I'm all for it. The more religious leaders push their luck and do stuff like this the sooner people who were listening to them will start to realize that it's all the same everywhere. The only difference is the degree of craziness and whose interests it's serving. When somebody comes down with a fatwa banning soccer or samosas, all I can think is, Good. Stop being coy about it and remind everybody who's paying attention what this shit is really all about.
I'll go so far as to say the bug is probably real (looking at the analysis raises some serious questions), but I'll also guess that most of the people reporting it are actaully reporting human error that produces the same result. IIRC, when this was starting to make the news, somebody did a histogram of the ages of the people involved and noticed that it looked nothing like the distribution of the ages of owners of that paritcular car. Lots of elderly folks. So either the software bug recognizes old people, old people have a driving style that triggers it, old people are more likely to report the problem than ignore it, or a lot of those people screwed up and didn't realize it.
If your concern is that computers will do a worse job of looking at the objects in 3 dimensional space around them and solving the kinematics problems required to avoid obstacles than humans do, I think you can rest easy. Reacting quickly to the sudden appearance of a pedestrian is one thing that a human has almost no chance of beating a human at. Even better, the car's LIDAR system will log what happened so if something does go wrong, we know who is at fault.
The liability problem could be legislated in a pretty straightforward way. Limit the exposure of the manufacturer to the same level of liability a typical human driver would have. Require owners to hold liability insurance (this is nothing new). Realistically, the insurance companies will have a very good idea of the likelihood of a human driver crashing vs an automated car crashing and will set rates appropriately. I would bet good money that outside of icy/snowy locations, the rates for an automated car will be lower than for a human driver after only a year or two of trial time.
A lot of time we're blinded to the probability of things happening by the scariness of those things. Realistically, being hit by a computer controlled car is no different than being hit by a car driven by a drunk driver, a distracted 30 year old, or an inexperienced 16 year old. The only question is which is more likely to happen per vehicle mile. On dry roads, most accidents are caused by a drive not paying attention or doing something risky. Accidents caused by complex social interactions that a computer couldn't figue out are far rarer than accidents caused by some nitwit playing with his cell phone. If computers completely solve the 80% problem and make the 20% problem 10% worse, I'm OK with that.
Some of them probably think they are too. I'm not sure that it's always applicable. If you do journalism by interviewing people on TV, they're journalists. If you do journalism by researching stuff and putting together news stories, probably not so much.
If they're entertainers, they are not, by definition, journalists.
What definition is that? There's a reason the word "infotainment" exists. People aren't watching Bill O'Reilly to get news distilled and efficiently transported into their brains. They're watching him to see him bust heads, but they also get some news in the process. Baseball players play baseball on camera, but they're entertainers. Porn stars have sex on camera, but they're entertainers. Bottom line is that if your job is to put butts in chairs and eyes on screens, you're an entertainer for the purposes of figuring out what your salary should be.
I think that like you, I'm inclined to dole the word "journalist" out a little less generously. If you're just reading news that somebody else gathered, you're not a journalist. If you interview newsworthy people and get information out of them for public consumption? I'd say that qualifies as journalism.
Once the consumer stops looking at safety the banks need to compete on something else.
As I'm reading you, giving away toasters is an expense which causes banks to "reach for yield" and if we made them unstable, they could compete on stability rather than giving away toasters. Since they don't need the toaster money, they stop reaching for yield. But banks always profit maximizing, and they're always going to compete on whatever issues they can. The notion that they'd be less profit maximizing and would compete less on fancy features if they had one more variable to compete on is completely made up.
Also, you do realize that the systemic failure was triggered by institutions that were not at all regulated by the FDIC and don't take insured deposits at all, right? This wasn't overreach by traditional banks. It was primarily the investment banking industry that was taking the major risks. Traditional FDIC insured banks were doing pretty much what they always did. The "risk" aspect of it appeared when the investment banks started to fail, and once that happens, nobody is safe. Traditional capitalization requirements suddenly become "not good enough" and everybody gets burned.
This is similar to the old "Community Reinvestment Act caused all those bad loans!" argument that ignores the fact that most of the loans were originated by institutions that weren't subject to the CRA. The reality is that we already have a parallel banking system that takes in money from consumers, loans it out and invests it, and is not subject to the FDIC or any of our traditional banking regulations. It's called the investment banking industry, and it was the indusry that collapsed spectacularly. When the results of a thought experiment conflict with the results of a real experiment, the real experiment wins.
Removal of FDIC will do two things. Consumers will care deeply about safety.
Yes, so much so that they occasionally panic, run on a bank, and caues it to collapse. We've seen this movie before.
Private companies will offer to insure the deposits at certain banks that they can see are doing safe things with money.
OK, and now we're back to basically the FDIC situation again. You have an insurer that the bank pays for that enforces capital requirements and traditional lending behavior. Just like what the FDIC does. Can you be specific about what these private insurance companies would do that the FDIC doesn't, because FDIC membership comes with pretty substantial regulation about capitalization and what can be done with the deposits. Or even better, can you point to some data that shows that non-FDIC institutions actually behaved better and were more stable during the crash? Because as far as I can tell, the data points in exactly the opposite direction.
OK, seriously, the FDIC is a non-issue here. The major problem was on the non-FDIC insured side. We didn't do bailouts to protect FDIC covered accounts, and for the most part, it wasn't FDIC covered money that was at risk. Doing away with the FDIC would not affect any of those things. If you want to talk about how people treat money market funds with indifference, that's great and highly relevant, but it has nothing to do with the isse you're railing against. If you think the picture of the failure is, "Grandma put mony in her FDIC insured savings account and banks lost it in subprime," then you're missing the vast majority of the picture.
The fact is, we haven't had a bank run since the 1930s, and that's 100% attributable to the FDIC. That's a huge win. The fact that we can still have "bank runs" in the money market isn't something you fix by eliminating the FDIC.
Pro atheletes and entertainers aren't paid to make "good" products or to win. They're paid to get viewers. If they do, they're worth the money, regardless of whether the movie was objectively "good" or the game was won. CEOs get paid to run companies well. If a healthy company tanks, by definition, they have failed at their job somewhere along the line unless something really bizarre happened. Top executives are just about the only people who get paid well regardless of their actual measurable value. That's the difference.
Probably two reasons. First, the effect you suggest: less tax avoidance. Second, holding all else equal, tax revenues go up every year becuase GDP grows every year. It takes a pretty substantial cut in rates to drop revenues below their previous year value. It's a lot more sensible to look at the trend line and see if you're below or above trend the following year. I wouldn't be surprised if the Kennedy cuts put us above trend, but I don't think that's something that we can generalize.
I'm trying to find it, but there was a neat piece of reserach from a couple of years ago that surveyed executive compentation policies for various large corporations. As I recall, more than half of the companies had explicit policies that the CEO must be paid a salary above the median for comparable corporations. The good news is that this Lake Wobegon problem is probably self-limiting, given enough time.
How would you draw that up on an a balance sheet? Right now, the books balance nicely: I put $100 in a savings account. That's a $100 liability for the bank plus a $100 asset that hey can do stuff with. Both entries work out. They loan out $90. Now it's a $100 liability to me, $10 in the vault, and a $90 asset in the form of a debt payable to them. All balanced. Are you suggesting that it should be $190 in liabilities now? How would that even work?
I own a pile of bonds as investments right now. Am I totally underwater with liabilities because they haven't been paid back?
A minimum checking balance is a backdoor fee. It's money you don't earn interest on that you're loaning them for free. Just multiply your checking balance by the amount of interest you'd earn in a year if you had it sitting in your savings account and that's your fee. It's a minor issue with interest rates being very low these days, but it's a bigger deal under more normal circumstances.
The problem at the top end is that for "superstars" it's less of a market and more of an auction. Auctions are really good at finding the best use of an asset with a known usefulness (e.g. a pile of raw metal or a rare automobile part), but they're practically guaranteed to overpay for assets whose value is a function of estimated future performance.
Think of it this way: Let's all estimate how well NBA superstar X will do next season (in terms of ticket dollars produced, which is a function of his total awesomeness next year). If you put all of our estimates together, we'll probably get a bell curve, and it's pretty likely that the center of that bell curve is a solid guess for the real results (at least, if we repeat this experiment enough). That's a good idea of what the upper limit on "market price" would be if that guy was a commodity. But he's not. There's only one of him. And he's going to go to work for the person who made the estimate waaaay over in the rightmost tail. How often is that guy right? Not very often. Repeat this over time, and you end up with a class of superstars that often get paid more than they actually produce.
I don't have a good solution for it, but the superstar phenomenon is a real thing that tends to produce this weird result.
Yeah, the age of bank runs was a real blast. The problem with the idea that we can all carefully assess whether our bank is "safe" enough for our deposits is that "safe" doesn't just mean that they're financially sound and well-run. "Safe" also means that the other depositors aren't going to panic and cause that financially sound and well-run bank to collapse anyway. Those runs are unpredictable herd behavior events, and no bank is safe from them.
The interesting thing about our big collapse was that what we saw was a "run" on the money markets. The FDIC did away with traditional bank runs (yay!), but over time, we found a way around the old model of taking insured deposits and loaning them out. We created a big money market for short term credit between banks, and banks started getting big chunks of their low rate short-run financing that wasn't insured, and when the panic happened, that channel froze up. Practically speaking, it was a lot like a bank run, and if left to wind down on its own had the potential to take out any otherwise healthy financial institution. Doing away with the FDIC doesn't do away wtih the money market run problem. It leaves that problem in place and adds back in the classic Mary Poppins style bank run.
True, financial services are really critical, but they are still clearly extracting far more value than they should be in a lot of cases. Much of what the finance industry does is intermediation--they're middle men. In a normal, healthy, functioning market, those services should become fairly commoditized and the price of those services should drop. The fact that huge profits are being made year after year is an indicator that something is wrong with that mechanism.
My guess is that each of those people is worth every penny. Why? Because they're entertainers, and the value of an entertainer is very easy for their employer to figure out. Butts in chairs, eyes on screens. If you dumped Maddow and replaced her with some newbie, even if that newbie was really skilled, you'd probably lose your audience.
CEOs are a much more interesting case. Is it really the case that nobody could do the same quality job for less than $10M? Almost certainly not. Nobody in the executive team who makes a fraction of that is qualified? Doubtful. It's hard to figure out how much a CEO will be worth when you hire him. It's even hard to figure out how much he's worth after he's been working there for a while. There are tons of factors involved.
Some theorize that for public companies, a "superstar" CEO is less about hiring somebody who can run the company and more about investor confidence and buy-in. In that sense, they're more like entertainers than managers. That's why they can jump from fireball to fireball and still get great contracts. As long as they put eyeballs on the screen during the financial news and get people buying stock, they're winners.
1) Parties bill themselves as X all the time without really being all about X. It often even gets built into the conventional wisdom, even though it's bullshit. Good examples are Republicans being about fiscal responsibility and Democrats being all about tolerating the viewpoints of others.
2) These types of laws are bought by the dealerships. The independant dealerships are owned by local wealthy entrepeneurs. Local wealthy entrepeneurs are usually the biggest political donors, and they swing Republican, so when they want to place a phone call to their pet legislators, they're calling the Republican whose seat their advertising helped to win.
Why not vote for a good choice instead of the least of two bad choices? It's your kind of attitude that allows us to sink to this kind of a state in the first place.
That assumes that there was a "good" choice among the alternative parties. That's a pretty big leap.
I'm really not sure about that analysis for a few reasons.
1) Cab drivers are always incentivized to maximize their return by driving like maniacs. And they do.
2) The medallion system doesn't appear to increase taxi driver incomes in a meaningful way. It increases taxi prices, but in return it requires a massive capital expenditure in the form of the medallion (which, for example, costs over $1M in NYC these days). The result is that most drivers work for a company that owns the medallions and hoovers up the excess profits from the regulated market.
3) If there are drivers willing to drive wages down to slave wage levels in the absence of medallions, those guys are still around willing to work for slave wage contracts for the medallion holders. That pretty much guarantees that all of the excess profits go to the company and not to the driver.
Of course, we're talking about automated cars now. The self-driving car eliminates even the ostensible need for a medallion because there are no drivers to "protect." It's a pure capital investment whose marginal cost we want to drive as low as possible. Imagine a $200K self-driving car: Too expensive for the average driver, but a NYC cab fleet owner could by five of them and still have cash left over for the price of one medallion.
What I meant to say was, "There are already massive lawsuits whenever a kid is killed in a car accident."
The major difference is that with computer-driven cars, it should happen a lot less. At least, unless we decide that a computer-driven car killing a kid is so much worse than a human doing it that the payouts should go up 10x.
Self-driving cars are cheaper, sure, by the cost of a taxi driver, but that's not that big a savings, really.
I think you may be underestimating the impact of a human driver on the cost of a taxi. Let's conservatively say the taxi gets 20mpg and pays $4 per gallon for gas. If it averages 30mph (very aggressive, given it's mostly city driving with a lot of idle time), it's burning $6 in gas per hour and at, say, $0.55 per mile in wear and tear, you have about $22.50 per hour in marginal costs from the car. Even if the car costs $100,000 and only lasts 100,000 miles, that's another $30 an hour, totalling $52.50 per hour. Adding enough dollars hourly to keep a human alive is a pretty non-negligible addition to that number.
I suspect that a ridiculously huge part of the cost you pay for a taxi is the cost of the medallion in most places. Drop the medallion system and you'd see a surge in supply and a crash in prices, probably to the point where the driver is the next biggest expense.
I try to dress nicely as well for the same reason. Anybody who thinks, "Well that guy's dumb. He thinks we should all wear ties, or he wants us to think he wears a tie every day!" misses the point. If the Queen of England came to visit and the President hosted a nice banquet in honor of the visit, she'd correctly assume it was a sign of respect for the importance of her visit. Only an idiot would say, "Look at the stupid Americans. They want us to think they're so fancy that they eat a grand banquet for dinner every night!"
Exactly this. I found that a set of basic "find your ass with both hands" questions washes out more than half of the applicants right off the bat. A lot of people are insulted that they have to do such pedestrian things as "write simple C code" during an interview for an embedded software position, but if you can hang on for a few minutes to get through it, you actually get to the real interview.
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I'm all for it. The more religious leaders push their luck and do stuff like this the sooner people who were listening to them will start to realize that it's all the same everywhere. The only difference is the degree of craziness and whose interests it's serving. When somebody comes down with a fatwa banning soccer or samosas, all I can think is, Good. Stop being coy about it and remind everybody who's paying attention what this shit is really all about.
I'll go so far as to say the bug is probably real (looking at the analysis raises some serious questions), but I'll also guess that most of the people reporting it are actaully reporting human error that produces the same result. IIRC, when this was starting to make the news, somebody did a histogram of the ages of the people involved and noticed that it looked nothing like the distribution of the ages of owners of that paritcular car. Lots of elderly folks. So either the software bug recognizes old people, old people have a driving style that triggers it, old people are more likely to report the problem than ignore it, or a lot of those people screwed up and didn't realize it.
If your concern is that computers will do a worse job of looking at the objects in 3 dimensional space around them and solving the kinematics problems required to avoid obstacles than humans do, I think you can rest easy. Reacting quickly to the sudden appearance of a pedestrian is one thing that a human has almost no chance of beating a human at. Even better, the car's LIDAR system will log what happened so if something does go wrong, we know who is at fault.
The liability problem could be legislated in a pretty straightforward way. Limit the exposure of the manufacturer to the same level of liability a typical human driver would have. Require owners to hold liability insurance (this is nothing new). Realistically, the insurance companies will have a very good idea of the likelihood of a human driver crashing vs an automated car crashing and will set rates appropriately. I would bet good money that outside of icy/snowy locations, the rates for an automated car will be lower than for a human driver after only a year or two of trial time.
A lot of time we're blinded to the probability of things happening by the scariness of those things. Realistically, being hit by a computer controlled car is no different than being hit by a car driven by a drunk driver, a distracted 30 year old, or an inexperienced 16 year old. The only question is which is more likely to happen per vehicle mile. On dry roads, most accidents are caused by a drive not paying attention or doing something risky. Accidents caused by complex social interactions that a computer couldn't figue out are far rarer than accidents caused by some nitwit playing with his cell phone. If computers completely solve the 80% problem and make the 20% problem 10% worse, I'm OK with that.
Some of them probably think they are too. I'm not sure that it's always applicable. If you do journalism by interviewing people on TV, they're journalists. If you do journalism by researching stuff and putting together news stories, probably not so much.
What definition is that? There's a reason the word "infotainment" exists. People aren't watching Bill O'Reilly to get news distilled and efficiently transported into their brains. They're watching him to see him bust heads, but they also get some news in the process. Baseball players play baseball on camera, but they're entertainers. Porn stars have sex on camera, but they're entertainers. Bottom line is that if your job is to put butts in chairs and eyes on screens, you're an entertainer for the purposes of figuring out what your salary should be.
I think that like you, I'm inclined to dole the word "journalist" out a little less generously. If you're just reading news that somebody else gathered, you're not a journalist. If you interview newsworthy people and get information out of them for public consumption? I'd say that qualifies as journalism.
As I'm reading you, giving away toasters is an expense which causes banks to "reach for yield" and if we made them unstable, they could compete on stability rather than giving away toasters. Since they don't need the toaster money, they stop reaching for yield. But banks always profit maximizing, and they're always going to compete on whatever issues they can. The notion that they'd be less profit maximizing and would compete less on fancy features if they had one more variable to compete on is completely made up.
Also, you do realize that the systemic failure was triggered by institutions that were not at all regulated by the FDIC and don't take insured deposits at all, right? This wasn't overreach by traditional banks. It was primarily the investment banking industry that was taking the major risks. Traditional FDIC insured banks were doing pretty much what they always did. The "risk" aspect of it appeared when the investment banks started to fail, and once that happens, nobody is safe. Traditional capitalization requirements suddenly become "not good enough" and everybody gets burned.
This is similar to the old "Community Reinvestment Act caused all those bad loans!" argument that ignores the fact that most of the loans were originated by institutions that weren't subject to the CRA. The reality is that we already have a parallel banking system that takes in money from consumers, loans it out and invests it, and is not subject to the FDIC or any of our traditional banking regulations. It's called the investment banking industry, and it was the indusry that collapsed spectacularly. When the results of a thought experiment conflict with the results of a real experiment, the real experiment wins.
Yes, so much so that they occasionally panic, run on a bank, and caues it to collapse. We've seen this movie before.
OK, and now we're back to basically the FDIC situation again. You have an insurer that the bank pays for that enforces capital requirements and traditional lending behavior. Just like what the FDIC does. Can you be specific about what these private insurance companies would do that the FDIC doesn't, because FDIC membership comes with pretty substantial regulation about capitalization and what can be done with the deposits. Or even better, can you point to some data that shows that non-FDIC institutions actually behaved better and were more stable during the crash? Because as far as I can tell, the data points in exactly the opposite direction.
OK, seriously, the FDIC is a non-issue here. The major problem was on the non-FDIC insured side. We didn't do bailouts to protect FDIC covered accounts, and for the most part, it wasn't FDIC covered money that was at risk. Doing away with the FDIC would not affect any of those things. If you want to talk about how people treat money market funds with indifference, that's great and highly relevant, but it has nothing to do with the isse you're railing against. If you think the picture of the failure is, "Grandma put mony in her FDIC insured savings account and banks lost it in subprime," then you're missing the vast majority of the picture.
The fact is, we haven't had a bank run since the 1930s, and that's 100% attributable to the FDIC. That's a huge win. The fact that we can still have "bank runs" in the money market isn't something you fix by eliminating the FDIC.
Pro atheletes and entertainers aren't paid to make "good" products or to win. They're paid to get viewers. If they do, they're worth the money, regardless of whether the movie was objectively "good" or the game was won. CEOs get paid to run companies well. If a healthy company tanks, by definition, they have failed at their job somewhere along the line unless something really bizarre happened. Top executives are just about the only people who get paid well regardless of their actual measurable value. That's the difference.
Probably two reasons. First, the effect you suggest: less tax avoidance. Second, holding all else equal, tax revenues go up every year becuase GDP grows every year. It takes a pretty substantial cut in rates to drop revenues below their previous year value. It's a lot more sensible to look at the trend line and see if you're below or above trend the following year. I wouldn't be surprised if the Kennedy cuts put us above trend, but I don't think that's something that we can generalize.
I'm trying to find it, but there was a neat piece of reserach from a couple of years ago that surveyed executive compentation policies for various large corporations. As I recall, more than half of the companies had explicit policies that the CEO must be paid a salary above the median for comparable corporations. The good news is that this Lake Wobegon problem is probably self-limiting, given enough time.
How would you draw that up on an a balance sheet? Right now, the books balance nicely: I put $100 in a savings account. That's a $100 liability for the bank plus a $100 asset that hey can do stuff with. Both entries work out. They loan out $90. Now it's a $100 liability to me, $10 in the vault, and a $90 asset in the form of a debt payable to them. All balanced. Are you suggesting that it should be $190 in liabilities now? How would that even work?
I own a pile of bonds as investments right now. Am I totally underwater with liabilities because they haven't been paid back?
A minimum checking balance is a backdoor fee. It's money you don't earn interest on that you're loaning them for free. Just multiply your checking balance by the amount of interest you'd earn in a year if you had it sitting in your savings account and that's your fee. It's a minor issue with interest rates being very low these days, but it's a bigger deal under more normal circumstances.
The FDIC is paid for by premiums paid by the member banks. It receives no appropriations from Congress. Is it a good idea now?
The problem at the top end is that for "superstars" it's less of a market and more of an auction. Auctions are really good at finding the best use of an asset with a known usefulness (e.g. a pile of raw metal or a rare automobile part), but they're practically guaranteed to overpay for assets whose value is a function of estimated future performance.
Think of it this way: Let's all estimate how well NBA superstar X will do next season (in terms of ticket dollars produced, which is a function of his total awesomeness next year). If you put all of our estimates together, we'll probably get a bell curve, and it's pretty likely that the center of that bell curve is a solid guess for the real results (at least, if we repeat this experiment enough). That's a good idea of what the upper limit on "market price" would be if that guy was a commodity. But he's not. There's only one of him. And he's going to go to work for the person who made the estimate waaaay over in the rightmost tail. How often is that guy right? Not very often. Repeat this over time, and you end up with a class of superstars that often get paid more than they actually produce.
I don't have a good solution for it, but the superstar phenomenon is a real thing that tends to produce this weird result.
Yeah, the age of bank runs was a real blast. The problem with the idea that we can all carefully assess whether our bank is "safe" enough for our deposits is that "safe" doesn't just mean that they're financially sound and well-run. "Safe" also means that the other depositors aren't going to panic and cause that financially sound and well-run bank to collapse anyway. Those runs are unpredictable herd behavior events, and no bank is safe from them.
The interesting thing about our big collapse was that what we saw was a "run" on the money markets. The FDIC did away with traditional bank runs (yay!), but over time, we found a way around the old model of taking insured deposits and loaning them out. We created a big money market for short term credit between banks, and banks started getting big chunks of their low rate short-run financing that wasn't insured, and when the panic happened, that channel froze up. Practically speaking, it was a lot like a bank run, and if left to wind down on its own had the potential to take out any otherwise healthy financial institution. Doing away with the FDIC doesn't do away wtih the money market run problem. It leaves that problem in place and adds back in the classic Mary Poppins style bank run.
True, financial services are really critical, but they are still clearly extracting far more value than they should be in a lot of cases. Much of what the finance industry does is intermediation--they're middle men. In a normal, healthy, functioning market, those services should become fairly commoditized and the price of those services should drop. The fact that huge profits are being made year after year is an indicator that something is wrong with that mechanism.
My guess is that each of those people is worth every penny. Why? Because they're entertainers, and the value of an entertainer is very easy for their employer to figure out. Butts in chairs, eyes on screens. If you dumped Maddow and replaced her with some newbie, even if that newbie was really skilled, you'd probably lose your audience.
CEOs are a much more interesting case. Is it really the case that nobody could do the same quality job for less than $10M? Almost certainly not. Nobody in the executive team who makes a fraction of that is qualified? Doubtful. It's hard to figure out how much a CEO will be worth when you hire him. It's even hard to figure out how much he's worth after he's been working there for a while. There are tons of factors involved.
Some theorize that for public companies, a "superstar" CEO is less about hiring somebody who can run the company and more about investor confidence and buy-in. In that sense, they're more like entertainers than managers. That's why they can jump from fireball to fireball and still get great contracts. As long as they put eyeballs on the screen during the financial news and get people buying stock, they're winners.
It's pretty straightforward for two reasons:
1) Parties bill themselves as X all the time without really being all about X. It often even gets built into the conventional wisdom, even though it's bullshit. Good examples are Republicans being about fiscal responsibility and Democrats being all about tolerating the viewpoints of others.
2) These types of laws are bought by the dealerships. The independant dealerships are owned by local wealthy entrepeneurs. Local wealthy entrepeneurs are usually the biggest political donors, and they swing Republican, so when they want to place a phone call to their pet legislators, they're calling the Republican whose seat their advertising helped to win.
That assumes that there was a "good" choice among the alternative parties. That's a pretty big leap.
I'm really not sure about that analysis for a few reasons.
1) Cab drivers are always incentivized to maximize their return by driving like maniacs. And they do.
2) The medallion system doesn't appear to increase taxi driver incomes in a meaningful way. It increases taxi prices, but in return it requires a massive capital expenditure in the form of the medallion (which, for example, costs over $1M in NYC these days). The result is that most drivers work for a company that owns the medallions and hoovers up the excess profits from the regulated market.
3) If there are drivers willing to drive wages down to slave wage levels in the absence of medallions, those guys are still around willing to work for slave wage contracts for the medallion holders. That pretty much guarantees that all of the excess profits go to the company and not to the driver.
Of course, we're talking about automated cars now. The self-driving car eliminates even the ostensible need for a medallion because there are no drivers to "protect." It's a pure capital investment whose marginal cost we want to drive as low as possible. Imagine a $200K self-driving car: Too expensive for the average driver, but a NYC cab fleet owner could by five of them and still have cash left over for the price of one medallion.
What I meant to say was, "There are already massive lawsuits whenever a kid is killed in a car accident."
The major difference is that with computer-driven cars, it should happen a lot less. At least, unless we decide that a computer-driven car killing a kid is so much worse than a human doing it that the payouts should go up 10x.
A lawsuit over an automobile hitting a kid? I don't want to live in a world where that could happen.
I think you may be underestimating the impact of a human driver on the cost of a taxi. Let's conservatively say the taxi gets 20mpg and pays $4 per gallon for gas. If it averages 30mph (very aggressive, given it's mostly city driving with a lot of idle time), it's burning $6 in gas per hour and at, say, $0.55 per mile in wear and tear, you have about $22.50 per hour in marginal costs from the car. Even if the car costs $100,000 and only lasts 100,000 miles, that's another $30 an hour, totalling $52.50 per hour. Adding enough dollars hourly to keep a human alive is a pretty non-negligible addition to that number.
I suspect that a ridiculously huge part of the cost you pay for a taxi is the cost of the medallion in most places. Drop the medallion system and you'd see a surge in supply and a crash in prices, probably to the point where the driver is the next biggest expense.
I try to dress nicely as well for the same reason. Anybody who thinks, "Well that guy's dumb. He thinks we should all wear ties, or he wants us to think he wears a tie every day!" misses the point. If the Queen of England came to visit and the President hosted a nice banquet in honor of the visit, she'd correctly assume it was a sign of respect for the importance of her visit. Only an idiot would say, "Look at the stupid Americans. They want us to think they're so fancy that they eat a grand banquet for dinner every night!"
Exactly this. I found that a set of basic "find your ass with both hands" questions washes out more than half of the applicants right off the bat. A lot of people are insulted that they have to do such pedestrian things as "write simple C code" during an interview for an embedded software position, but if you can hang on for a few minutes to get through it, you actually get to the real interview.