I Don't Understand Insurance: Obamacare and Crop Insurance

From a Politico story on the improving profit picture for insurers in Obamacare markets:

Insurers in the Obamacare marketplaces spent 75 percent of premiums on medical claims in this year's first quarter, an indication the market is stabilizing and insurers are regaining profitability, according to a Kaiser Family Foundation study released this week. By comparison, in the prior two years, insurers spent more than 85 percent of premiums on medical costs during the same period, which translated into huge losses.

Insurers lose money when they spend 85 percent on medical costs? That means to me their administrative costs are 15 percent.  I'm no expert on crop insurance, but I think USDA doesn't support 15 percent in administrative costs.

Did a quick google search and found this CBO analysis of a proposal:

"This option would reduce the federal government’s subsidy to 40 percent of the crop insurance premiums, on average. In addition, it would limit the federal reimbursement to crop insurance companies for administrative expenses to 9.25 percent of estimated premiums (or to an average of $915 million each year from 2015 through 2023) and limit the rate of return on investment for those companies to 12 percent each year.b [emphasis added]

 My personal opinion is that 9.25 percent is still too high, at least that FSA could administer an insurance program at less cost, given a reasonable time and resources to gain expertise.

Good Luck, Qatar

The conflict between Qatar and the Arab states has included cutting off Qatar's supply of dairy products.  Qatar, having bunches of money, is now importing 4,000 cows to partially fill the gap, according to this piece.

I wish them well, but that's a more complex job than might appear:

• does Qatar have air conditioned barns for 4,000 cows--temps there are rather hot.
• does they have feed on hand for that many cows, and a supply chain to back it up.  Cows eat, every day, much of the day.
• do they have manure disposal facilities.  Cows defecate and urinate, every day, much of the day.
• do they have milking facilities and people to operate them?  Cows produce milk, every day.  Every day, that is, unless their routine is disrupted and maybe milkings are skipped--that can cut production quite a bit.
• do they have milk processing plants. Milk spoils unless refrigerated, and doesn't have a long shelf life.

The point, of course, is like most things, it's more complex than an outsider would assume.

But as I say, I wish them well, and hope the Qatari PETA is not on their case. 

Brooks: The Pictures We Have in Our Head

In some of the commentary on David Brooks column, or rather one paragraph in his column, I think I see some different answers to the question: who was Brooks' friend with a high school diploma?

I suspect most or all of those who commented saw her as a white woman, perhaps young, perhaps a contemporary.  If true, that shows our blinders.  IMHO it's quite as likely that she's a minority, perhaps given his social milieu an immigrant. I'm further dealing in stereotypes when I suggest that a well-to-do media person is more likely to come into contact with an immigrant in his/her daily life than with a white person with only a high school diploma.  It would be interesting to know more, but for me the bottom line is his example doesn't do the job he wants it to in his column.  On the other hand, the fact that all of us commenters focused on that one paragraph rather than his more general point suggests to me that we're guilty about our privilege and about pulling up the ladder behind us.

Etymology of "Quarters"

Speculation based on the first chapter of  the Lyndal Roper book: "Martin Luther: Renegade and Prophet".  My logic:

• towns tend to be located at the intersection of trails/paths/roads.
• most such intersections are of two roads
• most such intersections divide the town into "quarters"
• hence "quarter" originally referred to one of four areas of the town in which one lived.

Posting this here because this website wouldn't allow me to contribute my 2 cents.

The book promises to be good, BTW.

David Brooks and American Class Strata

David Brooks has an op-ed in the Times today outlining many ways in which he sees the richest among us making sure that others don't move up and join them. The basic idea is that once you have some money, you invest and invest and invest in your children.  It's an arms race among parents, and the richest have the most arms (pre-K education, elite college admissions, restrictive zoning, etc. etc.).  To me it all seems fairly obvious.

Brooks is catching flak on twitter and elsewhere, however, for one paragraph:

"Recently I took a friend with only a high school degree to lunch. Insensitively, I led her into a gourmet sandwich shop. Suddenly I saw her face freeze up as she was confronted with sandwiches named “Padrino” and “Pomodoro” and ingredients like soppressata, capicollo and a striata baguette. I quickly asked her if she wanted to go somewhere else and she anxiously nodded yes and we ate Mexican."

 What Brooks is getting at, which is lost in the twitter comments, is there's lots of less visible barriers to advancement, particularly for those of us who are a little less socially adept in adapting to our surroundings, and picking up on social cues. 

Where I disagree with Brooks is his history.  America has always had a class structure.  See Edith Wharton's fiction for one.  The ways in which the structure is maintained may have changed over the years; that's something Brooks should have acknowledged.

Double Standard

I'm seeing Althouse and Powerline blogs push back against the importance of the Donald Trump Jr. meeting with the Russians to get dirt on the Clinton campaign.  Back in the day of Clinton/Gore the right was outraged over the campaign accepting money from foreigners, and I remember Powerline being exercised in 2008 when the Obama campaign seemingly did not tightly screen donations to weed out foreign money.

So their standard is:  foreign money is bad, foreign info is good?

Technology on the Farm

Interesting NBCnews overview of new technology on the farm.

Conaway and the Farm Bill

Politico has a post on the discussions between Rep Conaway, House Ag head, and Rep. Black, House Budget head.

Sources with knowledge of the discussions say that the agriculture committee was initially facing around $70 billion in proposed cuts over the next decade, but Conaway's intervention kept the pullback to around $10 billion. That came after Black lowered her original goal for total mandatory spending cuts by roughly $300 billion, and Conaway persistently made the case that slashing programs under his watch would imperil the 2018 farm bill and, by extension, farmers, rural constituents and low-income Americans struggling to make ends meet.

The Importance of the Bureaucracy

Vox says the White House failed timely to book a Hamburg hotel.  Just a reminder that smooth operations depend on lots of people doing their bit, people called bureaucrats.  We don't know where the breakdown was.  I could imagine someone being turned off by Trump and not taking the initiative to remind the chain of command that booking a hotel was necessary.  I could imagine a vacancy in the usual chain of command for travel arrangements, perhaps a failure of liaison between the White House and State.  I could imagine a Trump appointee in the White House just not knowing, not having been informed, or forgetting to book a hotel, just because it's their first time and the Harshaw Rule is: Never do things right the first time.

Amish Organic Farmers and Steel-Wheeled Tractors

Washington Post has a good article on a group of Amish dairies in Iowa who are producing organic milk, but who are being undercut by what they view as illegitimate "organic milk" from large dairies.  This is a sequel to an earlier article where the Post challenged some large dairies, trying to prove by analysis of the milk and data on the operations that the cows could not be grazing as much as is required by USDA regs in order to be labeled "organic".

That's a valid challenge.  And the Amish seem eminently qualified to produce organic milk, given their religion-based resistance to technology.  It fits their "small" farms (under 100 cows, which still seems large to me).

I've followed the Amish story for a long while, ever since I served on a task force in the 1970's with the county executive director of the Lancaster County ASCS Office, who would describe the ins and outs of their relations with government programs.  Donald Kraybill has been a major source of my knowledge of the Amish, and the lines they draw of acceptable and unacceptable technology.  I still remember pictures of a horse-drawn baler.

This article was accompanied by a picture of a steel-wheeled tractor being used on an Amish farm, which would seem to show this group of Amish pushing out the boundaries of acceptable technology.  What's ironic to me is that horses fit nicely into organic agriculture--they can eat the oats which form part of an acceptable crop rotation.  The switch from horses to tractors in the Midwest from 1930 to 1955 also meant a loss of the market for oats.  So while the Amish have a valid complaint against large dairies on the one hand, on the other they're slowly acceding to the forces which undermined our organic agriculture of the 1930's.