Legal, Observations, Prediction

What to expect for the 2020 election?

pollywannamath

On July 30, President Donald Trump recommended delaying the national presidential election due to the COVID-19 pandemic until citizens would be able to vote “properly, securely, and safely.” Senate Majority Leader Mitch McConnell quickly confirmed that the election will occur on November 3 and that the power to delay elections is a legislative power.

Given the current pollical climate and severity of the COVID-19 pandemic, November 3, 2020 will not proceed as smoothly as it did in 2016 or 2012. What follows is my analysis of the challenges, threats, and opportunities of the 2020 presidential election.

What would happen if Congress delays the election?

If Congress were to delay the election far enough that the results could not be certified by January 6, the Presidency (and Vice Presidency) will still end on January 20. This date cannot be changed, as it would require a Constitutional amendment. If the election has not been certified by the 6th, a few others may be eligible to step in as interim (including Nancy Pelosi).

If the election were delayed a few days, but all necessary parties are able to certify the results by January 6, then a delay may become feasible. Provided, that the United States has a president ready to take over on January 20, any election delay will not disrupt the political system.

What about a universal mail-in ballot option?

34 states already allow absentee voting without providing a reason and there is bipartisan support for an expansion of absentee voting nationwide due to COVID. Practically, absentee voting without excuse (or using COVID as an excuse) is the same as a universal option for mail-in voting. Some states plan to go farther by proactively sending mail-in ballots to all registered voters.

Critics contend that voting-by-mail is more susceptible to voting fraud. There is little reason to believe mail-in votes are more likely to be fraudulent. By example, the Heritage Foundation found only 14 cases of attempted mail fraud out of roughly 15.5 million ballots cast in Oregon since that state started conducting elections by mail in 1998.

Why not conduct voting online?

This is not a good idea. I cannot stress this enough. Unlike voting by mail, online voting loses the physical record and is rife with cybersecurity concerns. Because I don’t have credibility on the software development process, I’ll leave this one to the experts:

Via XKCD
Tom Scott explains the concerns well. Highly recommend his channel.

Is normal, in-person voting possible?

Absolutely. Many Americans will vote in person this November. However, voting “normally” might not be as easy as it has been in past elections. In April, the state of Wisconsin ran state elections during the COVID pandemic. Milwaukee, which normally hosts 180 polling locations, had only five open during the election. Polling locations were limited due to a limited number of available workers and locations suited to social distancing. As a result, voter turnout depressed.

So what do I think should happen?

The President’s term will end January 20. That date will not, and should not, change. Congress must certify the results of the election on January 6, I would not change that date either to account for any legal or procedural challenges to the results. Congress should extend the voting window past November 3 for remote voting with a law that supersedes state election laws. States should be given the mandate to keep voting booths open from 8am-8pm minimum, and not close until all who arrived had the chance to vote in a socially-distanced atmosphere (even if that requires keeping polling locations open into the 4th). Additionally, polling locations should reserve a portion of booths for appointment-only voting for those who are in high-risk populations for COVID-19. Those that make it to a pooling location but are unable to vote at the time due to COVID fears or a need to leave before a location is ready, should be given a ballot that can be sent by mail until the 5th.

All states should be required to provide a universal mail-in ballot option. If absentee voting receives bi-partisan support, voting by mail should as well. I doubt that 2020 will set a record for high voter turnout as a percentage of the available population; federal and state governments must making voting as easy and safe as possible.

The key to this approach is to retain as much of the physical voting record as possible. The obvious risk to allowing a longer window for mail-in and in-person voting is that polling stations will receive duplicate ballots. The Federal Government should allocate the funds and resources necessary to allow states to identify and process duplicate ballots correctly. This would be a wise use of funding. States should not be allowed to disclose any results until a pre-determined date when all ballots have been submitted.

Prediction

How will we combat the next recession? Military Edition

pollywannamath

Historically, the US government has had an arsenal to combat recessions. Not every weapon has worked every time, but the government has tried sending stimulus checks, lowering interest (discount and federal funds) rates, quantitative easing, and cutting taxes to varying success in past recessions. Economists bitterly argue about which monetary, fiscal, and governmental policies In June, the United States officially entered (and exited) a recession. While that recession did not last long, another may.

Interest rates are at historic lows. The Federal Reserve is buying a lot of corporate bonds. The national debt is skyrocketing. Stimulus checks are already utilized. The government is providing low-interest loans to small business. Economists debate whether the government could continue or increase these actions, but for the sake of argument I’ll posit that the government will not able to continue these activities. The government used its weapons and the arsenal is running low.

Occasionally I plan to write about the non-traditional approaches the government can take to combat future recessions and determine if these approaches will remain viable. For consideration today is military recruitment to boost employment and aid urban areas in recession.

Military recruitment generally spikes during recessions. Enlisting offers an individual an opportunity for stable income. Moving young men away from unemployment in cities to controlled military bases helps reduce unemployment and helps the government minimize the negative societal impacts of recession. Historically, a 1 percent change in civilian unemployment yields a 0.6 percent increase in Army recruiting; however, that may not be the case in the future.

Increasing military recruitment during the next recession will be tougher than it was in 2008 for a few reasons:

Without changes to public perception and the makeup of the military, military recruitment will be a less effective tool to fight recessions than it was in 2008.

Business, Prediction

Why I Was Wrong: Used Car Prices

pollywannamath

In March, I told someone to wait before buying a used car. COVID-19 was starting to cause lockdowns and promised to cause layoffs. In April, I gave the same advice. I gave the advice in May and in June. Now into July both wholesale and retail used car prices have spiked.

To examine why I was wrong, it’s important to examine the underpinnings of my advice. I assumed that COVID and COVID policies would cause a spike in unemployment and result in fewer people able to purchase vehicles of all kinds (new and used). I anticipated that defaults and repositions would spike in the summer and that supply would boom. Each month would bring worse COVID news, and each month would bring fewer people to car lots. With people working from home and potentially selling vehicles to stay afloat, increased repossessions, and depressed demand car prices had to sink with each subsequent month of the pandemic. It was calloused thinking, but I couldn’t think of an alternative model for car prices.

There was an alternative model. In this model prices of used cars rose as a result of COVID. There were a few elements that I was (sadly) correct about in March, unemployment rose and each month brought worse COVID news. My projection was proving to be prescient in April as used car prices plummeted. In May, it was clear that my projections were proving false in the medium-term.

My projection did not account for many of the reasons that used car prices jumped this summer. Those reasons include:

  • Public transit became unattractive during the pandemic for those who needed to commute throughout the pandemic. (Positive demand shock)
  • The CARES Act provided the unemployed with an $600 dollars per week enabling many to buy affordable used cars even while unemployed. (positive demand shock)
  • Trade-ins slowed because dealers incentivized lease renewals. (negative supply shock)
  • Car manufacturers closed factories leading dealers to prioritize used-car sales. (negative supply shock on new and used cars)
  • Lenders initially offered relief on auto loans at the start of the pandemic (although this slowed in May-July) which prevented the spike of repossessions I anticipated. (negative supply shock)

This series of unanticipated shocks, along with others of which I am still not aware, led to an increase in the price of used cars. To prevent missing the mark to the same extent in the future, what will I incorporate?

The government did not allow citizens to fail economically in the way that I anticipated that it would. I should know, especially in an election year, that the government will keep people (and businesses) afloat when it is politically beneficial. I also should have accounted for those who bought cars to escape public transit, in retrospect that was a pretty obvious component of a pandemic that requires social distancing.

What do I project for the next six months? Will I improve my projection based on the learnings above?

I anticipate that the price of affordable used cars (older than 2010ish sedan) will remain stable through the year. These prices will remain high because people will continue to avoid public transit and there will be some bolster to unemployment benefits though November at minimum. More expensive used cars will suffer. Dealers are offering irresponsible financing offers that include an 84-month option, as an example. Buyers will see lower monthly prices and agree to loans that will last longer than the vehicle they purchase. When its time for a new vehicle they will be trapped with negative equity and require a similarly predatory loan. Rinse and repeat.

Long-term I have concerns about the new and used auto market. People who bought vehicles to escape public transit will return to public transit and sell the vehicles. The increased unemployment will end. Millions of car loans are in deferral programs already, those period will end (and some are). I doubt the repossessions will come this year, but I think they will come. The rise in Americans trading in vehicles with negative equity is not an indicator of a strong market. The current COVID-related financing offers will not improve the scenario three years from now. Hopefully, I will write another post of why I was wrong in a few years.

Business, Innovation, Observations

GoodRX? BadRX? How to think about prescription Discount Cards

pollywannamath

When I first saw an advertisement for GoodRx, I assumed it would be a fad for 6 months and then I would never hear about it again. It has been over a year and I still watch their bad Monte Hall commercial before every fifth YouTube video.

Before I describe GoodRx and pass judgement on it, I should describe a little of the prescription market. Major pharmaceutical companies manufacture drugs and determine a list price that will allow them to hit a target profit margin. Much like for clothing or vehicles, the MSRP is not the amount that an average person will pay; the cost to consumer depends on many downstream factors. The pharmaceutical company will sell to a wholesaler, who, in turn, sells to a pharmacy. Pharmacies have relationships with third-party payer and their wholesalers that cause price variance of the same drug between pharmacies. At each level, a little profit is taken. On the demand side of the market, consumers often have two options:

  • purchase the prescription in cash without insurance.
  • purchase the prescription using insurance.

Insurers don’t determine which drugs will be covered under their plans, nor do they determine the price of the drug for their members. Insurers contract that work to a Pharmacy Benefit Manager (PBM). Pharmacy Benefit Managers determine which drugs will be covered by a plan and what a member will owe for the drug, the PBM does not need to disclose the real price of the drug. Insurers pay the PBM a fee for administering the drug plan, and the PBM keeps any rebate or discount that they receive from the pharmaceutical manufacturer. I could write at length on PBMs, but for the purpose of this article, I’ll only note that the position of PBMs are controversial. Some claim that PBMs save consumers money, others note that PBM profits continue to grow at an alarming rate.

GoodRx, and other prescription discount cards, can be thought of as a self-serve Pharmacy Benefit Manager for the uninsured. GoodRx identifies the lowest cost location for a drug in the consumer’s area and negotiates rebates and discounts with pharmaceutical companies for further discounts.

Does that mean that my initial skepticism about GoodRx was unwarranted? Mostly yes. The business model is sound and prescription discount cards are legitimate. However, GoodRx is not a panacea and I have two primary concerns about its use:

The second point deserves some clarification. In 2018, over 43% of Americans were enrolled in a high-deductible health plan. In these plans, a member will generally pay for 100% of their care (either out of pocket or using an HSA/FSA) up to a predetermined dollar amount or deductible. The health insurance industry has a lot of nuance that I can’t begin to cover in this format, but understanding the concept of a deductible is the piece relevant to GoodRx. Deductibles can include or exempt pharmacy costs based on the member’s plan design.

GoodRx cannot be combined with insurance. For many on high-deductible health plans, GoodRx can appear to offer lower cost drugs than even the copay offered by the pharmacy benefit manager. These apparent savings are not as they appear. Over a year, because insurance will often pay for the drug once a deductible is met, members in the scenario described above will often be better off using their insurance and paying a little more early in the year. GoodRx does not make that evident.

GoodRx is a good option for those who are uninsured, or know their current insurance offering and can account for anticipated yearly cost of their drugs. It is not likely a good solution for all. Especially those who would save a little in the short-term and, as a result, spend more over a year by forgoing their insurance.

Business, Innovation

The Commercial Furniture Market is Shifting pt.2

pollywannamath

I encourage you to start with part one, before reading this post, to get the full picture of the shifting landscape of commercial office furniture.

I started part one by praising office furniture manufacturers, Haworth, Steelcase, and Herman Miller, for creating ergonomic furniture that remains comfortable for hours. Furniture designed with ergonomics in mind is incredibly beneficial. Not only will a bad working set-up lead to soft-tissue injuries and musculoskeletal disorders, it will lead to productivity loss.

When my employer announced that they were going to shift to work-from-home for the duration of the COVID pandemic, I went to a local office furniture reseller and bought a Leap v2 chair (highly recommended) and a sit-to-stand desk riser. With an external keyboard/mouse, a second (and third) monitor, and a few books to ensure everything is the correct height, I am currently writing from a home office that passes even the most stringent ergonomic standards.

I live with my significant other. She works from home, and did prior to the COVID outbreak. When I started work from home, it was clear to both of us that it was time for her to have a home office set-up that works for her, at least as well as mine does for me.

Should be easy, we could go to the same store and pick up a similar home office set-up. My set-up works well for me. It should work for her as well.

There is a small, but important, difference between my significant other and I. Size. She is petite. As it turns out, the furniture that is so well designed for me and makes it possible for me to work all day, is not suitable for her.

If I have any female readers, what I said probably came as no surprise to you. It shouldn’t have been a surprise to me. When women are more likely to be hurt in car accidents, have worse medical outcomes due to lack of research, and work in offices that are too cold for them, because of a series of design biases that favors men, why should I be surprised that it was difficult to piece together a home office built for a petite woman?

The standard office desk is between 28 and 30 inches tall. We needed a work surface about 24-25 inches tall when seated to accommodate her frame. When she wanted to work standing, we needed a desk between 37-39 inches tall. The office furniture store that sold me my work-from-home set-up did not carry desks that short. We checked Wayfair for options, and most computer desks had a worktop about 30 inches high. After weeks of searching online and in-person, we could not find a regular desk that fit her needs and our budget. Even sit-to-stand desks did not meet her requirements. All but the highest end options had minimum heights greater than 25 inches.

Chairs were hard to find as well. My Leap wasn’t as comfortable for her because the lumbar support in the back isn’t height adjustable. Other chairs did not lower far enough to fit under a 25 inch desk; those that did had a seat depth that was too big for her to touch the back of the chair and keep her knees at a 90 degree angle.

No, putting a footrest down does not magically solve ergonomic issues with a chair.

I’m pleased to report that we found a workable solution. Although we could not find one for purchase locally, the Aeron Chair deserves special commendation for serving all heights and weights. We ended up purchasing an activity table for a desk, added some small drawers below, and the sit-to-stand riser above. This set-up meets her needs and allows her to work comfortably through the day.

But why was it so hard? And why did we need to think outside of the box to find furniture?

  1. The three Office Furniture suppliers I mentioned above do not make enough office furniture that accommodates smaller, and traditionally female, bodies.
  2. Offices buy furniture suited to the average male frame and assume that bigger is better.

The office landscape is changing. Women outperform men in college education, the gender pay gap is shrinking for women who are below the average age of women that take maternity leave. There are good reasons to believe that women will overtake men as the most successful office workers within my lifetime. Both the furniture suppliers and office managers should take note and purchase furniture that will work for all parties. Not doing so will eventually lead to an inability to attract top-talent.

When buying sitting desks, offices should demand that the desks are height-adjustable from 22-32 inches. Standing desks should start at 22 inches and offer the ability to raise to meet the needs of someone who is 6’6″. Chairs should either fit all frames, or offices should buy a selection of sizes. Monitor arms should be employed to allow workers to adjust their screens to meet their eyes. If employers demand that furniture meets the needs of their employees, the furniture manufacturers will respond with better selection.

To learn more about your specific needs review an ergonomic calculator.