Author: Rick Swedloff

10

Bottled Water Crisis

bottledwater.jpg Well, it finally happened. After years of tremendous marketing, bottled water is taking a hit. Drinking bottled water is being equated with smoking cigarettes and drinking alcohol as an undesirable social activity. Chicago is the first major city to levy a sin tax on each bottle of water sold within city limits. Starting yesterday Chicago will charge a 5-cent tax on each bottle of water sold. Officials predict the tax will yield $10.5 million annually.

The Daily Green lists the seven sins of bottled water:

1. Plastic bottles are made from petroleum.

2. The bottles often go into the trash, rather than the recycle bin (in part because many states don’t offer five-cent deposits to encourage recycling, as they do on soda and beer cans and bottles).

3. The water is pumped far from where it is sold, creating needless pollution as trucks and barges transport it across the country or around the world.

4. Some local communities have objected to the sale of their water, arguing that the water underground or flowing from natural springs is publicly owned and should not be exploited for profit.

5. Bottled water is rarely as closely monitored as tap water.

6. Tap water in the United States, when provided by a municipal system, is the most highly monitored and safe supply in the world.

7. Some of the water sold in little plastic bottles is tap water, but it costs an awful lot more per gallon.

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3

Blogs, Blogging, Blawging, and the New Scholar

Although this is the first time I have ever blogged or blawged, I have been reading blogs since 2001. I came to read blogs in the usual way: as a diversion during the work day. I started with some of the well-written personal blogs. After that, I moved on to some funny blogs or major blogs that provided new and interesting diversions. I found blawgs much later. Because I am neither funny nor have an interest in sharing the boring details of my daily existence, before starting down this academic path I never seriously considered blogging. Now I see it as a way to keep me writing more regularly and give me space to flesh out some unleavened ideas. These are not new ideas and I suspect that these reasons plus some idea about self-promotion are part of why many people blog. But I could be wrong.

If I were into memes or had the time on this blog to run an interview series, I would love to ask some questions from top academic bloggers. But I’m not and I don’t so I’ll post the questions here and hope to get some responses. My hope is that answers to these questions will help new scholars and blawgers think about how to use blawgs.

* Why do you blog?

* How do you structure your day to include time for blogging?

* If you post as frequently as Althouse or Leiter (and there are a lot of you out there), how do you find time to anything else?

* How many blogs do you read and do you use a feed?

* What is the connection between your scholarship and your blogging? Do you workshop new and quarter-baked ideas on your blog? Or do you keep potential article ideas away from the blog?

From the blogging perspective, I am also interested in the way in which incorporated blogs operate:

* How do folks split ad revenue to the extent that it exists (pro rata, based on number of posts, number of responses, amount of time)?

* When thinking about blog posts, do you consider whether they will generate more page views or comments?

5

Why Should the Government Subsidize Terrorism Insurance?

Just before Christmas President Bush signed into law a second extension of the Terrorism Risk Insurance Act of 2002 (TRIA). This Act hasn’t gotten a lot of press, but it provides a pretty substantial subsidy for the insurance industry. In non-technical terms (because the technical terms are so complicated that one needs a slide rule, a pocket protector, and several actuarial tables to understand the terms completely), under this Act the government requires all commercial (not residential) property/casualty insurers to offer insurance for terrorism risks. In exchange, the government agrees to pay 90% of all losses over a certain amount (determined by a complex formula) that result from certified acts of terrorism. In short, the government provides reinsurance for commercial insurers in the case of a terrorist attack. But unlike normal reinsurance agreements, commercial insurers pay nothing up front for the reinsurance. They get to distribute their risk free of charge. Rather, if an act of terrorism occurs, and the insurance industry pays out over their limit, and the government is forced to pony up some cash, then the government has the right to recover its costs from future premiums received by the insurance companies.

Two things puzzle me about this Act: why we need the government to provide this service and why the government is providing this service for free.

The common justification for this act is as follows: Without insurance for terrorism, there would be significant disruptions in certain sectors of the economy and this would have an adverse macroeconomic impact. Insurance companies won’t provide terrorism coverage because terrorist acts are not probabilistic and are thus uninsurable. That is, insurance companies claim that they cannot provide terrorism insurance because they cannot predict how often terrorist attacks are going to occur or how large the impact will be. Thus, the government has to step in to force insurers into the market.

But this doesn’t make sense to me. Certainly we have enough data to make some guess about the costs and frequency of terrorism, and insurance companies can price their products based on that information. Moreover, although it is certainly a possibility that an attack will be so large as to make insurance and reinsurance impossible (e.g., the entire country is leveled in fell swoop), most insurance and reinsurance companies should be able to create a portfolio large enough to eliminate most of the concerns about the size of the attack. Please take a look at this article by Dwight Jaffe and Thomas Russell for a more thorough explanation.

Even if one believes that government should step in to this market, it is unclear why the government is providing this service for free. In any other insurance context, the insured has to pay a premium to receive the security that someone else will step in to pay some of the insured’s losses. Here, the insurance companies are paying nothing up front. The government is taking the entire risk. This is quite a subsidy for insurance companies. I assume that this is being factored into the price of the insurance products being offered, but that just seems like another subsidy for business and industry. Remember, there is no requirement under TRIA for insurance companies to provide residential terrorism insurance.

Yet this bill has created a bit of a topsy turvy world in D.C.: The Dems are on the side of the insurance industry and big business and the Republicans are against. What am I missing here?

21

What Can We Learn From Deborah Shank?

insurance3.jpg

The national media and the blogosphere are abuzz since the WSJ reported on the story of Deborah Shank. As explained by the Los Angeles Times:

Shank, a former overnight shelf-stocker for Wal-Mart in southeastern Missouri, was driving her minivan when she was broadsided by a semi and suffered permanent brain damage. Unable to walk without help, she lost the ability to care for herself or interact meaningfully with her family. Now 52, she lives in a nursing home.

Wal-Mart started out as one of the good guys in this story, paying almost $470,000 of her initial medical bills. But three years after Shank’s husband sued and settled with the semi driver’s employer, the retail giant changed hats. It demanded every penny back, plus interest and legal fees — more, in fact, than the $417,477 the settlement had placed in a special-needs Medicaid trust fund for Shank’s future healthcare expenses.

Several things strike me about this story.

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3

The Fellowship of the (Hi)Ring

Thanks to Dave and the rest of the perma-bloggers for the invitation to blog here. I have been told that I am the first non-tenure-track guest on this site. I am one of those aspiring academics in limbo: not yet on the tenure-track. In short, I, like so many other aspiring academics these days, have a graduate fellowship. LOTRfellowshipA.jpg

There has been a proliferation of fellowships and VAP positions; and it seems clear that more and more entry-level candidates are seeking some sort of pre-market academic employment. Perusing the list of last years’ entry level hires, many of the successful candidates had either completed a fellowship, a visitorship, or some other form of academic study beyond law school.

Cynically, one could suggest that graduate fellowships are a means for law schools to extend the tenure track on the backs of low-cost labor. Let’s examine this position a little closer.

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