The Market Ticker
Commentary on The Capital Markets- Category [States]

I said it before and I'll say it again: The only way to stop ruinous extraction of money from you when it comes to your freedom of movement in this country is to go to a model of assumed risk as regard to the use of the public roads.

Here's an illustration of why:

Two insurance companies have made an unusual argument in a Michigan case: They’re insisting that the drivers of motorized mobility scooters should be required to get the same insurance as car and truck owners.

The case involves the claims of a paralyzed man who was hit by an SUV while crossing the street on his way to a doughnut shop. The insurance companies’ position? Because the man didn’t have auto insurance on his scooter, they shouldn’t have to pay for any damage caused to him by the SUV.

Remember, this is in a state with a "No Fault" law -- that is, your insurance pays your physical harm irrespective of fault, but if the other party is uninsured then if you injure someone your insurance pays.

In other words you're entitled to recover from someone "at fault" and if they have insurance then they cover it.

This led the companies to try to claim that they shouldn't have to pay because a "mobility scooter" has four wheels and thus ought to be considered a "car" -- and thus have mandatory insurance.  As in "buy it or go to jail" -- like all other mandatory things.

The insurance companies, in short, are once again arguing for sticking a gun up people's noses and forcing them to buy coverage from them, thereby inventing a market out of whole cloth that does not otherwise exist.

There's a simple solution to this and the state that picks it up and runs with it (and by the way, due to McCarren-Ferguson they can do it too and there's nothing the Feds or insurance lobby can do about it) will see massive economic shifts in their direction, which will bring jobs and prosperity on a relative basis to that state.

It's this: ASSUMED RISK.

Let me define this for you.

Public roads and associated facilities (e.g. sidewalks, etc) are declared to be known dangerous places.

YOU, by deciding to go upon a public road, accept the risk of injury or property damage by your mere presence in those places.  That is, you accept that not only may God do bad things (e.g. flood a road, drop a tree across it, etc) but also that humans are fallible and that travel upon public roads is an inherently dangerous activity that cannot be made safe.

Therefore when you choose to go upon such a road, an entirely voluntary act, by doing so you personally accept the risk of property destruction and/or injury that may occur as a result.  Write this into law.

That instantly and fundamentally changes the nature of said "insurance" from a mandatory thing to a voluntary one, where each person using the road chooses for themselves how much risk they wish to expose their person and property to on a financial basis.

If there is an accident your insurance is thus responsible, 100%, for the replacement of your property and injures within the limits of your policy.  You decide how much insurance to carry on your property and person, as it will never be paid to anyone other than you and you can choose to carry zero insurance and accept the risk to your person or property in its entirety.  This also instantly stops the duplication of coverage -- if you have accidental injury coverage in your health insurance (and most people do) why do you need it in a car insurance policy as well?

There is only one exception: An act charged criminally as a felony, which upon conviction voids the assumed risk doctrine.

So if I commit vehicular assault or homicide because I am intoxicated, and I am convicted of driving while drunk and injure or kill you with my vehicle, you (or your estate) may sue me for recovery.

But if the collision did not occur as a consequence of a felony act, that is, it's what we today call an accident, even when the accident results from an error in following traffic laws, unless the conduct rises to the level of felony misconduct you cannot sue the other party because they assumed the risk of mistakes by others in being there.

Folks, we have to stop looking to others to solve our problems.  I've been on the road since I was 16 with a driver license and have a metric ton of close calls, including some that but for the grace of God would have turned out very badly.  

But to a large degree -- in fact, in virtually every case auto accidents are avoidable. 

There are exceptions, of course, where even excellent situational awareness won't help you.  I nearly got rear-ended a couple of months ago sitting at a red light with a gal who approached at highway speed from my rear while texting (I could see the phone in her face in my rear-view mirror!) and I had zero in the way of choices -- there was cross-traffic coming through the intersection controlled by the light I was stopped at.  If she hadn't looked up she would have nailed me and other than bracing for impact (which I did!) there was nothing I could have done about it.  But those situations are very rare; most of the time if you get caught in a pile-up 10 or 15 seconds earlier, and sometimes more, you could have done something differently had you been paying attention and avoided it.

We will never stop the encroachment of these "industries" into our pockets on a "guns up the nose" basis until we accept responsibility for those risks that we voluntarily assume each and every day.  This is just one of many, but it's an important one -- and one where due to how insurance law is structured one state can make this decision and do it on their own.

Which state wants the jobs and economic prosperity that will come from grossly-increased purchasing power for its residents by breaking this monopoly game? 

View this entry with comments (registration required to post)

Sounds like a good claim, right?

On Friday, July 18, thousands of people marched through downtown Detroit to call attention to a major public health crisis as the city shuts off the water for residents who are behind on their bills.

Chanting, “Fight! Fight! Fight! Water is a human right!” and “Whose water? Our water!” about 5,000 Detroit residents and allies from across the country—including many who were in town for the annual Netroots Nation blogger conference—marched from the Cobo convention center to Hart Plaza near the Detroit Water and Sewerage Department.

Uh huh.

There's plenty of free water available right in Detroit.  It's in the Detroit River, which (shockingly) is much cleaner than it was a number of years (and decades) ago.

Get out your bucket, walk to the river, dip it, there you go.  Water.

The problem is that these people don't want the water that way -- of unknown quality, with them individually responsible for its potability -- for filtering it and perhaps boiling it before drinking it, and certainly not for disposing it once used.

Water and sewer systems don't build and maintain themselves and the fees for them are paid by the users.

There are people who claimed to be ten grand in arrears for water bills.  How the hell does that happen -- did you not pay the bill for 20 years?  It sure sounds like it!

Here you go folks on the water rates that the UN calls "exhorbitant":

Base connection charge for a 5/8" line (sufficient for a single-family home) is $6.30.  Each 1,000 cubic feet of water is $21.71; that's approximately 7,500 gallons.  For perspective modern showerheads are supposed to flow no more than 2 gpm, so if you take a 10 minute shower per day every day of the month that's 600 gallons of water consumed, or less than 1/10th of the first thousand feet.

Now here's the rub -- you also have to pay for sewage, and that's more than the water pretty-much everywhere, including in Detroit.  Your sewage charge is going to be about double the water price, basically. 

Oh by the way, it is here in Florida too.

You want piped water and sewer?  Someone's got to pay for it.  You don't pay a $100 bill for 10 years and run up 10 large in unpaid bills?  The only question I have is why you weren't cut off 9 years and 10 months ago!

Again, there's lots of water for Detroit residents available free of charge.  You just have to transport it from the source yourself, along with insuring that it's safe to consume.

For the service of transportation and sanitation you wind up expending resource -- either directly with your personal effort, or by proxy using money.

Pick one.

View this entry with comments (registration required to post)

Main Navigation
Full-Text Search & Archives
Archive Access
Get Adobe Flash player
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.