Relevant and even prescient commentary on news, politics and the economy.

2007 and Flood Insurance….blast from the past

Reader Dan sends along this one: (this was my newbie persona ten years ago http://angrybearblog.com/2007/05/reader-dan-on-insurance.html)

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My insurance in MA was cancelled on property due to ‘limiting risk exposure’ by my insurance company. While near the coast, my investment property is not on a flood plain and well protected as well as being higher by far (40 ft.) than downtown. I wound up having to buy from a MA backed plan at 1.5 multiplier for less coverage.

I got to thinking. If I am getting cancelled, what’s up. I went to Florida via the web because I had heard that Allstate was canceling most of its coverage in the state, and other companies were considering the possibility. I found this:

Florida homeowners could see property insurance rates cut by as much as a total of 40 percent under a plan finalized Sunday by lawmakers hoping to reverse hurricane-fueled increases many residents say have threatened to price them out of their homes.

Lawmakers said the wide-ranging proposal they’ll vote on Monday is expected to provide savings of up to 20 percent for many of the coastal customers of Citizens Property Insurance Corp., the state-created company that has become Florida’s largest property insurer.

Getting the 20 percent rate reduction would require a number of factors, and the only guaranteed savings across the board appeared to be closer to 5 percent. But many customers will see much larger reductions, lawmakers said.

Rates for property owners insured by private companies are also expected to come down under the plan, which would still need approval from Republican Gov. Charlie Crist.

The state-created company was envisioned as a last-resort insurer for those who can’t get private coverage, but it has grown to be the state’s largest property insurer with 1.3 million customers.

Insurers including Allstate Corp., Nationwide Mutual Insurance Co., MetLife Inc. and State Farm have canceled or limited homeowners policies or significantly raised rates in an effort to reduce exposure to future catastrophes since the devastating hurricane seasons of 2004 and 2005, in which insurers lost $36 billion in Florida.

The industry also says the plan is a quick-fix bailout that puts more risk on the government. The plan increases the amount of backup coverage, or reinsurance, available to private insurance companies through the state’s Hurricane Catastrophe Fund.

While the insurance is for homeowners, business also needs flood and hurricane insurance to operate in the area. If Dade county is hit with a 4 or 5 force, the consequences would be huge. The season is just starting. Is this simple economics? Which homeowners get the most benefit? Does it preclude good zoning? Are there any social aspects to consider? How do businesses cope?

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Flood damage in Houston costs whom?

Via New York Times comes this information on flood insurance, which I believe is the predominate cause of storm damage in the Houston area and beyond:

Private homeowners’ policies generally cover wind damage and, in certain cases, water damage from storm surges. But for almost half a century, all other homeowners’ flood coverage has been underwritten by the National Flood Insurance Program, a federal program that itself faces financial uncertainty.

Flooding has dealt the hurricane’s biggest blow. And in areas where it is prudent — or even obligatory — to buy it, having flood coverage is the exception rather than the norm.

People without coverage will have to apply for grants or low-cost loans from other branches of the federal government, said Loretta Worters, a spokeswoman for the Insurance Information Institute. That means delays in receiving funds, if such requests are even approved.

The National Flood Insurance Program was created in 1968, after most private insurance companies stopped writing homeowners’ flood coverage because they could not charge premiums high enough to cover the potentially catastrophic costs. (In addition to wind and limited storm-surge damage, private insurers cover vehicles caught in flooding.)

The 49-year-old program is now run by FEMA. Its coverage has caps: $250,000 for a house and $100,000 for its contents, and $500,000 apiece for a business building and its contents. Larger companies can still buy flood coverage through commercial insurers.

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Is David Ignatius Falling For Saudi Propaganda?

Is David Ignatius Falling For Saudi Propaganda?

Washington Post columnist and occasional novelist and diplomat, David Ignatius, is one of the best informed and wisest of commentators on Middle East affairs.  Thus it is with concern that in yesterday’s Washington Post in a column titled, “A new chance for Middle East peace?” he seems to have fallen for third rate propaganda largely being pushed by the Saudi government, although also backed by the UAE ambassador (closely allied to Saudi Arabia in their anti-Iran and anti-Qatar escapades), as well as “the White House.”  I can appreciate that in recent years hopes for any kind of Israeli-Palestinian peace deal have simply been absent, so maybe he is indulging in some sort of optimistic thinking with the idea that pushing any sort of plan is better than having none.  But I fear that not only is he being a pollyanna here, but joining a herd of suckers for drivel coming out of the Saudi PR machine, which wishes to puff up new Saudi Crown Prince, Muhammed bin Salman (MBS) as a wonderfully progressive and open-minded reformer.  Yuck.

Indeed, what is probably the most dramatic point here is that indeed MBS has apparently been going around saying that “resolution of the Palestinian problem and peace with Israel are ‘crucial for the future of the Middle East.'”  This is indeed louder than what has been heard from Saudi leaders previously, although the late King Abdullah did put forward a peace plan that involved the Israelis moving back to the 1967 borders, a plan that went nowhere.  So, peace noises out of the Saudis are not exactly completely unprecedented.

The more detailed part of the column where Ignatius shows his usual ability to ferret out information not previously reported by others is that the specific plan being pushed involves using a UAE-based Gazan Palestinian named Mohammed Dahlan to get Hamas to moderate its demands on Israel in response for a bunch of economic aid, including a power plant to be built across the border from Gaza in Egypt.  No evidence that the current Hamas leaders in Gaza will go along with this is provided and, and it is admitted that Dalhan has long been at odds with Mahmoud Abbas, the PLO leader who is in charge of the West Bank.

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Baltimore Trade-off

I’ve been following the situation in Baltimore since the death of Freddie Gray because my wife hails from that city. Here is what is happening now according to the Baltimore Sun:

Baltimore’s top law enforcement leaders say they are working closely together to fight crime — but the community should not expect a turnaround soon.

State’s Attorney Marilyn J. Mosby and Police Commissioner Kevin Davis, in an exclusive joint interview with The Baltimore Sun, say they are overseeing crime-fighting in a different climate than six years ago, when the city experienced fewer than 200 homicides for the first time in decades. Both officials claimed those past gains were achieved using heavy-handed tactics that have been disavowed.

“There was a price to pay for” the drop below 200 homicides, a price “that manifested itself in April and May of 2015,” Davis said, referring to the uprising following the death of Freddie Gray. “I think the long view is that doing it the right way is doing it the hard way, and I think most Baltimoreans realize that the way forward is not always going to be easy.”

The article continues:

Baltimore is on track for more than 300 killings for the third consecutive year. Among the latest victims was a 15-year-old boy who was gunned down in the middle of the afternoon Tuesday, the third teenager killed this month. In addition to spiking crime, authorities have continued to grapple with scandals that have led to criminal charges against officers and the dropping of scores of court cases.

I’m not sure I understand what this means. Is there really a direct link between disavowing “heavy-handed tactics” and a more than 50% increase in the homicide rate? What exactly is the relationship here? Is everyone OK with the trade-off? In particular, are the families of the 100 marginal homicide victims copacetic? And what are those heavy-handed tactics anyway?

But let’s focus on the negatives:

Mosby cited zero-tolerance policing as a “failed strategy” that continued in Baltimore long after it was formally disavowed by the city’s leaders. “Those failed policies are what got us to the place we were at in the spring of 2015,” she said, referring to the unrest.

Davis noted that his agency is operating with about 500 fewer officers than a few years ago, when the city experienced several years of declines in gun violence. He said the police department at that time employed a strategy that won’t be duplicated.

“It was a geographic takeover strategy of neighborhoods, that cast nets over neighborhoods that happened to be overwhelmingly poor, overwhelmingly African-American, overwhelmingly impacted by all the failings of society. And they [celebrated] when they got to a certain artificial number of murders,” he said. “As if 200 murders is acceptable for a city of 600,000 people.”

I agree that 200 murders a year should not be seen as acceptable. But I would think that 300 murders a year should be viewed as quite a bit less acceptable.

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Notes on Harvey: if Karma could bring her litter to visit the Texas GOP

Notes on Harvey: if Karma could bring her litter to visit the Texas GOP

First of all, as many of you already know, the M.I.A. proprietor of Bonddad blog, Hale Stewart, resides in the Houston area.  I traded messages with him on Saturday, and as of then, he was doing OK.

Secondly, when Superstorm Sandy hit New Jersey and New York, Texas Republicans were prominent among those who opposed aid.  Ultimately aid was provided — but not until 75 days after the storm.

There were two Sandy-related aid bills.

The first bill granted FEMA a $9.7 billion increase to borrow for the National Flood Insurance Program. It passed the Senate on a voice vote, but the following Texas GOP Members of Congress voted against the aid:

Mike Conaway (Midland)
Bill Flores (Bryan)
Louie Gohmert (Tyler)
Kenny Marchant (Coppell)
Mac Thornberry (Clarendon)
Randy Weber (Pearland)
Roger Williams (Austin)

The second bill provided $17 billion emergency funding to the victims and to affected NY and NJ communities.  Both Texas Senators Ted Cruz and John Cornyn voted agains the bill.  In addition to all of the above Representatives, the following Texas GOPers also voted against this aid:

Ted Poe (Humble)
Sam Johnson (Plano)
John Ratcliffe (Heath)
Jeb Hensarling (Dallas)
Joe Barton (Arlington)
Kevin Brady (The Woodlands)
Michael McCaul (West Lake Hills)
Kay Granger (Fort Worth)
Lamar Smith (San Antonio)
Pete Olson (Sugarland)
Michael Burgess (Lewisville)
Blake Farenthold (Corpus Christi)
John Carter (Round Rock)
Pete Sessions (Dallas)

Now that it is Texas suffering a catastrophe, of course some of these same politicians will be at the front of the line braying for help. While with the GOP in control of the entire federal government, Karma will not be paying a visit with her litter, in a just world aid would be provided immediately — on the same day they all visit NY and NJ, apologize, and abjectly beg forgiveness.

Of course, the “better angels” will prevail this time. But rest assured, the next time a disaster befalls anywhere in the Northeast, these same Texas politicians will once again vote against aid. In the meantime, above is the Roll Call of Shame for posterity.

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GAO Report finds Rural Postal Service Remains Essential

From time to time, Mark Jamison or myself would feature articles from the Save the Post Office blog as authored by Steve Hutkins, a literature professor who teaches “place studies” at the Gallatin School of New York University. Mark Jamison a retired Postmaster for a small town in North Carolina would often write there also. This particular post was featured in October of 2016. Where FedeEx, UPS, DHL or other services do not go, the US Postman still does play an important role in rural communities.

West Plains Daily Quill: A top watchdog study completed at the request of U.S. Senators Claire McCaskill of Missouri and Heidi Heitkamp of North Dakota, found that the Postal Service remains essential to rural communities, regardless of whether those communities have access to rural broadband services.

Senator Clair McCaskill had this to say:

“This study shows what we already know to be true—that the Postal Service remains essential to Missouri’s rural communities, regardless of their access to other technologies,” said McCaskill, a former Missouri State Auditor and senior member of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the Postal Service.

“There’s simply no substitute for the vital service our post offices provide— even as we continue to make important advances in rural broadband—and we’ve got to preserve and improve that service for the folks who rely on it most.”

Senator Heidi Heitkamp added to McCaskill’s comments:

“For North Dakotans in rural communities—whether they have access to high-speed internet or not —reliable mail service is a key ingredient to a successful business and staying connected,” said Heitkamp. “But too often, that high-quality service is not delivered—and that’s exactly what Senator McCaskill and I are working to improve. Today, we received the results of a Government Accountability Office study we requested which affirmed what folks in rural states have long known—that communities and businesses in rural areas depend on mail service regardless of their internet connection. By providing more clarity, we can make sure dependable mail service is prioritized in the rural communities where it is needed the most.”

The Government Accountability Office report examined the relationship between broadband access and use of the Postal Service in rural and urban communities. The report found that rural households without broadband access continue to rely on the Postal Service for more transaction and correspondence mail—and value this service for a variety of reasons, including fewer retail alternatives and a high level of trust in USPS services. The study also found that when rural households get broadband access, they do not reduce their use of the Postal Service. Read more. The GAO report Information on How Broadband Affects Postal Use and the Communications Options for Rural Residents is attached.

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Republicans and Labor

Interesting development last week, Missouri’s state Legislature decided a minimum wage of $10/hour is a hardship for business and too much for Labor. This comes after the MSC sided with St. Louis and Kansas City in setting a minimum wage of $10.10/hour. The Republican legislature decided differently and passed legislation to prevent local communities from establishing minimum wage above what the state mandates.

Thousands of workers in St. Louis will likely see smaller paychecks starting Monday, when a new Missouri law takes effect barring local government from enacting minimum wages different than the state minimum.

The law is drawing protests in St. Louis and in Kansas City, where a recent vote approving a higher minimum wage is essentially nullified without ever really taking effect.

The impact is direct in St. Louis, where the minimum wage had increased to $10 after the Missouri Supreme Court sided with the city in a two-year legal battle. Days after the Supreme Court ruling, Missouri’s Republican-led Legislature passed a statewide uniform minimum wage requirement. The state minimum wage is $7.70 per hour. Republican Gov. Eric Greitens declined to veto the bill, allowing it to become law.
An estimated 35,000 St. Louis workers saw pay raises after the court ruling, and the city’s plan had called for the minimum wage to increase to $11 per hour in 2018.

Republican State Sen. Dan Hegeman from rural northwest Missouri, said the higher minimum would force some employers to either cut jobs or move. Just like having healthcare insurance at Papa John’s would really impact the cost of pizza . . . 10 cents for a medium pizza.

‘You end up having fewer jobs and you do a disservice to the workers,’ Hegeman said. ‘In my heart of hearts, I really think it hurts people in the long run.'”

Missouri Republican Governor Eric Greitens refused to veto legislation limiting local minimum wage laws, is pushing RTW laws, and is looking to boost pay for some state employees who are “star” performers.

Some more original ideas from the Republican sector on how to improve the economy by riding on the back of the low-income citizens.

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Military Times reports top Pentagon posts vacant

The Military Times reports:

A handful of Pentagon nominees will be waiting for Senate confirmation when the upper chamber returns in September from its summer recess, but the administration still has dozens of Defense Department positions to fill.

Leaving State Department vacancies aside, I thought the Trump readiness rhetoric applied to DOD…not so much I guess.

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