Suggestions for CA DMV

From my not-so-recent visit to CA DMV, I found the following improvements are needed:

1. Appointment system at DMV should account for parking space. It doesn't make sense coming at the right time and not finding parking because lots of other people have come without appointments. Appointments should come with a parking slot.
   
2. Driver Licenses should be created and issued immediately after the test is done. Come on! NJ has same day DL! CA has silicon valley, it should be able to get a DL within 15 sec after the photo is taken!!
   
3. Online address changes should work. Currently, CA DMV website says that once you do an online address change, you should visit after a few days to see if it worked. I don't understand why it wouldn't work. Actually, it did NOT in my case and I had to send a paper address change!!
   
4. Written tests for DL should be computerized. Applicants first stand in a line to get a random question paper, then they go into a room and sit with other applicants to write the paper, finally they stand in a line to get it corrected. Many hours of applicant and official time would be saved and of course, cheating would be reduced if the system is computerized. Maybe CA has a dearth of software companies to do that job ...
5. Detailed vehicle inspection is currently done just for Smog. Brake, wiper blades, lights, etc inspection are not done at all, ever! Clearly, priorities are not right somewhere. Someone is going down the highway with a broken brakes, breathing fresh air!
   

What is the good part about CA driving? The roads are excellent. There are separate left turn and U turn lanes and signals. Also, most signals are operated by sensors, so you (almost) never wait at a red if cross traffic is absent!

unlimited or not, that is the question

AT&T Wireless offers 2 data plans (click on features tab on the at&t page) for wireless customers: "unlimited" for "smart" phones costing 30$ and "unlimited" for "regular" phones costing 15$. On the web page, they are called "Smartphone Personal" and "Data Unlimited" respectively. I have put screen shots below.


It is not clear what the difference is -- all say "unlimited". Although the "data unlimited" says "unlimited mobile web access", in the description, it pretty much lists everything else as "unlimited" as well. If you talk to a customer representative, they will just say it is a bad thing to be using an "unlimited" plan for "regular" phones when you are using a smart phone. It will start getting errors, will not work, etc, etc.

The 15$ plan works fine for a smart phone but I suspect that they have hidden limits on data usage on "unlimited" plans! This means that the "unlimited" plan for "regular" phones is not truely "unlimited"!

If an ISP (comcast, cablevision, verizon, AT&T) can give a DSL / cable internet connection without caring whether we will be putting supercomputer or a 1900 era PC at the end point, why does the wireless company need to know or care what phone we are using? Data plans should be based on data usage or speed, not what machine is at the end point.

This would be equivalent to getting charged for a buffet based on your BMI. If you are fat, maybe you will eat more, so why not charge more for the "unlimited" meal to start with! I hope no restaurants owners are listening ...

Paul Krugman's Argument for Health Care Reform

wrt Paul Krugman's Oped in NY Times, note the following:

"First, the uninsured in America are, on average, relatively young and healthy; covering them wouldn’t raise overall health care costs very much." effectively means tax the young and the healthy. That is a disincentive for being healthy (& young -- but you don't have much choice there).

How does the government create incentive for being healthy? This way: "which include efforts to improve incentives for cost-effective care, the use of medical research to guide doctors toward treatments that actually work, and more." This basically means a Govt panel will tell what should money be spent on, what tests are OK to be done etc.

I have the following issues with these aspects of this plan. Other issue is mentioned here.

1. Fix Medicare / Medicaid first. If people don't know how to run those programs, they won't run anything else properly. (hint: this is a trick command! The whole point of this is to get you in an infinite loop!!)
   
2. Don't regulate health care by panel. From experience, all it ends up is creating a black market. People in UK and Canada come to US for treatment they cannot get there. That is effectively a black market. You can always argue that people have nowhere to go now since US also has govt run healthcare (problem solved!). What will end up happening is that there will be test centers / doctors who will perform one kind of procedure / tests and bill another one! A whole new era of fraud will be unleashed.

Paul isn't asking the right questions as an economist. He is playing a politician's role. I would urge him to get in his economist role and get the following questions answered:

1. If insurance companies are making too much profit, why doesn't the supply of insurance companies increase?
2. If pharma companies are making too much profit, why doesn't the supply of pharma companies increase?
3. If doctors are making too much profit, why doesn't the supply of doctors increase?
4. If testing companies are making too much profit, why doesn't their supply increase?
   
5. If health care companies have too much inefficiency in them -- too much is spent on paper work, then why is there so much paperwork? Remember, President Obama proposed a national health record system to "improve" efficiency. Why does this inefficiency exist? No company would want to spend money on inefficient activities.

High profits by various health companies and high inefficiency has been stated as a reason for high costs by Democrats. Somewhere in the answers to the above 5 questions you will find some govt interference blocking supply and increasing inefficiency. Maybe I am prejudiced. Show me an economic argument. Find the truth and form policies based on that, not the other way around.

Senate Health Care Bill

If you are the government, how do you raise the money for the health care bill. In addition to tax on high end insurance, you impose "fees" on drug, devices sales and insurance premiums in general.

W.r.t sec 6008, 6009, 6010 of Title VI, Subtitle A of Senate bill S.1796, it seems that government wants to get 2.3 billion from drug manufacturers, 4 billion from device manufacturers and 6.7 billion from insurance firms. The way they go around doing this is making each company pay a percentage of that amount based on the money they get in. Drug manufacturers / importers pay a percentage proportional to ratio of their drug sale income to the whole industry drug sale income. Device manufacturers and Insurance companies are similarly taxed. Note that this is not proportional to profit, just basic income!

Any tax of these companies would be a tax on consumers. Where else do they make money from? We can expect premiums, drug prices and device prices to go up. By putting this stupid money raising scheme in place, the government has ensured that costs for the US population is going to be some significant multiple of 13 billion (2.3 + 4 + 6.7) dollars. If the companies have to pay regular taxes plus this fee, surely they will have to rake in something which is a significant multiple of 13 billion dollars.

I am quite sure that the companies currently do make trillions of dollars. We just ensured that cost is not going to go down.

Voter Inflation (2)

wrt my last post, I should retract ... no, that would happen for an ideal government. Now you just need to become a lobbyist and surely your children can be too ...

Vote Inflation?

When citizen population of a democratic country rises, the vote of an always existing citizen counts "less" during an election. In the US, only the house tries to have members proportional to the population. The senate and the executive branch however have fixed number of members, so each senator or the president will have more and more voters. Since their votes count less, does this mean that a citizen effectively loses power over time? This surely means that if you want to influence the political setting of a country, you should have lots of children and teach them your political beliefs :^)

Recycle always?

http://tinyurl.com/m2rkse (via @thedailybeast)

The author here is unhappy that people will be recycling less during recession. He completely ignores the fact tht during a recession, people will be using lesser commodities and hence the contribution to environmental pollutants will be lesser. He wants to overload people more just to stick with his principles of recycling.

Recycle always even if no one needs the end product!

Fair Resource Allocation Policy

Do you remember the story of 2 cats and a monkey from school? Refresh your memory using this story and also see here. This is an interesting problem and it demonstrates how government operates. When 2 cats cannot solve a problem, they think a third person can solve it in whom they have vested all power. The cats don't stop to think that the monkey can misuse its power and they stand to lose all that they have gained.

The monkey in this fable consumed everything that the cat had, but in real life politics work differently. The government has to live beyond the fable and hence it consumes only a part of what the cats have.

If the cats live in a socialist society, the government would consume a large part of the cheese for its purposes and give the rest to the thinest cat. If the cats are in certain kind of class segregated societies, the government would give the cheese to the cat based on its class. If the cats are in a libertarian society, they would be wise enough to solve it themselves. Can there be a non-government solution to this issue? See below for answer.

Solution to 2 cat problem
One cat splits the cheese and the other cat choses one of the halves. The first cat cannot be selfish. If it splits unequally, there is a good chance that the second cat will chose the larger half. The first cat can get the best outcome by splitting equally.

Solution to N cat problem
How would you extend this solution to multiple cats? If there are N cats, you will do this:

1. for i = 1 to N-1
1. cat i splits a whole piece of cheese into 2 parts
2. for i = N to 1
1. cat i choses the best piece

How does this work? Since the last cat gets to chose which fraction it is going to take, the former cats cannot be selfish. They have to split the cheese such that there is 1/N part separated out at each step. If cat i tries to be selfish, there will be some cat j > i which will get a bigger share of the cheese.

The assumption here is that cats don't collaborate during the splitting process. Can M of the N cats collaborate and get a better outcome than 1/N for each one of them? I think it is doable but need to work out some strategy. Also, is there a solution for avoiding such collaboration?

Government run Health Care

Look at this (page 30 of 84). Approximately 50% are non citizens and 50% are young (healthy?) people (18-34) -- still what we hear is 45 million uninsured!! The politicians and media talk about it as if 45 million "Americans" are uninsured.

We need a study of why people don't buy insurance and why costs are "high" before there is some action on this. Need to do analysis before design. Medicare has a lot of wastage. Let us think before making another government system.

Democracy, Stability and Freedom

Democracy is the rule of the people. The most prevalent form of democracy used today is representative government; people elect their representatives and these representatives run the government. You would think if people have a choice on who runs the government, their freedoms will not be curtailed. This is extremely incorrect.

Democracy is useful from one perspective -- stability. If majority of people have selected a government to power, chances are slim that the majority of people would be unhappy with the government. They would surely not be unhappy enough to lead an uprising. This means a democractic government would mostly lead to clean and smooth transfers of power.

This can also mean that in a democracy, the majority can make rules and regulation which are not popular with the minority. There is no issue with stability, after all the minority cannot have an impact on the government.

You would think surely this cannot be happening -- the majority would look out for the well being of the minority. After all, the usual rule is "do not do onto others what others would not do onto you". Well, it depends on whether the majority thinks the minority is "at fault". I would suggest you to look at the tax code. Rich people pay more tax than poor because they are in minority. The usual argument is rich people have so much more money, so they can surely afford to give more, but nevertheless, rich people have lesser freedom with their property than poor people. This works OK since even if all rich people decide to vote the government out of power, they wouldn't have enough votes. A lot of populist protectionist measures get passed on account of the majority thinking the minority is at fault.

Another way in which the majority can decide to curtail freedom is when it thinks the whole population is at fault and it is its duty to fix it. As example, take "global warming" or "mortgage crisis". Regulations are made to fix the energy industry or the banking industry because something they did or are doing has supposedly caused problems to all people. These regulations however would apply to everyone equally -- if I decide to open a bank now, I would have more regulations than 2 years ago.

Is it really necessary to curtail freedoms of people? Surely, there can be no valid reason to reduce freedom of some people as compared to others. There is also no valid reason to reduce freedom of all people to say fix "mortgage crisis". If there is a problem, spread the word about causes and consequences and majority of people will adjust their behavior automatically. This means that the crisis would go away.