Illinois as a state with a consumer-friendly auto insurance regime, which evolved out of the sunset of previous legislation that contributed to an onerous environment. After the law expired, Illinois pushed forward with a mission to liberalize regulation to ensure appropriate oversight and foster competition.

Recognizing that overhauling the system would be a daunting task, Adams lays out shorter-term goals that could be achieved more easily, such as rationalizing the power of intervenors, individuals or consumer groups who slow rate filings from coming to market and are compensated by the California Department of Insurance.

“Requiring that intervenors must bring a novel position to a rate hearing would improve the speed with which rate filings are resolved and address a significant barrier to market participation,” Adams wrote.

Adams also lays out other changes, such as modifying “persistency” requirements to make it easier for companies to lure customers away from other insurers, thus increasing competition in the market.

“It is important to make Prop 103 work for the public,” wrote Adams. “That means looking to other states for clues about elements of the California system that are obviously dysfunctional. The very structure of Prop 103 is to force rates to be in excess of what they could be under another system.”

The Chicago Way: Bringing a subsidy to a fight over ridesharing

October 28, 2015, 11:12 AM

Uber became so popular so fast because it filled voids the regular taxi industry did not: its drivers would go into non-touristy neighborhoods, pick up African-American customers and were available when people got out of work.

Uber and its rideshare counterparts, Lyft and Sidecar, stepped in to meet needs that riders had for years, but the taxi industry in most cities ignored. The taxi industry’s response has been, for the most part, to fight ridesharing rather than make their practices friendlier.

Here in Chicago, the taxi industry has clung to one advantage: a requirement that drivers-for-hire picking up passengers at O’Hare and Midway airports must have a chauffeur’s license. This, in effect, gave cab companies a monopoly and made it less profitable for rideshare drivers to do airport drop-offs. On Monday, the Chicago City Council Transportation Committee members agreed to allow rideshare companies to pick up at the airports. A vote by the full council is scheduled for today.

Of course, there are conditions. Specifically, rideshare users will now pay a $0.30 per-trip fee to the City of Chicago. The fee will increase to $0.50 for all riders and to $0.52 for airport pickups. In addition, taxis will continue to pay a fee of $4 for access to the airports, while rideshare companies will now pay $5 for access to airport pickups and to drop off or pick up at McCormick Place (Chicago’s convention center) or Navy Pier (Chicago’s tourist trap). Meanwhile, the city is increasing taxi fares by 15 percent.

It might tolerable if the new fees were feeding Chicago’s starving city coffers, but instead, some of the money will go right back the taxi industry. Specifically, it will be used to offset the costs of fingerprinting, background checks, drug testing, driver-training classes and chauffeur license fees.

Taxis also retain certain explicit advantages over ridesharing. Most obviously, taxis can pick up riders off the street. They work without apps. (On more than one occasion, I’ve hailed a taxi because my cellphone battery was dead.) Cabbies accept cash, and at least a few aren’t paying taxes on all of the cash they accept. Cabs carry advertising, which generates additional income. And now, they are receiving a subsidy from Uber riders.

Does that make sense?

In what world are companies taxed specifically to make their competitors more efficient, while also making their service more expensive for consumers?

It’s even more egregious when you consider that some of those fee-paying riders are African-Americans or South Side residents that taxi drivers long have avoided. Chicago is a majority-minority city covering 234 square miles. It’s an open secret in Chicago that the taxi industry has mostly served white people downtown and on the North Side. That may have worked well for them all these years, but it isn’t working now. Instead of changing to meet the competition, taxi companies appear to be retrenching.

I’m not completely unsympathetic to the problems facing taxi drivers. I’m a Chicago resident who rides Uber or takes taxis a few times a week. Both are often cheaper than paying for parking and more convenient than taking the El. Driving a taxi is dangerous work, and some of the problems with cabs are the faults of the companies, not their drivers.

But I also see how much my African-American friends love Uber because, at long last, they can get rides. People of all races living far from downtown can get picked up and dropped off with no grumbling. My high-school kid can use it to get home from parties in the suburbs where there is no taxi service or where trips would involve meter-and-a-half rates. Uber drivers tell me they like knowing that they will get paid at the end of the ride, because users have credit cards on file.

Deregulating the taxi industry might help drivers, but it would further damage the monopoly power of the medallion owners. Rather than asking the medallion owners to learn to compete, the Chicago City Council is giving them a subsidy to continue business as usual. That’s wrong.

It also won’t work. A rideshare-subsidized drop in the chauffeur license fee from $15 to $5 isn’t going to be enough to offset that ridesharing companies still have a better product. The taxi companies will be come back to City Council, asking for more help, because that’s easier than making fundamental changes to their business model.

In the meantime, I’ll probably still mostly take the El to the airport. Neither Uber nor a taxi can solve the problem of traffic on the Kennedy Expressway.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Jill Biden 3x more likely than Ben Carson to be called ‘Doctor’ by NYTimes

October 28, 2015, 10:34 AM

From The Weekly Standard:

Jill Biden, the wife of Vice President Joe Biden, is a doctor of education. Ben Carson, a Republican presidential candidate, is a medical doctor.

But in the New York Times, Biden is 3 times more likely to be called doctor than Carson…

Study: Shoring up Florida’s property insurance market

October 28, 2015, 10:31 AM

From SaintPetersBlog.com:

STUDY: SHORING UP FLORIDA’S PROPERTY INSURANCE MARKET via R.J. Lehmann of The James Madison Institute – Florida has subsequently enjoyed a hurricane-free decade, representing the longest period on record without a tropical cyclone making landfall in the state … many scientists believe climate change will only increase the severity and incidence of storms in the future…


Dr. Who? The New York Times has a ridiculous Ben Carson double standard

October 28, 2015, 10:26 AM

From The Federalist:

According to a national poll released Tuesday morning from CBS News and The New York Times, Ben Carson has become the leading contender for the Republican presidential nomination. Carson now has the support of 26 percent of Republican primary voters, four percentage points ahead of Donald Trump…



The troublesome legacy of Prop 103

October 28, 2015, 8:00 AM

In 1988, California voters approved Proposition 103 by a slim margin, 51 percent to 48 percent. Over the more than a quarter-century since its passage, implementation of the measure has dramatically changed the course of the state’s regulatory structure and that of the entire U.S. property-casualty insurance industry.

Both Prop 103’s authors and its latter-day defenders claim the law and its regulatory progeny have been effective in controlling rising insurance rates, saving Californians billions of dollars in the process. They repeatedly have sought to protect it from amendment and repeal, even seeking to have its scope broadened. They have battled at the ballot box, in the Legislature and in courts to defend their achievement and maintain the new status quo. Yet, per dollar of premium, California’s auto insurance rates remain among the highest in the nation.

This paper examines not the superficial claims that Prop 103 has produced consumer savings for Californians, but instead compares the efficiency and competitiveness of California’s property-casualty market using data gathered from publicly available rate-filing outlets like the National Association of Insurance Commissioners’ System for Electronic Rate and Form Filing (SERFF).

Specifically, our research examines how California compares to a diverse group of five states (Illinois, Nebraska, New York, Louisiana and Washington), chosen both for their varying sizes and because each takes different approaches to the rate-approval process and to the means for selecting an insurance commissioner.

To understand which system is most effective at encouraging competition, we examined the number of filings made in each state; the speed-to-market of those rate filings; and the impact of a unique feature of the Prop 103 system – rate intervenors.

Our results suggest that Californians are paying more and getting less for their system of insurance regulation than any of the other states examined. California’s insurance department is larger and more costly even than New York’s, which has the additional responsibility of regulating significant parts of Wall Street. Its speed-to-market is slower than other prior-approval states – like Washington and Louisiana.

Most problematically, California enjoys fewer rate filings on both an objective and adjusted basis than the other states – in some cases, by orders of magnitude. This is a telling metric of an insurance market’s present and future health.

The California system discourages competition because it is slower, less predictable and more punitive than other states. Lengthy form review cycles tend to mean that California consumers are slow to receive new products, even though the state’s market—as the nation’s largest and most diverse— should make it among the first.

Prop 103 purports to promote consumer protection through state intervention in the rate-making and underwriting processes. But while consumer protection is a value shared by all, there are varying means to achieve it. A functioning ratemaking system that encourages competition would lead to a more reliable form of consumer rating protection: market competition.

Study: E-Cig bans on minors lead to higher smoking rates

October 27, 2015, 5:42 PM

As electronic cigarettes have proliferated and spawned a sub-culture of their own—vape shops, chai-latte-flavored vaping fluid and even the “sport” of cloud chasing—few policies have seemed as intuitive as stopping children under 18 from buying them.

As almost all e-cigarettes contain nicotine, they’re addictive. Because nicotine is a stimulant, vaping almost certainly has the potential to cause heart disease. E-cigarettes likely don’t cause cancer and lung disease (those come mostly from the burning that takes place in combustible cigarettes) but they certainly aren’t risk-free either. Since e-cigarettes are so new, finally, nobody can be certain about their long-term health impacts. Nonetheless, the policy of banning sales of e-cigarettes to children has support from anti-smoking groups, major tobacco companies, upstart vaping companies, vape-store owners and advocacy groups that speak for vapers. The only organized opposition to some state-level youth-sales bans has come, indeed, from anti-smoking groups that are suspicious of big tobacco’s support for them and want legislatures to pass other regulations or taxes at the same time.

That’s why it’s interesting and perhaps a bit distressing to note a new paper accepted by the Journal of Health Economics (but not yet formally published) and written by Yale University’s Abigail S. Friedman. The paper, dense with economic jargon and regression analysis, comes to a shocking conclusion: “bans on e-cigarette sales to minors yield a statistically significant 0.9 point increase in the recent smoking rate among 12 to 17 year olds.” The increase, she finds, is large enough to offset the overwhelming bulk of the decrease in youth smoking that has otherwise taken place. Friedman’s data, furthermore, stands up even when controlled for everything from smoking rates among 18-25 year olds to state cigarette taxes.

Because they contradict such a widely supported and uncontroversial policy, it’s difficult to know what to make of these findings. Laws banning e-cigarette sales to children are unlikely to be repealed outright where they already exist (no organized group supports doing so) and there’s something unseemly about letting 8-year olds do something that looks almost exactly like smoking to casual observers.

Nonetheless, the Friedman’s findings can’t be ignored. If banning e-cigarette sales to minors causing more of them to take up smoking, then the current policy trend is almost certainly a net negative for public health resulting in millions of cumulative years of lost life.

Friedman herself suggests investigating the possibility of allowing 16 year olds to purchase e-cigarettes but not conventional ones. That certainly seems like a worthwhile idea to explore even if though doing it would almost certainly increase the number of high-school students who vape. Even better, it might also be worth exploring efforts to nuance the message of anti-smoking education programs. While it’s almost certainly best for one’s health to abstain from the use of any nicotine product, letting schoolchildren know that e-cigarettes are less dangerous than combustibles could encourage those who end up using one of them to select a safer alternative. Almost no modern anti-smoking programs make the distinction even though it could save lives. Since about 20 percent of American adults smoke even after decades of stern public health warnings, after all, a totally nicotine-free society isn’t an obtainable goal and probably isn’t a desirable one anyway.

The biggest takeaway, however, may be this: government policies intended to promote public health, even policies with near-universal support, can sometimes have negative consequences. Regulation, even when just about everyone supports it, can literally be deadly.


Right reform for the prison system

October 27, 2015, 3:32 PM

As recently as 1990, America’s federal prison system contained too few inmates and sent many serious criminals away for sentences that were too short. In recent years, however, the 121-institution Federal Bureau of prisons has grown too large (210,000 inmates), too expensive ($6.8 billion last year), too overcrowded (it’s at 123 percent of capacity) and too ineffective (recidivism rates remain well over 50 percent) to justify its continued growth. That’s why it’s important that Congress consider some newly proposed legislation which would begin the process of making federal prison system smaller, more effective and less expensive. The bill in question, the Sentencing Reform and Corrections Act, takes proven, commonsense steps that will preserve safety while serving the cause of justice and saving money.

Fundamentally, the bill, which counts supporters ranging from libertarian philanthropist Charles Koch to the left-wing Center for American Progress, draws on things that have worked at the state level. Over the past decade, dozens of states ranging from the deep blue California and Rhode Island to the ardently Republican Texas and South Carolina have shrunk prison populations by separating the truly dangerous from the merely misguided.  In all of these places, crime rates have generally continued on the downward course they’ve set for the past 30 years.

And many of the reforms made at the state level—like many proposed at the federal level in the law now before Congress—are just common sense. It’s foolish that current federal mandatory minimum sentence laws make it impossible for judges to show some lenience on sentencing to a single mother who gets drawn into the underworld out of desperation. It’s equally problematic when early release standards (there’s no parole in the federal system) offer little recognition for those who really turn their lives around behind bars.

It’s also a good idea to allow some relatively low risk offenders to return to their communities under intensive supervision with a promise of a quick return to prison if they screw up.  Programs like this have worked well in places ranging from Texas to Hawaii and deserve a try at the federal level. Federal prison officials, likewise, should have the powers enjoyed by many of their colleagues at the state level to provide phone, email and visitation privileges as an incentive for good behavior.  While it makes all of these reforms and more, the Sentencing Reform and Corrections Act doesn’t free anyone from prison who hasn’t done something to earn early release or arbitrarily shorten any criminal sentence.

And one doesn’t have to buy many of the claims made by reformers on both the far-left and libertarian right to believe that proposals like the ones now before Congress are good ideas.  Indeed, almost everyone doing time in the federal prison system has committed a serious crime and even a large portion of people serving time for “nonviolent” offenses have acts of violence elsewhere on their records. While many do get sentenced for drug offenses, likewise, it’s nearly impossible to end up in the federal pen for simple possession of a small quantity of illegal drugs. But there are still a lot of reasonably low risk offenders in the system who aren’t particularly likely to prey on society if released. Indeed, warehousing many of them makes it harder to provide effective punishment for the truly dangerous criminals.

In short, it’s possible to believe that expanding the federal prison system once had value while simultaneously believing we should work to shrink it today. States have pointed the way toward a better correctional system. Now Congress needs to follow and reform the federal prisons.

Whom does The New York Times consider a doctor?

October 27, 2015, 11:37 AM

According to a national poll released this morning from CBS News and The New York Times, Ben Carson has surged ahead to become the leading contender for the Republican presidential nomination. Carson now has the support of 26 percent of Republican primary voters, four percentage points ahead of Donald Trump.

That’s quite an accomplishment for what initially was considered a very longshot candidacy. Some might suggest it merits a modicum of respect – say, by referring to the longtime director of pediatric neurosurgery at the nation’s premier teaching hospital (Johns Hopkins) with the well-deserved title “Dr.”

Yet in the pages of the Times itself, more often than not, Carson isn’t identified that way. In fact, thumbnail analysis I just did of Times stories using the media tracking service Nexis shows that Second Lady Jill Biden (who in 2007 received a doctor of education degree, or Ed.D., from the University of Delaware) is more than three times more likely to be called “Dr.” by The New York Times as Carson is.

Through last night, Nexis results show Ben Carson’s name has appeared in The New York Times 373 times: 356 times as Ben Carson and 17 times as Benjamin Carson. On first reference (that is, the first time he is named in the story) he has been referred to as “Dr. Ben Carson” or “Dr. Benjamin Carson” 32 times, plus an additional 13 times on second reference. He’s been called “Mr. Carson” on second reference 57 times.

By contrast, Jill Biden’s name has appeared 61 times. Seven of those times, she was referred to as “Dr. Jill Biden” on first reference and another seven times on second reference. Only twice has she been called “Mrs. Biden” on second reference. (The Times has never referred to her as “Ms. Biden,” so it isn’t simply a matter of preferring a less patriarchal terminology.)

Comparing those head-to-head, Ben Carson has been called “Dr.” in 12.1 percent of the Times stories in which his name appears. Jill Biden has been called “Dr.” in 23.0 percent of the stories in which her name appears. Ben Carson has been called “Mr. Carson” in 15.3 percent of the stories in which his name appears. Jill Biden is called “Mrs. Biden” in just 3.3 percent of the stories in which her name appears.

The contrast is even starker on New York Times blogs, which are more informal and thus should have less need for honorifics at all. Jill Biden’s name has appeared on Times blogs 58 times. She’s been called “Dr.” on first reference 28 times and then once more on second reference. She’s been called “Mrs. Biden” on second reference four other times.

Ben Carson’s name has appeared in Times blogs 191 times (five of them as “Benjamin Carson”). He’s been called “Dr.” on first reference 11 times and on second reference six other times. He’s been called “Mr. Carson” on second reference 66 times – including, most puzzlingly, twice when he was separately referred to as “Dr. Ben Carson.”

Thus, head-to-head, we see that Times blogs refer to Jill Biden as “Dr.” nearly half the time (48.3 percent) while referring to Ben Carson as “Dr.” just 8.9 percent of the time. She is called “Mrs. Biden” just 6.9 percent of the time, while he is called “Mr. Carson” 34.7 percent of the time.

Putting both the Times and the Times blogs together, you get graphics that look like this:

So there it is. Biden is three and a half times more likely to be called “Dr.” on first reference and twice as likely to be called “Dr.” on second reference as Ben Carson. Carson is four and a half times more likely to be called “Mr.” as Biden is to be called “Mrs.”

The simple – and, no doubt, at least partially accurate – explanation for these findings is political bias on the part of the notoriously liberal New York Times. A more sinister explanation could be inferred that Carson’s race played a role. Is there any other potential explanation?

Actually, there is, but to explain it requires getting a bit into the nuts and bolts of how journalists use “style.” The Associated Press Stylebook and Briefing on Media Law – sometimes dubbed “the bible of journalism” – sets the template for questions of grammar, punctuation and style for most, though not all, U.S. print publications. One very notable exception is, of course, The New York Times, which sets its own in-house style guidelines that deviate in a number of key respects from those of the AP.

To casual readers, the most notable difference is the Times‘ use of honorifics. Thus, if a John Smith were to be quoted multiple times in a story, the Associated Press would, after that first mention, refer to him simply as “Smith.” The New York Times will refer to him as “Mr. Smith.”

The style guidelines on honorifics also differ in whether and in what way one acknowledges courtesy titles, such as “doctor.” In the AP Stylebook, the entry reads:

Use Dr. in first reference as a formal title before the name of an individual who holds a doctor of dental surgery, doctor of medicine, doctor of optometry, doctor of osteopathic medicine, doctor of podiatric medicine, or doctor of veterinary medicine: Dr. Jonas Salk.

Later in the entry, the AP also notes that:

If appropriate in the context, Dr. also may be used on first reference before the names of individuals who hold other types of doctoral degrees. However, because the public frequently identifies Dr. only with physicians, care should be taken to ensure that the individual’s specialty is stated in first or second reference. 

And finally:

Do not continue the use of Dr. in subsequent references.

Though the entry does, in fact, permit the use of the title “Dr.” before the name of an individual with a doctorate (a point on which even many editors who enforce AP style sometimes are confused) it clearly discourages the practice. And with either type of doctor, the rule is equally clear that you do it just the first time you mention the person in the story.

For its part, The New York Times style guide offers this:

Dr. should be used in all references for physicians and dentists whose practice is their primary current occupation, or who work in a closely related field, like medical writing, research or pharmaceutical manufacturing: Dr. Alex E. Baranek; Dr. Baranek; the doctor. (Those who practice only incidentally, or not at all, should be called Mr., Ms., Miss or Mrs.)

Anyone else with an earned doctorate, like a Ph.D. degree, may request the title, but only if it is germane to the holder’s primary current occupation (academic, for example, or laboratory research). For a Ph.D., the title should appear only in second and later references.

Aye, there’s the rub. The “whose practice is their primary current occupation” bit is important, as Ben Carson formally retired as a neurosurgeon in July 2013. For any stories about him in the months since, during which he was first a motivational speaker and conservative activist and then – for the past six months – a declared candidate for president, it would be in keeping with Times style to refer to him as “Mr.” and not “Dr.”

But hold the phone just a moment. That doesn’t let the Times off the hook quite yet.

There is, first, the issue that the Times style guide explicitly commands that “[f]or a Ph.D., the title should appear only in second and later references.” Now, technically, Biden doesn’t even have a Ph.D.; she has an Ed.D. But leaving that aside, as the graphic above illustrates, she’s referred to as “Dr. Jill Biden” on first reference nearly one-third of the time that she’s mentioned in Times articles or blog posts, in direct contravention of the house rules.

Moreover, the honorific is supposed to be granted “only if it is germane to the holder’s primary current occupation.” Jill Biden is a retired teacher, just as Carson is a retired doctor. (She taught public high school for 13 years; she does continue as a professor at a community college in Virginia). Her “primary current occupation” almost certainly is serving as second lady, but one could (and Times writers and editors no doubt would) also point to her role as president of the Biden Breast Health Initiative, a nonprofit devoted to breast-cancer awareness. In neither role is her doctor of education degree terribly germane – at least, no more germane than mentioning that a particular CEO also holds a law degree or MBA, which the Times would almost never do.

Even if one is charitable about the many times she was referred to as “Dr. Jill Biden” in political and national desk stories where only her status as second lady was actually relevant, Biden has received the title on first reference in stories from the style desk, on the ArtsBeat blog and even on the Bats baseball blog. In none of these cases is her status as a doctor of education even remotely relevant.

Incidentally, our prior second lady, Lynne Cheney, holds a Ph.D. in British literature from the University of Wisconsin at Madison. By my count, her name has appeared in The New York Times or its blogs 293 times. She has been identified as “Dr.,” on either first or second reference, exactly zero times.

But what’s more, even if we confine the analysis solely to how the Times identified Carson before he retired, we still find the paper is more likely to signify that Jill Biden is a doctor:

For stories that appeared in the Times or Times blogs through July 2013, Carson was referred to as “Dr.” on either first or second reference 29.6 percent of the time. Jill Biden has been referred to as “Dr.” on either first or second reference 35.3 percent of the time.

That’s despite the fact that Carson, who first graced the pages of The New York Times in a September 1987 story about his successful separation of Siamese twins, would spend at least the next 25 years of his public life known only as a doctor, with no political profile at all.

Finally, I would like to add two other factors that I think likely have some explanatory power here:

  1. Many Times writers, knowing only that Jill Biden is somehow involved in breast-cancer issues, likely have the mistaken belief that she really is a medical doctor, and have just never bothered to investigate the matter.
  2. Many Times editors are just, quite frankly, pretty crappy about remembering and enforcing their own house rules.
This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

The many, many, many flaws of CISA

October 27, 2015, 8:47 AM

There are two basic problems with the so-called Cybersecurity Information Sharing Act, which is scheduled for possible amendment in the Senate on Tuesday. The first is everything the bill, generally approved by the Senate last week, does. The second is everything it doesn’t do.

The bill is so obviously badly written—with overly broad, ill-defined language—that the privacy and consumer groups that long have opposed it increasingly are finding allies in tech companies like Apple, Twitter, and Google, which have gone public with their own opposition. (Disclosure: My employer, R Street Institute, is on record as opposing CISA. So are many of my previous employers and colleagues, including the Electronic Frontier Foundation and the Wikimedia Foundation.)

In effect, the bill aims to sidestep search warrants and other pesky due-process limitations on government by giving technology companies a motive to “share” what it calls “cyber threat indicators” to the Department of Homeland Security. S. 754gives tech companies—which receive troves of data from Internet users—huge incentives (like protection from legal liability) for “voluntarily” sharing these potential “cyber threat indicators” with government agencies.

What’s a “cyber threat indicator”? Section 2 of the bill (full text here) offers a definition so broad that it’s hard to be certain, even after multiple rereadings, what this term doesn’t include. It appears to cover any “information” that would “describe or identify” any “method of causing a user with legitimate access to an information system or information that is stored on, processed by, or transiting an information system to unwittingly enable the defeat of a security control or exploitation of a security vulnerability.”

This language could apply to anything. Example: I already have lawful access to my own computers. But what if someone writes up a cautionary note about how to delude me, perhaps through a phone call, into voluntarily giving over my passwords to these systems. She then sends it to me by private email so I can check whether she’s right. But if she does so, isn’t she describing or identifying a method to cause me, with my legitimate access, to defeat my own security-control tools? The law would allow Google (my email provider) to voluntarily share that private email with DHS. That seems like a bad, unintended outcome.

And as Robyn Greene of New America’s Open Technology Institute explains in detail, other provisions extend the scope of this new kind of surveillance well beyond “cybersecurity”:

[T]he bill would also let law enforcement and other government agencies use information it receives to investigate, without a requirement for imminence or any connection to computer crime, even more crimes like carjacking, robbery, possession or use of firearms, ID fraud, and espionage. … While some of these are terrible crimes, and law enforcement should take reasonable steps to investigate them, they should not do so with information that was shared under the guise of enhancing cybersecurity.

(Disclosure: New America is a partner with Slate and Arizona State University in Future Tense.)

So CISA is expansive about what kinds of information companies would be motivated to share with government agencies. But it provides scant justification for this “sharing.” But “sharing” is plainly a euphemism for surveillance, enabling bulk collection of Internet data that, because it begins with private companies, wouldn’t even require the kind of broad legal authorities that, for example, the Foreign Intelligence Surveillance Act provides.

What CISA doesn’t clearly do is actually prevent or deter Internet crime or espionage. National security expert Patrick Eddington at Cato has pointed out that there’s little evidence that that “sharing cyber threat indicators” will enhance Internet security.

And how would the “shared” information be protected? Given the massive data breach at the federal Office of Personnel Management, maybe it’s not a great idea to give “cyber threat indicators” in bulk to government agencies that have failed to put good security measures in place.

Nor are private companies necessarily any better. Even the Brookings Institution’sRichard Bejtlich, who has testified in previous years in favor of this kind of “voluntary” surveillance, legislation, has been walking back his pro-“sharing” boosterism this year. As Bejtlich wrote in January:

A company with little to no security, focused only on its core business functions, is not going to put threat intelligence to effective use. Until [a] company invests in sound defensive strategy, processes, people and technology, no amount of information sharing will help it.

Worse still, CISA’s liability protections may actually reduce a company’s incentives to clean up its security. As Mike Masnick at Techdirt puts it: “[F]or many companies, the bill just looks like a ‘get out of court free’ bill—because the entire focus is on protecting those companies from liability.”

Drew Mitnick of Access Now underscores that companies cooperating under CISA aren’t just protected from prosecution; they’re also protected from regulators, in exchange for working collaboratively to collect and report information on user behavior. “The transparency requirement,” Mitnick told the Guardian, “is so narrow that, if you met the requirements within the bill to get protection, it would give [participating companies] broad range to collect data and then send it to the government.”

But if CISA is so pro-company, why have some big companies—first through their trade associations and now, more directly, through their official statements, decided to come out against CISA in particular? “We don’t support the current CISA proposal,” Apple said in a public statement last week, adding that “The trust of our customers means everything to us and we don’t believe security should come at the expense of their privacy.” And Dropbox’s head of global public policy told the Post that even though “it’s important for the public and private sector to share relevant data about emerging threats, that type of collaboration should not come at the expense of users’ privacy.” The Washington Post’s Brian Fung provides a run-down of tech-company opposition to CISA. As Masnick puts it, “[s]ome companies take a more long-term, customer- or public-centric view of things and recognize all [CISA’s flaws].”

Since this summer, the growing opposition to CISA among all sectors has been so remarkable that it’s difficult to explain how the bill has advanced so far with so little effort to address its problems. Part of the answer has been the unstinting, consistent support for CISA from the U.S. Chamber of Commerce, which perceives the bill as a big win for American companies on the liability front.

CISA is one of the few occasions when stakeholders on all sides of the these issues—not just tech companies, privacy groups, and consumer groups, but even some cautious criticism within the DHS itself—find themselves in agreement that CISA’s hastily crafted, overbroad language needs to be reconsidered and revised. DHS’s criticism, produced in response to a formal query from Sen. Al Franken, is particularly damning:

While the Cybersecurity Information Sharing Act seeks to incentivize non-federal sharing through a DHS portal, the bill’s authorization to share with any federal agency ‘notwithstanding any other provision law’ undermines that policy goal, and will increase the complexity and difficulty of a new information sharing program. …

The authorization to share cyber threat indicators and defensive measures with ‘any other entity or the Federal Government,’ ‘notwithstanding any other provision of law’ could sweep away important privacy protections, particularly the provisions in the Stored Communications Act limiting the disclosure of the content of electronic communications to the government by certain providers.

If DHS, of all agencies, thinks maybe your legislation undermines other privacy laws, including the Stored Communications Act (aka the Electronic Communications Privacy Act), isn’t that a good reason to slow down, Congress? More importantly, DHS has put its finger on precisely the issue that always has bugged me about CISA: Why have we focused so hard on reforming a three-decades-old email privacy lawand the Patriot Act if we’re going to pass a wholly separate law that erodes those reforms? That “notwithstanding” provision is the clearest thing in an unclear bill; it says that, regardless of what other laws Congress has passed that limit surveillance, Congress now plans to undo those limitations.

The Senate amendments process, set to begin Tuesday, is a chance to raise some of these issues, but hardly all of them. The Center for Democracy and Technology has provided a handy guide to possible CISA amendments that will be brought up on Tuesday, but even CDT seems implicitly to have acknowledged that CISA as a whole holds a first-class ticket on a bullet train toward passage.

Still, the amendments debate Tuesday will give us a few more opportunities to raise objections to overall CISA’s surveillance-friendly language and design. And even if the Senate bill passes in some form, it still will need to be harmonized with its House counterpart in conference committee. For who have problems with CISA’s text or its larger framing of cybersecurity problems, decidethefuture.org will let you email, tweet, or call your senator, while faxbigbrother.com offers a similar service via a decidedly less-fashionable communications platform. Given sufficient outcry, perhaps lawmakers will send CISA back to the drawing board.

The federal government’s information machine

October 26, 2015, 3:24 PM

The following piece was co-authored by John Maxwell Hamilton is a senior scholar at the Woodrow Wilson Center for International Scholars and on the faculty of the Manship School of Mass Communication at Louisiana State University.

Should we raise the minimum wage? That is a subject worthy of fair and square political debate, which it is receiving in the opening weeks of the presidential primary season. But how would you feel if you learned the Obama administration is using your tax dollars to persuade you to support such federal legislation?

Well, it is. The Department of Labor has been conducting a media campaign for months. It has a webpage devoted to the topic, which proclaims: “See how raising the national minimum wage will benefit America’s workers.” Web surfers are invited to tell the Labor Department why they support raising the federal minimum wage. Twitter users can see a video of a squiggle of mustard spelling out “#RaiseTheWage” on a hot dog, an obvious reference to the recent advocacy to pay fast-food employees more money. Notably absent from Labor Department’s public relations campaign are any indication that a higher minimum wage–like any policy–will come with costs. It is all hortatory.

The Labor Department’s actions may draw fire from Capitol Hill. Federal law forbids the government from using its information apparatus for partisan purposes and “grassroots lobbying.” The rationale for this goes to a fundamental democratic issue. The executive branch should not be able to use the government’s lopsided communications advantages – paid for by taxpayers – for political propaganda. In this instance, America’s minimum wage is set by Congress, and there is legislation pending to boost it.

But if the Labor Department is called out this time–perhaps because an article like this draws attention to its media activities–it will be exceptional.

While many fret about government bureaucrats excessively wielding their “secret” stamps to withhold information and worry about the National Security Agency collecting personal data on citizens, government propaganda carries on every day, throughout the bureaucracy, with barely a ripple of distress from any quarter.

One reason this activity is difficult to monitor is that the government puts out so much information on a daily basis. This is best understood as the “third dimension” of government information, a term we use to distinguish the activity from government efforts to classify information or collect data on individuals, activities that also can lead to abuses and are difficult to police. In fact, there are more safeguards for the other two dimensions than for the third, for which there are no reporting or monitoring requirements.

Start with advertising. In 2014, the government spent $760 million to hire private advertising firms, according to USASpending.gov. The contracts purchased advertising space on all forms of media (television, radio, billboard, etc.), marketing research and opinion polling, Mad Men-type message-crafting assistance and more.

Advertising is only a tiny part of the third dimension. That $760 million figure does not include the salaries of the innumerable bureaucrats who promote their agencies’ work in print, on-air and online. It does not include the multimillion dollar anti-drug media campaigns, or the cost of printing and publishing reports and government journals, such as the Federal Highway Administration’s Public Roads magazine. Speaking of publishing, the Government Publishing office, which costs $110 million to operate, has more than a million publications online.

The Internet has only made it easier for the government to reach out and touch the public. Not long after President Obama arrived in office, his administration carried out an audit of federal government websites. They found 24,000 of them. Federal agencies have swarmed social media. The Department of Commerce has a YouTube channel. The Environmental Protection Agency – to name just one of the 120 government agencies – has about two dozen Twitter accounts. The EPA has tweeted more than 11,600 times since 2008, or about 4.5 times every day of the week. Almost every agency has one or more blogs.

Government agencies have been pumping out information that verged on propaganda since the earliest days of the Republic. Treasury Secretary Alexander Hamilton’s report on manufacturing (1791) promoted policies to grow the nation into a commercial republic. From time to time, Congress has attempted to curb executive agencies’ persuasive communications.

In 1913, it passed legislation forbidding, without its express approval, the expenditure of appropriated funds on “publicity experts.” Several years later, it banned agencies from spending funds on media intended to foment public pressure on Congress. And each year, appropriations bills forbid agencies from spending funds for “publicity or propaganda purposes.”

But this has done little good. Mordecai Lee, one of the few scholars to pay any attention to this issue, notes that agencies have given their communications staff different titles, such as “public affairs specialist,” and renamed their work “outreach” and “public education.”

The major turning point in government propaganda came in World War I. The government grew in order to fulfill war aims, and so did its desire and ability to mobilize American public opinion. The chief agent of this was President Woodrow Wilson’s Committee on Public Information. It was the first government entity to attempt to systematically shape the views of American and foreign audiences, through news releases, posters, speakers, films and ads, as well public affairs officers in embassies. Some of its work was done covertly. The CPI was abolished at the end of the war, but the new norm was here to stay: the government was in the persuasion business, which has taken on proportions that even its creators find difficult to control.

A few years ago, the vice chief of staff of the Army, General Peter W. Chiarelli, set out to determine how many people were involved in strategic communications. “Stratcom,” as it was called, had been expanded by Secretary of Defense Donald Rumsfeld and was considered by many people to be shorthand for policy advocacy and spin. “Couldn’t do it,” a military chief public affairs officer told me of Chiarelli’s study. Many working on strategic communications held unrelated job titles. Commanders did not cooperate. Senior officers relied on these people to promote their programs, as well as themselves, and feared that Chiarelli would eliminate the positions.

Not all of the third dimension works against democracy. In fact, most government communication is essential to open, transparent government. We want to know who receives government contracts, which the Federal Register (a child of the Committee on Public Information) tells us. We need data on trade or unemployment to make good economic decisions. Our quality of life is enhanced by the National Weather Service’s reports and Smokey Bear and the various public service announcements can remind us to be a little more sensible.

But as the Department of Labor’s wage campaign shows, it is all too easy for government officials and bureaucrats to step over the line between informing and propagandizing. Congress occasionally tries to rein in agencies a little. The Taxpayer Transparency Act of 2015 would force agencies to label their ads and media as government-produced, which agencies do not always do. This reform would be even more helpful if it required agencies to cite and share the sources for their “facts.” Where, for example, are the DOL data that prove hot dog venders earn less than $9 an hour?

Something more fundamental and systematic is needed: an assessment of the size of the third dimension. Congress should direct agencies to annually inventory the number of public communications they produce, the number of staff who assist in communications, and the approximate cost. These reports should additionally reference whatever laws authorize agencies to communicate with the public and for what purposes. All these data should be submitted to the Government Accountability Office, which can audit the data and then publish publicly an overall inventory of government public communications.

This is only a start, of course. But it would be a big step ahead of where we are now. Just as setting the federal minimum wage is a ripe subject for energetic political debate and decision-making, so too is the third dimension. The use of our tax dollars to shape our views is too important to be left in the dark shadows of government.

Shoring up Florida’s property insurance market

October 26, 2015, 9:53 AM

Hurricane Wilma’s Oct. 24, 2005, landfall in Collier County capped an historic two-year period during which Florida reeled under the unrelenting blitz of seven back-to-back major hurricanes. Six of these storms were, at the time, among the 10 costliest ever to strike the United States.

Florida has subsequently enjoyed a hurricane-free decade, representing the longest period on record without a tropical cyclone making landfall in the state. There are no meteorological explanations as to why Florida has experienced this unprecedented streak of good luck. Florida’s position as a low-lying tropical peninsula jutting 500 miles into the most hurricane-active waters in the world is the same today as it was 10 years ago or 100 years ago. Indeed, many scientists believe climate change will only increase the severity and incidence of storms in the future.

While the state’s geography and risk profile haven’t changed, its built environment and the number of lives and amount of property at risk of hurricanes have grown dramatically. Though the state’s population shrank slightly during the Great Recession, it has almost tripled since 1970 and is continuing to grow. At more than 19.9 million residents, Florida recently surpassed New York to become the third-most-populous state in the nation. Florida’s total coastal exposure now stands at more than $2.9 trillion, with more property at risk than all of the other “hurricane alley” states (Louisiana, Virginia, Texas, North Carolina, South Carolina, Georgia and Mississippi) combined.

This concentration of population and property in high-risk coastal areas, in addition to the costs associated with the 2004 and 2005 storm seasons, all contributed to property insurance premium increases in the years following Wilma. As of 2012, the average Florida homeowner’s property insurance policy premium was $2,084, more than double the national average of $1,034.

More recently, however, events in the global financial markets have had a transformative effect on Florida’s property insurance market. In the aftermath of the 2008 financial crisis, global investors began looking for ways to diversify their portfolios. They discovered that gains or losses in the catastrophe and reinsurance markets were not tied to global economic cycles. In short: hurricanes, earthquakes and other catastrophes strike at random, uncorrelated with the ups and downs of the rest of the economy.

This has resulted in capital flooding into catastrophe markets, which in turn have produced new and innovative risk-transfer products and seen fierce competition among traditional reinsurers. Primary insurers have been able to write more policies, as they are able to transfer more risk to the private reinsurance market at affordable rates. Despite major losses in Japan and elsewhere in recent years, experts believe global reinsurance pricing will continue to soften. Indeed, the catastrophe market is so awash in capital that many reinsurers have announced stock buybacks to return cash to investors, as they simply can’t find enough opportunities to deploy capital profitably.

Florida has benefited handsomely from this “buyers’ market.” The state-run Citizens Property Insurance Corp., for instance, has shed more 1 million policies since 20129 and lowered its overall exposure by more than 60 percent over the past four years. This is due, in large part, to the organic migration of policies to private companies. In 2014 alone, 416,623 Citizens policies were transferred to private companies through Citizens’ depopulation program. Citizens projects that its policy count will be slashed to no more than 450,000 policies by year-end 2016, from a high of 1.5 million in 2012.

Additionally, Citizens itself has taken advantage of low reinsurance rates to transfer some of its enormous hurricane risk to the private market. This investment has almost completely eliminated the once-ominous threat of assessments on state taxpayers. In 2014, Citizens transferred $3.27 billion of its coastal risk to private reinsurers for about $216 million; this year, the total was more than $3.9 billion of risk transfer, at a cost of just $201 million. In sum, Citizens bought $640 million more in reinsurance protection for about $15 million less.

The Florida Hurricane Catastrophe Fund (Cat Fund) also has taken advantage of historically low global reinsurance rates. In early 2015, the State Board of Administration (SBA) approved a $2.2 billion risk-transfer package, which included $1 billion in reinsurance protection.

Provided that Florida’s unprecedented hurricane “drought” extends through the remainder of the 2015 season, the Cat Fund expects to hold an estimated surplus of $12.8 billion, the result of 10 years of fair-weather hoarding. Coupled with its purchase of reinsurance and pre-event bonds, this surplus has for the first time allowed it to be fully funded up to its $17 billion statutory limit without the need for post-hurricane debt or, by extension, taxpayer-funded assessments.

Government has a responsibility to foster a competitive environment among private insurers. To do so, it must regulate the industry sensibly in ways that ensure consumers’ legitimate claims are fully paid in a timely manner. However, a healthy and affordable property insurance market may also be greatly helped or hindered by forces like nature and the global economy, which lie completely outside the control of politicians, insurance companies or policyholders. In this vein, fortune has greatly favored Florida over the past decade.

Ten years ago, Floridians were recovering from the unprecedented series of hurricane strikes and reeling from high insurance and reinsurance rates. No one at the time could predict the state would be granted an unprecedented, decade-long reprieve by Mother Nature, while simultaneously enjoying the most favorable global reinsurance and catastrophe market in memory.

Yet despite this remarkable streak of combined luck, average property-insurance premiums are still on the rise in some parts of Florida. Consumers have legitimate concerns when they ask why this is the case, when insurance companies have had a decade to save up for the next strike.

It appears human behavior and cost drivers disconnected from the state’s most obvious risk factors continue to drive some insurance rate increases. According to the New York-based Insurance Information Institute, non-catastrophe claims have increased roughly 17 percent per year over the past decade, and are growing rapidly both in frequency and in severity.

Storm insurance reforms still needed, expert says

October 26, 2015, 9:27 AM

From FloridaPolitics.com:

The James Madison Institute and R Street Institute released a policy brief last week,”Shoring Up Florida’s Property Insurance Market,” in which the organizations argue for the Legislature to pass reforms to “eliminate cost drivers and ensure fiscal stability in an active storm season.”

“Florida’s total coastal exposure now stands at $2.9 trillion, with more property at risk than all of the other ‘hurricane alley’ states combined,” said the brief’s author, R.J. Lehmann, R Street co-founder and an adjunct scholar at the James Madison Institute.


15 reasons CRS reports should be public

October 26, 2015, 7:00 AM

I worked at the Congressional Research Service for 11 years as an analyst and manager. I greatly enjoyed supplying congressional staff, committees, and members of Congress with nonpartisan research and advice. I got to help conceptualize legislation, assist committees with hearing preparation and testify before Congress. It was fun, heady work.

I also wrote a lot of CRS reports, as did my beloved colleagues. Each year, the agency publishes about 1,000 reports, which cover general subject matter, like advertising by the federal government and cloture in the U.S. Senate. Congress, not the CRS, owns them. That means nobody at the CRS is free to distribute its reports to anyone outside Congress – not without jumping through bureaucratic hoops.

Unfortunately, our national legislature, as a matter of practice, does not publish all CRS reports in one place, like Congress.gov. CRS reports get posted here and there on various congressional webpages. Additionally, any member or congressional staffer can share reports with the public ; it’s a congressional prerogative. As a result, there are CRS reports floating all over the Internet. By one count, there are 27,000 CRS reports scattered over 1,400 U.S. government websites.

It is a bizarre situation: there is not de jure public release of CRS reports, but there sorta is de facto publication.

This policy is irrational, inefficient and costly. With the help of some animated GIFs, here are 15 reasons Congress should release all CRS reports to the public:


  • Taxpayers pay more than $100 million to operate the CRS. It only seems fair that they have easy access to CRS reports. But they do not.

  • Beltway insiders easily can access CRS reports through pricy subscription services and get them from people who work on Capitol Hill. The average American cannot. This is grossly inequitable.

  • CRS reports do not contain classified, sensitive or secret information. No harm can come from their release.


  • The Internet is awash in lies and half-truths about government. CRS reports carry nonpartisan, factual descriptions and analyses that explain government agencies and programs. CRS also publishes guides that explain how Congress works. Making CRS reports widely available, then, can serve as an antiseptic to the toxic rumors and misinformation.

  • The media often get things wrong. Allowing broader access to CRS reports would help media avoid needless errors.


  • I have seen members of Congress hold up a CRS report and then mischaracterize its contents. Broad public access to CRS reports would increase the odds of such deception being exposed.



  • Expanding public access to CRS reports is not a partisan issue. It is good government and a matter of fairness. There is bipartisan support for publishing CRS reports on House.gov or one of the other public congressional websites. Reps. Leonard Lance, R-N.J. and Mike Quigley, D-Ill., are the most recent advocates.

  • Forty diverse groups, including those representing librarians, scientists and civil-liberty advocates, support more equitable public access to CRS reports.

  • Contrary to the claims of some individuals, there never has been a policy that CRS reports must stay secret. For decades, Congress has been releasing some CRS to the public. This 1979 CRS annual report shows dozens of CRS reports published as congressional committee prints or introduced into the Congressional Record.

  • Making CRS reports more widely available to the public will not hurt their quality. Rather, it may well improve them, as CRS experts will be freed to share them with outside experts for feedback. That is how experts learn more and produce better work. Besides, CRS already produces information for public consumption, such as the Constitution Annotated, the bill summaries found at CRS.gov, a 400-page volume called The Evolving Congress and even debate materials for high schoolers.

CRS.gov, the Congress-only website where CRS posts its reports, went down for the better part of a week last summer. Congress lost all access to CRS reports. Backing up CRS reports to a public site like Congress.gov would increase the odds that 24/7 congressional access to CRS reports would be maintained.

Retired and former CRS employees with more than 500 years of CRS service signed a letter supporting public release of CRS reports.

The current policy is bad for CRS employees. They cannot freely share their work with peers in academia, think tanks and other research environments. Unlike experts at the Government Accountability Office and Congressional Budget Office, CRS employees cannot list their publications on their LinkedIn pages. CRS Managers, who have much better things to do, are forced to police the release of their analysts’ work, which sows enmity among employees.

Creating a public CRS reports website would save tons of congressional and CRS staff time. Right now, the public writes Congress when it has a problem, the congressional staffer contacts CRS and then a CRS analyst or research librarian will send over a copy of a CRS report that answers the constituent’s question. This is grossly inefficient. The public should be free and encouraged to seek answers to basic questions about government (e.g., “How much is spent on the Department of Agriculture yearly?”) from Congress.gov or another public website that carries CRS reports.

Libraries should not have to pay for government-produced information. But they do. They must pay private subscription services to access CRS reports.


The arguments against expanding public access are outdated and bogus. Congress can and should vote promptly to adopt a resolution, which would not need the president’s signature , to post CRS reports on Congress.gov or another public website. Doing so will cost nearly nothing and it will bring many benefits.

For further discussion of this subject, watch this October 2015 video of a bipartisan discussion on the merits of expanding public access to CRS reports.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.