I wrote previously of Occupy Wall Street’s plan to buy and forgive distressed consumer debt. A commentator on that post noted that it created a tax issue, and a colleague agreed it was a risk. A fuller treatment of the problem, and some instant revisionist thinking about the ‘Jubilee’ program in general is over at the excellent Naked Capitalism blog, Occupy Wall Street’s Debt Jubilee: A Gimmick with Tax Risk.
Like most of the things they run, well worth a read.
This is very cool: The People’s Bailout — Occupy Wall Street plans to buy distressed consumer debt for pennies on the dollar … and then forgive it.
OWS is going to start buying distressed debt (medical bills, student loans, etc.) in order to forgive it. As a test run, we spent $500, which bought $14,000 of distressed debt. We then ERASED THAT DEBT. (If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A MORE AWESOME GAME.)
This is a simple, powerful way to help folks in need — to free them from heavy debt loads so they can focus on being productive, happy and healthy. As you can see from our test run, the return on investment approaches 30:1. That’s a crazy bargain!
Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program LIVE and NATIONWIDE, buying debt in communities that have been struggling during the recession.
As Rafe Colburn says “Incredible example of hacking the system for positive change.”
The question is: What was the cost to the State of Florida due to the hours and hours spent waiting in line for early voting – delays due to misfeasance or malfeasance by Rick Scott, the Governor of Florida, and the state legislature (proprietor, Republican Party, State of Florida)?
My rough estimates makes it up to $190 million worth of lost time waiting in line — a cost placed on all Floridians because the state government couldn’t (or more likely, consciously chose not to) make decent provisions for early voting. Please check my math — corrections welcomed.
The basic shape of the calculation is pretty easy: we just have to multiply the following three numbers:
Cost = V * N * A
Where
V = Value of an hour of the average Floridian adult’s time
N = Number of early voters
A = Average wait time
Each of these numbers can be estimated with varying degrees of confidence. We won’t require precision – this is back-of-the-envelope stuff, we’re just trying to get the answer right well within an order of magnitude.
Value of an hour of the average Floridian adult’s time
According to the federal Bureau of Labor Statistics, the mean hourly wage in Florida is $19.59 1
So V=19.59 2
Number of early voters
There were 4,469,393 early voters of whom 54% voted early in-person making 2,413,472 persons (approx) who had to wait in lines (the rest voted absentee).
So N= 2,413,472 3
Average wait time
This is actually the hard one. For the in-person voters, wait times varied enormously by date, time of day, and geography. I know people who voted in an hour; I know people who waited over four hours. When I happened to look, data from Miami-Dade Elections showed various wait time at different polling places ranging from 20 minutes to six hours. Much of the cluster was in the 2-4 hour range though, so I think we should use those as our range. 4
So, A could be anything from 2 to 4; we should calculate the range.
Cost = V * N * A
Cost = 19.59 * 2,413,472 * [2 to 4]
Cost = $94,559,833 – $189,119,665
Rounding, to two significant figures (this is just the back of an envelope, remember) gives us a final cost range of $95 million to $190 million. All because Rick Scott and his gang foisted this giant ballot on us, and instead of making provisions for extra staff and voting times, cut the number of days for early voting.
(Thanks to IP for asking the question.)
Apparently, there’s a subsidy plan to use my premiums to pay private insurers to take over its policies. On the other hand powerful figures in the state GOP are lining up to support gifts to their friends.
My experience suggests the program isn’t necessary: although the program is not operating yet I’ve gotten my first letter of the post-hurricane season from a new, small, (fly-by-night?) insurance company called Homeowners Choice Property & Casualty (HCI) that has got me on its menu as “Take Out”.
“Take-out” is how Citizens refers to the policies cherry-picked by private insurance companies. And perhaps because I live relatively far from water and thus face less flood risk, I’m the cherry.
These letters follow a form. They have threats about how awful Citizens will be, threats founded in fact if skewed to the worst case. They are opt-out only: do nothing and I will be transferred to the new company about which I know nothing.
When I got the letter, HCI didn’t even disclose the terms of the policy they are offering me. Although the letter contains vague language about covering “other structures,” like gazebos, that I don’t happen to have, and mentions some “coverage options”, the real meat was supposed to be online. I was invited to go online to view financial info and see “a coverage comparison”. There is some financial information about HCI at Citizens’ “Take-out Companies” page, but when I visited last week, there was nothing about policy terms there. Checking back today, however, I find that there is now a summary coverage analysis document. Bottom line: very little difference — for now.
And of course there’s no reason to believe the premiums will be any less with any given company than with Citizens’: HCI is required to keep my policy for at least 10 years (unless they go broke first), provide “substantially the same coverage” as Citizens for the first three years, and limit rate increases to 10 percent per policy per year. Such comfort.
HCI’s homepage is not much use to me either. They tell me they are rated “A Exceptional” by Demotech, which is the rating agency for insurance companies too small to get a rating from AM Best. Looking at Demotech’s site, I find that “Exceptional” is only the third-best rating (everyone is waay above average here!), and means that according to some model (about which we are told nothing) Demotech thinks that 97% of the companies with this rating will be solvent 18 months from now. An A rating puts HCI in the top 70% of companies rated by Demotech. Yes, top 70%! (Not surprisingly, the Demotech ratings have been accused of being inflated.)
A little Internet searching tells me HCI just recently doubled in size by taking over policies from HomeWise, a failed insurance company. Was that before or after they got their rating?
Given that Governor Scott’s team, gripped by anti-government ideology, seeks to destroy Citizens Insurance by continually raising premiums and cutting coverage even though Citizens now has the $6+ billion reserves we always were told it would need to be solvent, I might actually be prepared to consider opting out some day despite my earlier reluctance. But I’d have to know what I was getting, and to have more confidence about the company I was going to than HCI has been willing or able to provide.
The track record so far for these insurance startups is sort of what I’d expect:
The granddaddy of onetime Citizens’ takeout companies, Poe Financial Group, was swamped with hurricane payouts and fell into Chapter 11 bankruptcy reorganization in August 2006 after storms caused more damage than it could cover. To pay for Poe, the state assessed everyone in Florida who buys homeowner or auto insurance. Lightning struck again with Magnolia Insurance, which was the biggest participant in a Citizens takeout program in 2009, the year before it went out of business. Another takeout firm, HomeWise Insurance Co., failed in 2011 and its policies were assumed by Tampa-based Homeowners Choice, which is the single-biggest takeout company participating in this round. Scott Wallace, the past president of Citizens Property Insurance, is now president of Homeowners Choice.
Looks like I’m opting out of this one too.
Update (10/11): Great article on some of the pros and cons of opting-out of Citizens from Tampa Bay Times. Where is the Miami Herald on all this? Fun fact: 30% of Citizens policy holders opted out last time letters went out — that’s a lot for an opt-out program. Citizens is cranking up the propaganda to reduce that number.
You may not recall The Great Gold Bar Hoax (Hoax?) from March, but it seems that ten more tungsten-filled supposedly gold bars have been found, this time in Manhattan, at least according to zerohedge’s Gold Counterfeiting Goes Viral: 10 Tungsten-Filled Gold Bars Are Discovered In Manhattan.
So far, the rot is limited to bars with one particular set of markings (Swiss Produits Artistiques Métaux Précieux (PAMP)), but zerohedge, which sees financial crises all the time everywhere, sees one looming for the gold trade. Unless of course, they warn, this is a false-flag op to discredit gold. But then again it might be a Chinese money-making plot.
At least there was something there; things could be even worse.
Hunger has grown sharply since the financial collapse of 2008, although it is felt acutely by a relatively small percentage of the population. In 2007, 12.2 percent of Americans experienced what the Department of Agriculture describes as “low food security,” including 4 percent who fell into the category of very low food security. By 2011, the percentage of those coping with low food security rose to 16.4 percent, and those experiencing very low food security went up to 5.5 percent.
The U.S.D.A. defines “low food security” as a lack of access “at all times to enough nutritious food for an active, healthy life.” It defines “very low food security” as individuals going without or with very little food “at times during the year because the household lacked money and other resources for food.”
Looked at through the calculus of contemporary partisan politics, the U.S.D.A. data demonstrates that in 2011 low food security was a problem for just under one in eight whites — a matter of concern but for many white voters, a virtually invisible issue. Very low food security affects the lives of only one in 24 whites.For African Americans, low food security is a problem affecting one in four, and one in ten experience very low food security. The percentage of Hispanics who experience low food security is higher than the percentage of blacks, although the percentage of Hispanics suffering very low food security is slightly lower.
Cf. Susie Madrak, Why Can’t Democrats Talk About Poverty? for more on this.
Recent Bluessky Posts
Jotwell Blenderlaw