My most conservative beliefs: Price controls suck and Federal deficit matters
📈 Trending Up: Open corruption … continued ass-kissing … Musk doubling down on his support for far-right German political parties … Israeli cybersecurity venture funding … selling AI picks and shovels … HMPV in India …
📉 Trending Down: Closed-source AI … my understanding of discrete venture rounds …
Theme Check
Podcasting: Cable news has long held too great a grip on elite conversation. By that I mean that folks in power care a lot more about showing up on CNN and Fox and CNBC than there is an audience of sufficient size on offer to warrant the focus.
A pet theory of mine is that social media clipping and resharing has helped keep cable news relevant and that cable news hits often do bigger numbers off-air than they do on any video livestream.
One thing that is not underestimated is podcasting. Much was made of the influence of bro, and bro-adjacent podcasts during the last election — but more than that, much like Reddit, there is a podcast out there for your niche interests. And that makes general, mass-appealing content like cable news less useful. Because why eat a whole meal if you really just want more carrots?
Enter Google. Which has made a new podcast-creating tool for users based on their interests. If Google manages to promote it properly, I reckon ‘Daily Listen’ could be a hit. (This is not the only personalized podcast offering from Google, natch.)
That doesn’t worry me, even if I pay my half of our nanny with my podcasting checks. But I do think the news makes it plain that machine aggregation and machine presentation of human-derived news is going to be A Thing for the rest of our lives.
Yet another technology product predicated on messy, blood-and-sinew-sourced journalism? Who would have thought.
Cybersecurity: I wonder what fraction of future inter-nation conflict will be entirely digital. After learning more about how far Chinese hackers got into critical American systems, here’s a story on how Japan is suffering similarly.
This is a place where tech folks could come together and do a lot of good for the nation. Cutting some costs by volunteering with DOGE? Sure, good on you. Securing the nation against hostile foreign governments who want to own the ability to turn off our grid? Now that would be an impact.
Price Controls Suck
When something goes wrong, people previously not engaged with the underlying causes/effects/details often learn quite a lot in a very short period of time. A current example of this is state-level insurance pricing and how the setup leaves much to be desired; fires plaguing the LA-area have taught a lot of people — seemingly for the first time — that states have a say in insurance pricing.
In Florida, for example, the Florida Office of Insurance Regulation has lots of power to regulate the state’s insurance market. It approves certain insurance rate increases, and at a set threshold — 15% — insurers can be hauled before a public rate hearing.
Local Florida reporting makes it clear that insurance companies are responsive to that threshold, often asking for 14.9% rate increases to derive more revenue while also not being forced to explain the full why. Mostly, if a rate increase is under the 15% mark, then it can get approved sans public notice:
Each company’s rate request is approved by regulators. When those hikes are less than 15%, regulators question the company behind closed doors, and the rate hikes aren’t publicly announced.
I do not have a view on whether or not the 15% rate hike rule is a reasonable threshold for public hearings or not. I simply want to note that that even in Florida, the patron state of the Tech Right, there’s a big governmental body that directly shapes the insurance market.
Even more, Florida has a centralized insurer-of-last-resort on its books. That group (Citizens) also wanted to raise its prices quite a lot, after admitting that it was effectively subsidizing the state home insurance market.
Details aside, prior GOP Presidential candidate hopeful and current Florida governor Ron Desantis does a lot to regulate the nitty and the gritty of insurance in his state.
That in mind, shitting on California for 1. Regulating insurance price increases and 2. Having a state-backed insurance provider of last resort is silly, unless you are ready to attack Florida and other states that have difficult insurance markets for doing the very same thing.
I haven’t seen a lot of that, frankly. Instead, over on X, I’ve seen a lot of folks seemingly excited that California is going through a crisis — so long as it makes Democrats look bad.
Price controls suck. Even in the insurance market. Perhaps especially in the insurance market. Why? Limiting price increases for a good that is of increasing cost is a great way to limit supply of that good.
That’s why insurers of last resort in Florida and California have seen more demand in recent years. Notably Florida has made real progress getting folks off of its own last-resort option, but only after seeing the number of policies it held get too high for comfort.
In the case of California, the state did not approve enough rate hikes to make State Farm’s operations in the state economically viable, so the group reduced its overall policy coverage in the state. Here’s State Farm (SFG) in March of 2024:
As shared with the [California Department of Insurance] prior to the February 2023 filing, rate increases alone would likely be insufficient to restore SFG’s financial strength. We must now take action to reduce our overall exposure to be more commensurate with the capital on hand to cover such exposure, as most insurers in California have already done.
Which led to, per Newsweek:
State Farm, one of the biggest insurers in California, canceled hundreds of homeowners' policies last summer in Pacific Palisades—the same area which is now being ravaged by a devastating wildfire.
The move was justified by the company as an attempt to avoid "financial failure" as the frequency and severity of wildfires is growing in the Golden State, especially in at-risk zones. But as the multiple fires currently burning through Southern California threaten to cause devastating losses for residents, many will likely need to rely on their insurers to get back on their feet after the blazes are contained.
There’s a kind impulse behind trying to make something necessary more affordable. But when it comes down to something like insurance, you can only require below-market consumer costs if you are willing to backstop the market after chasing out economically-interested players.
Our riff that “limiting price increases for a good that is of increasing cost is a great way to limit supply of that good” also applies to housing stock, of course. Rent control is another feel-good idea that winds up a self-defeating exercise in supply constriction in an attempt to bolster supply availability.
There was an old meme on X asking users what their most conservative, liberal, libertarian, or similar view was. The idea was to get folks to share where they do not fit neatly into a single ideological bucket. My most conservative beliefs have long been that the Federal deficit matters and that price controls suck.