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Thursday, January 16, 2025

LA Fires: Progressive Governance Claims More Victims

 by William L. Anderson via The Mises Institute,

Much has been written about the recent wildfires in Los Angeles, including articles on this page and other libertarian sites. After several days of uncontrolled fire and destruction, we are very familiar with the governmental failures that have led to this current crisis. Progressivism is the guiding star of both California’s state government and local governments in the highly populated regions on the state’s Pacific Coast, and progressive policies have all but guaranteed this latest disaster.

Governing ideologies matter and matter greatly. The former Soviet Union and Nazi Germany would not have been as repressive as they were without guiding ideologies of their political leadership. Modern progressivism, while not as virulent and violent as the German and Soviet regimes, operates with a similar utopian worldview to repressive ideological regimes, and people living under progressive governments pay a serious price.

California’s governance has been ultra-progressive for more than a decade and cities like Los Angeles and San Francisco have become the poster children for failed progressive regimes. Democrats hold a 3-1 edge over Republicans in both state houses, while the California congressional delegations in the US House and Senate are dominated by the Democratic Party, which has won almost all the statewide elections for office in the past 30 years. Democrats hold a supermajority in both houses of the state legislature, which means Republicans cannot mount a challenge to any policies favored by Democrats.

Not surprisingly, California’s legislation is highly progressive, from the setting of high minimum wages to environmental policies, all of which impose huge costs on Californians that people in most other states don’t directly experience. Likewise, Los Angeles and San Francisco also have progressive governments that place leftist ideology over the nuts and bolts of ordinary governance.

Like most progressives, California’s lawmakers and activists believe that they can accomplish whatever they wish through legislation and coercion. When people in California believed that insurance rates were “too high,” they pushed through Proposition 103, which, according to Connor O’Keeffe, severely decoupled” insurance rates from risk, which encouraged more building in fire-prone areas. On top of that, California’s insurance commissioner, Ricardo Lara, has announced a one-year moratorium on insurance cancellations, which means insurance companies cannot cancel a homeowner’s policy even if they are in a fire-prone area.

By forcing the few insurance companies that still write policies in California to offer below-cost premiums in places where wildfires are likely to happen, the state is all-but-forcing these companies into bankruptcy, as the claims in the latest fires certainly will out-strip whatever revenues they received from premiums. Given that the estimated damages are likely to be the highest ever from a wildfire, perhaps more than $20 billion, this will affect insurance companies across the nation.

Not surprisingly, California’s politicians and others are blaming “climate change” for what has happened and one expects to see future lawsuits against energy companies, claiming that they have caused warming that is responsible for the current spate of wildfires in California and elsewhere. However, the real culprits are California officials themselves and the legal and regulatory straightjackets they have created that prevent people from taking the necessary actions to abate fire risks.

Elizabeth Weil, writing in ProPublica, points out that more than a century of fire suppression in California forests has created conditions that when fires start, they turn into conflagrations:

The pattern is a form of insanity: We keep doing overzealous fire suppression across California landscapes where the fire poses little risk to people and structures. As a result, wildland fuels keep building up. At the same time, the climate grows hotter and drier. Then, boom: the inevitable. The wind blows down a power line, or lightning strikes dry grass, and an inferno ensues. This week we’ve seen both the second- and third-largest fires in California history. “The fire community, the progressives, are almost in a state of panic,” Ingalsbee said. There’s only one solution, the one we know yet still avoid. “We need to get good fire on the ground and whittle down some of that fuel load.”

However, both the National Environmental Policy Act and California air quality laws, among others, make it extremely difficult to do anything to mitigate the damage done from fire suppression. As always, California governance has created perverse incentives that ensure that forest management necessary to prevent huge fires will not happen. Writes Weil:

The paydays can turn incentives upside down. “Every five, 10, 15 years, we’ll see an event where a firefighter who wants [to earn] overtime starts a fire,” said Crystal Kolden, a self-described “pyrogeographer” and assistant professor of fire science in the Management of Complex Systems Department at the University of California, Merced. (She first picked up a drip torch in 1999 when working for the U.S. Forest Service and got hooked.) “And it sort of gets painted as, ‘Well, this person is just completely nuts.’ And, you know, they maybe are.” But the financial incentives are real. “It’s very lucrative for a certain population of contractors.”

By comparison, planning a prescribed burn is cumbersome. A wildfire is categorized as an emergency, meaning firefighters pull down hazard pay and can drive a bulldozer into a protected wilderness area where regulations typically prohibit mountain bikes. Planned burns are human-made events and as such need to follow all environmental compliance rules. That includes the Clean Air Act, which limits the emission of PM 2.5, or fine particulate matter, from human-caused events. In California, those rules are enforced by CARB, the state’s mighty air resources board, and its local affiliates. “I’ve talked to many prescribed fire managers, particularly in the Sierra Nevada over the years, who’ve told me, ‘Yeah, we’ve spent thousands and thousands of dollars to get all geared up to do a prescribed burn,’ and then they get shut down.” Maybe there’s too much smog that day from agricultural emissions in the Central Valley, or even too many locals complain that they don’t like smoke. Reforms after the epic 2017 and 2018 fire seasons led to some loosening of the CARB/prescribed fire rules, but we still have a long way to go.

California has a Mediterranean climate, which means hot, dry summers and a rainy season in winter. The state heavily depends upon the snowpacks in the Sierra Nevada and the Cascades which help keep the state’s reservoirs full. The mountains of Southern California have sagebrush on the lower slopes and pine in the higher elevations, both of which are highly-flammable. Furthermore, the famed Santa Ana winds which blast off the Nevada desert to the east can turn the mountains and hills in the Los Angeles area into a tinderbox, and that is what happened with the recent fires.

Understand that this disaster was preventable. This is not a situation in which climate change has made disasters inevitable. Geographer Gilbert White famously wrote, “Floods are ‘acts of God’, but flood losses are largely acts of man.” Likewise, we can say the same about wildfires. Just as communities can take measures to prevent or mitigate flood damage, so can they take similar measures to deal with the fire threats.

To protect communities from wildfires, forests, grasslands, and other areas where dry vegetation exists must be well-managed, with controlled burns or removal of brush, blowdowns, and other materials that can turn regular fires into conflagrations. But that also means not subsidizing people who move into fire-prone areas, as is the case in California. Writes Jack Nicastro:

Though many factors contributed to the devastation (such as fire hydrants without watertoo few controlled burns, and insurance price controls), it was also exacerbated by land-use policies that pushed homes and residents away from the city center and closer to the wildland-urban interface (WUI). The U.S. Fire Administration defines the WUI as “the zone of transition between unoccupied land and human development…where structures…intermingle with undeveloped wildland or vegetative fuels.”

The U.S. Forest Service’s 2020 national assessment includes the Pacific Palisades, Altadena, and most of L.A. County abutting the surrounding hills in the WUI. In 2005, the Forest Service reported that California had 5.1 million housing units in the WUI—the most in the nation. The number of housing units in the WUI has only increased since, including 140,000 subsidized by the state.

People living in the East where there is year-round rainfall and high humidity can have their cabin in the woods, given the low probability of huge forest fires. Furthermore, most eastern land is privately owned. However, the western US not only has an arid climate, but also about half of the land there is owned by the federal government, and the federal government owns about 48 percent of the land in California.

Because of federal and state fire suppression policies and political control of those lands by environmentalists, it is nearly impossible to apply wise land use policies that would prevent huge forest and woodlands fires. Likewise, with zoning laws in California pushing people into areas where wildfires are inevitable, progressive policies combine to place lives and property in danger.

Unfortunately, while we are clearly aware of the problem, a political solution is unattainable as long as progressives control policy in California. It is easier for California politicians to blame Exxon for these catastrophes than to admit that their progressive land-use policies for more than a century have been an unmitigated disaster.

https://www.zerohedge.com/political/la-fires-progressive-governance-claims-more-victims

'UnitedHealth fights back: Blame drugmakers for high costs, not the 'middlemen.''

 Healthcare giant's stock cuts more than 200 points off the Dow's price after a rare miss in quarterly revenue and as medical costs continue to rise

Shares of UnitedHealth Group Inc. were took a deep dive Thursday, after the healthcare giant missed quarterly revenue expectations for the first time in more than four years.

And while the company continued to beat profit expectations, medical costs were still rising more than forecast.

The stock (UNH) sank $32.83, or 6%, to close Thursday $510.59, enough to lead the S&P 500 index's SPX decliners. The price decline of $32.83 chopped about 202 points off the price of Dow Jones Industrial Average DJIA, which closed down 68.42 points, or 0.2%.

On the post-earnings call with analysts, Chief Executive Andrew Witty addressed the recent public backlash over high drug costs and transparency of coverage, particularly following killing of Brian Thompson, who headed the company's UnitedHealthcare unit.

See: FTC takes fresh swipe at drug middlemen, says some prices marked up over 1,000%.

Also read: UnitedHealthcare head Brian Thompson's killing shines light on health-insurance denial rates.

Regarding the recent criticism by both political parties of pharmacy-benefit managers, referred to as drug "middlemen," he said it is misdirected.

Witty acknowledged that Americans pay "disproportionately more" for drugs than people in other countries, using the example of one obesity drug costing $900 in the U.S. versus about $90 in Europe. But he stressed that PBMs, such as UnitedHealth's Optum Rx, aren't at fault, and are actually helping keep prices down.

"Pharmacy-benefit managers play a vital role in holding those prices down, which is why drug companies and their allies have spent the past several years attacking them," Witty said, according to a FactSet transcript. "Optum Rx alone delivers many tens of billions of dollars in savings annually, versus the pricing set by the manufacturers."

He noted that in 2024, Optum Rx passed through to clients more than 98% of rebate drug discounts that have been negotiated with drugmakers, and plans to pass through 100% by 2028 at the latest.

"This will help make more transparent, who is really responsible for drug pricing in this country? The drug companies themselves," Witty said.

He also touched on the recent outcry over insurance denials, saying the company is moving toward making health interactions "as intuitive and seamless" as other areas of activity, such as banking, shopping and video streaming.

"We're eager to work with policy leaders to use standardization and technology to speed up turnaround times for approval of procedures and services for Medicare Advantage patients, and to materially reduce the overall number of prior authorizations used for certain MA services," Witty said.

Ultimately, he said the way to improve healthcare is to address the root cause of healthcare costs, which is basically driven by providers, rather than insurers and drug distributors.

For the fourth quarter, the company operating costs climbed 7.3% from a year ago to $93.03 billion, as the cost of products sold jumped 22.3% and medical costs increased 7.7% to offset a 6.3% decline in operating costs.

For the full year, the medical-loss ratio, or the percentage of premium dollars spent on services - lower is better - increased to 85.5% from 83.2% in 2023, citing reductions in government funding of Medicare. That was above the FactSet consensus of 85.1%.

Mizuho analyst Ann Hynes said she believes the higher-than-expected cost trend, coming with elevated utilization, as well as increased prescribing of specialty medication, will "likely remain an overhang heading into 2025."

Total revenue for the quarter increased 6.8% from a year ago to $100.81 billion, but was below the FactSet consensus of $101.60 billion. That snapped a 17-quarter streak of revenue beats.

Revenue for its Optum business increased 9.4% to $65.1 billion, while the UnitedHealthcare business saw revenue rise 4.7% to $74.1 billion.

Net income grew to $5.54 billion, or $5.98 a share, from $5.46 billion, or $5.83 a share.

Excluding nonrecurring items, adjusted earnings per share rose to $6.81 from $6.16 and topped the FactSet consensus of $6.73. The company has beat EPS expectations for at least 21 straight quarters according to available FactSet data.

The company still expects to report 2025 revenue of $450 billion to $455 billion and adjusted EPS of $29.50 to $30.00.

UnitedHealth's stock has shed 10.% over the past three months, while the Health Care Select Sector SPDR ETF XLV has lost 7.9% and the S&P 500 has tacked on 1.6%.

https://www.morningstar.com/news/marketwatch/20250116340/unitedhealth-fights-back-blame-drugmakers-for-high-costs-not-the-middlemen

NY schoolgirl, 11, handcuffed by deputies who wrongly identified her as car thief

 A frightened 11-year-old New York girl broke into tears when upstate deputies placed her in handcuffs for several minutes after mistaking her for a car thief, footage of the mixup shows.

The girl was walking home from Brighton Academy Middle School in Syracuse with a group of friends on Monday afternoon when two deputies from the Onondaga County Sheriff’s Office stopped her five blocks from where a group of teens had ditched a stolen Kia, Syracuse.com reported.

The deputies placed the shocked girl in handcuffs for seven minutes, claiming she was wearing the same pink puffer jacket, camo pants and white sneakers one of the alleged thieves was described as wearing, video taken by the girl’s cousin shows.

The girl was detained and handcuffed when police misidentified her as a suspected car thief.13WHAM

The other children repeatedly told the deputies they had the wrong person, but the deputies insisted she was the culprit, even showing them a photo of the suspect, according to the footage.

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“Girl, you gonna tell me this ain’t you?” one deputy says to the handcuffed girl.

“It is what it is,” her partner added. “If you’re honest, it will make it easy.”

The girl’s cousin tried to explain that the suspect had lighter skin and longer hair.

When additional deputies pull up at the scene, the 11-year-old starts crying as the gravity of the situation hits her.

Eventually, after nearly seven minutes in handcuffs, the deputies realized that they had the wrong girl, released her and apologized for the confusion.

The deputies believed she was this teenage girl seen fleeing in a pink coat and camo pants moments earlier.Onondaga County Sheriff's Office

“I’m sorry about it, but you matched the description pretty clearly,” they told the student, video shows.

The girl’s mother was outraged over what happened to her daughter, who now “no longer wants to walk to and from school anymore.”

“That was the only freedom she had, and it’s now gone,” the mother, who wished to remain anonymous, told WSAZ.

“I can’t make sense of it. I couldn’t even finish watching the video. Even if it wasn’t my child, I wouldn’t be able to finish watching the video because that’s not how you handle children,” the horrified mom said.

The girl was cuffed for about seven minutes.13WHAM

The stolen Kia led police on a seven-minute pursuit before four occupants stopped the car and fled on foot, the Onondaga County Sheriff’s Office said in a news release.

The driver, a 14-year-old boy, was arrested after a foot chase. Two other boys, 13 and 17 years old, were also arrested — but the suspect in the pink coat has not been found, the sheriff’s office said.

The sheriff’s office on Tuesday defended its decision to detain the young girl, which it said was “lawful and reasonable, given the juvenile’s proximity and clothing description.” 

Detainees are typically handcuffed so deputies can take control of the situation and in case suspects attempt to flee or decide to fight, the sheriff’s office statement said.

Sheriff Tobias Shelley had met with her mother, who had “concerns about why the police didn’t inform her that her daughter was detained as part of a criminal investigation,” said the statement. “The Sheriff agrees that moving forward, it will be OCSO policy to notify a parent or guardian of any juvenile who is detained for criminal investigative purposes, no matter how brief the encounter is.”

“This situation was cleared up quickly, largely due to the juvenile’s disposition, patience, and cooperation,” according to the sheriff’s office.

https://nypost.com/2025/01/16/us-news/new-york-schoolgirl-11-breaks-into-tears-as-shes-handcuffed-by-deputies-who-wrongly-identified-her-as-car-thief/