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The protection gap

Ah, language… you’re we’re soaking in it.

A growing disparity between economic loses from natural disasters and the amount of those losses covered by insurance is bringing together some strange bedfellows. I know, the entire world is now one giant mixed metaphor:

Insured losses from natural catastrophes may reach $145 billion this year — well above the 10-year average — as population growth, urban sprawl and climate change combine to supercharge risks, according to an estimate in April from the Swiss Re Institute.

The rising costs make it essential that the insurance industry “reach out not only to regulators and supervisors, but also to broader policymakers, government departments outside of insurance, academia, and even customers to work together and figure out how to tackle this issue,” Ariizumi said.

Ariizumi spoke near Durban, South Africa, ahead of a panel focused on the protection gap on Thursday. The event, held alongside the G-20 finance chiefs’ meetings, is expected to be attended by World Bank President Ajay Banga and the chair of French insurer Axa SA.

To address losses from natural disasters, Ariizumi said various forms of collaboration are possible such as the public sector agreeing to take on part of the risk when an event is deemed too great for private financial institutions to handle the costs on their own.

Once again, no shade to Bloomberg – they’re just the messenger explaining this through their prism – but this article raises question about t-shirts that say climate change is too expensive to address already answered by those t-shirts.

And this is why, in order to have nice things, massive collection action collaborations by governments to help businesses, which include insurers and media companies alike, to change courses, practices, and tactics toward the betterment of all humans remains job one. We can come back around to it under other guises, but collaboration is socialism collaboration. One day, we’ll come around to that and see how silly all of this was.

And it would be best for everyone if that day is tomorrow.

Image: a corner of Dukes County from the sky, via.

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News Profit

papersI guess that could be prophet, but that’s a bit cheeky and I already miss the Amatriciana.

The impetus of media properties to destroy their product marches on. Bottom-line news gathering, a strict misnomer, has become the new if nonsensical metric. Where can this be headed, other than the obvious? The Washington Monthly looks at the future of cross-subsidies:

In the past, when media companies funded labor-intensive journalism—foreign coverage, investigative projects, beat reporters who spend days tracking down leads—we believed this reportage was very valuable, even financially. Readers wanted to know, advertisers liked the prestige that high-quality reporting brought, and the publications made plenty of money.

Occasionally a wiseass would say something like, “The box scores are paying for the Baghdad bureau,” and we thought, Well, maybe that cross-subsidy exists, maybe it doesn’t—but the whole package seems to be doing just fine.

The Internet blew apart the package and eliminated the cross-subsidy. Now readers can go to ESPN and get box scores, and they can go to a separate site to get news. Sports scores no longer subsidize the foreign correspondent, and the comics no longer support the city hall reporter.

This has led us to confront the ugly reality of just how lousy—financially speaking—many of our journalistic projects were. Media managers can now produce a profit-and-loss statement not only for the news division as a whole, but for each reporter—and each piece of content.

That is a dangerous sort of urgency. Immediate returns on investment is just instant gratification by [barely] another name. It’s not a viable practice for anything.

More broadly, news can be boring. What we are convincing ourselves to be true is merely self-fulfilling, and an indication that any number of things could be. But once information and news reporting become just more ‘content’ that has to compete for eyeballs, then we really need to keep one eye on the till. But beyond certain levels of comfort, even paranoia is not a sufficient motivating force. The challenge to education is ignorance; the need to know, in order to inform our assent or rejection, only grows with the complexity shrouded in simple choices. Re-discovering self-interest can be brutal and unforgiving, but it’s the only thing that will liberate the buyer’s impulse.

 

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Subsidy Sunset

This is one way that they end.

John Boehner courageously supported ending taxpayer subsidies to Big Oil for 12 hours, as Climate Progress noted yesterday.

But then he gets called on the mat (do they still say that?) by chez Big Oil and Limbaugh, and immediately flips back. But the writing is on the wall.

Again, not hopeful. They are posting the last of the massive profits, and they know it. The same way the House of Saud knows things are changing.

I cut my finger really badly two days ago, and the first two times I changed the bandage, the wound gushed blood, like crazy – I could barely take it, or staunch the flow. But this morning, I soaked the wound in warm, soapy water and slowly cut the bandage and dried blood away, until after a (long) while I had all the gauze out down to the clean wound with no hemorrhaging and noticeably less pain. It took a while, but… it worked.

Just saying.

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Green Faith

This could go without saying, but I guess if I really believed that, I would let it. There is no good faith element – as in, “We’re operating in good faith” – in a capitalist system. Nor does there have to be. There is only green faith.

WASHINGTON — Reversing its oft-repeated position that it was acting only on behalf of its clients in its exotic dealings with the American International Group, Goldman Sachs now says that it also used its own money to make secret wagers against the U.S. housing market.

A senior Goldman executive disclosed the “bilateral” wagers on subprime mortgages in an interview with McClatchy, marking the first time that the Wall Street titan has conceded that its dealings with troubled insurer AIG went far beyond acting as an “intermediary” responding to its clients’ demands.

They could clearly see it was toppling and vulnerable sector; opportunities abounded. Of course they were playing both sides, they would be stupid derelict in their duties, i.e., not competitive, not to. Just as we would be derelict in our duties stupid not to know this is what they are doing, particularly because of the despite the altruistic tone of their t-shirts and coffee mugs. The very notion that something, anything, is done by a company that is in the best interest of anything other than making more money is… worse than naive, it’s a sentiment that is itself counted on and used, where possible, to make more money – a tool like any other. No flag, no empathy, no brotherhood, no fidelity except to profit, where the loyalty is ruthless and unwavering. It has to be.

See the circle? You’re soaking in it.