The Los Angeles fires are still raging. Faced with heavy losses, the bureaucratic clique has started a “race” to pass the buck to each other.🤣
L.A. Mayor Karen Bass and Fire Chief Crowley are “ripping” into each other. The chief says the mayor cut the fire service’s budget by $17.6 million, so the department is severely underfunded, affecting firefighters’ ability to do their jobs and maintain their equipment; that $7 million was cut from overtime, severely limiting the department’s ability to prepare for, train for, and respond to large-scale emergencies; and, that the department is understaffed and there’s no water inside the hydrants, etc.
Well, I found that the mayor is quite “correct” in sex and skin colour.🤣🤣🤣 She performs like an idiot when answering the questions form reporters and public. But the chief is even more “correct” than the mayor; she is a lesbian lmao🤣.
A budget of $17.6 million, a mere 2 per cent of the total budget. Is that why there is a ‘severe shortage’ of funds to put out the fires? Nonsense!
Overtime pay, this whole thing is just pretty disgusting. Does a fire have to be Monday to Friday and within eight hours? Since there’s no more overtime pay, they don’t turn out, so they don’t have the ability to respond to emergencies?
Is it possible that firefighters are so underpaid that no overtime pay creates an effective incentive? According to the official websites, the firefighters in the Los Angeles metropolitan area make $60,000-$120,000 a year, and Crowley makes $430,000 a year. There are fire chiefs who make up to $800,000 a year by way of overtime pay. So the taxpayers are paying good money to support a bunch of scabs who won’t work for less overtime pay?
Crowley is a lesbian and her deputy chief and assistant are all LGBT members.🤣 When recruiting firefighters, instead of looking at the person’s technical skills, what’s essential is their colour and sexual orientation, to meet the racial quotas set by the state of California?
Last September, a fire in Northern California destroyed more than 230 homes and forced the evacuation of tens of thousands of people. As it turned out, the fire was identified as being caused by a California firefighter, 38-year-old Robert Hernandez, who set five fires while off-duty.
Arson by firefighters, which happens a lot in the United States, is not an isolated case.
This is something that is both nuanced and taken for granted. Firefighter, arson while off-duty, so that he will be called back to fight the fire, so that he can receive overtime pay, everything seems to be explained.
But this is actually a strong metaphor that reveals the truth about the world: the guy pretending to put out the fire is exactly the arsonist. Government intervention creates all the disasters, then comes out and pretends to solve them, and attributes the cause of the disasters to nature, and to the fact that not enough intervention has been done, and that the solution is to impose more intervention. Closed loop! Geniuse!
From the fact that the Mayor and the Fire Chief are “tearing” each other apart, and that the firefighters setting their own fires, we need to understand one thing: never assume that Los Angeles government officials have no interest in benefiting themselves or others, and that the first thing that comes to mind, of course, is their own interest in any event, which is self-preservation, and how to skim off the blame!
What they always want is to take the most tax dollars and do the least amount of work.
From the shoddy rescue and emergency response capabilities of the City of Los Angeles and the Fire Department, we have to understand two truths:
Firstly, anyone who puts expectations on the government and abandons self-responsibility is naïve;
Secondly, all monopolies are bound to be inferior in quality and high in price. If you monopolise food production, you will starve to death; if you monopolise hotels, state-run hotels will beat up their customers; if you monopolise law and order and justice, you will pay higher and higher fees (taxes) and get worse and worse service; similarly, if you monopolise firefighting, you will burn L.A. to a red-lava mess while they are still indifferently shrugging it off.
There is a lot of people, scolding the monopoly enterprises overcharged how much money they have all the day, but on the issue of law and order, justice and fire protection where human lives are at stake, they always believed that the state monopoly is reasonable. This is logical inconsistency! There is also a large number of people criticizing the monopoly only because they haven’t taken enough advantage and benefits, if the state-owned monopoly can make themselves not pay, guess what? They will 100% support monopoly.
The firefighting monopoly was a big reason why the LA fires got out of control.
Firefighting in the free market simply doesn’t make the cheap mistakes they do and treat human life like dirt.
With market-based firefighting, there is no DEI problem at all.🤣 Firefighting is a profession that requires rigorous physical, technical, and mental fitness. Market-based firefighting organisations would never be crazy enough to recruit a large number of women and LGBT members in and recruit firefighters under so-called racial diversity quotas. Men are more suited to firefighting, it’s biological, it’s not sexist at all, it’s just common sense. Recruiting a large number of LGBT members into the fire service, are lesbians better suited to fighting fires?
Firefighters will also be well paid under market conditions. Because firefighters are such a dangerous profession, higher wages are necessary to compensate for those risks and to recruit personnel. Firefighters who are highly skilled in their profession will get top dollar. But it has nothing to do with budgets, it’s the result of voluntary payments from consumers who ‘budget’ for them.
They don’t get paid overtime, since it’s already included in their salary. The fire service is on call 24 hours a day, and it’s ridiculous to talk about overtime pay.
Whether firefighters are scarce or not is immediately reflected in the price (wage rate). When firefighters are in short supply, their wage rate will increase, attracting labour from other industries, otherwise, firefighters will be lost. The market will naturally achieve a relative equilibrium in the number of firemen supplied. There will definitely not be a situation where the monopoly of firefighting means that no matter how many people are given, they are too few, and no matter how much budget is given, it will not be enough. The reason why a state-owned enterprise is full of redundant staff and keeps losing money is that its income comes from the taxpayers, not from the voluntary monetary votes of consumers.
Will there be a situation where there is no water in the reservoirs, no water in the hydrants, and the fire service doesn’t even know about it? It won’t. The fire brigade will always be on alert, always have enough reserves, always have equipment available in case of an emergency.
Market-based fire service organisations will not slacken in the exercise of their fire-fighting duties. They will be the first to arrive at the scene and do their best to bring the fire under control and extinguish it, and they will use the most advanced technological equipment for fire-fighting in the tall buildings. This is precisely an opportunity for them to demonstrate their capability and image and attract more clients, and there is no better advertising campaign than this.
This is not to say that market-based fire-fighting organisations are capable of extinguishing all fires and eliminating all losses. Rather, I would say that they’ll minimise losses. Markets are not omnipotent, but they never fail.
Because what important is that they don’t wait until there’s a fire to put it out – which is vital, of course; but rather, they prevent it from happening and minimise the chances of it happening.
That’s because firefighting organisations in the free market are most likely to be part of insurance organisations, and the source of their fees is the premiums paid by consumers.
How would an insurance company collect premiums to feed a costly fire brigade?
Well, price discrimination by segmenting the risk pool!
Whichever place or neighbourhood has the lowest risk of fire will have the lowest premiums. While the opposite has higher price.
For example, if a community with thatched and wood-built houses is adjacent to a dry forested area, the premium is bound to be high, otherwise the insurance company will be reluctant to underwrite him. On the other hand, a community with full fire protection facilities and the use of fire-resistant materials is on the low side in terms of fire hazards, and hence the premiums are very low.
Insurance companies will collect and consolidate information from all aspects, even including criminal databases, and use big data to carry out insurance actuarial calculations to compute the class probability of fires in a certain geographical area or district and estimate the likelihood of fires, so as to collect premiums accordingly.
This is the “lifeline” of the insurance industry.
If the insurance industry is not allowed to subdivide risk pools, conduct insurance actuarial calculations, and price “discriminate” on this basis, insurance as a business will not be established. This is because insurance is a voluntary redistributive mechanism whereby the insured co-finance and share the risk in the event of a small probability of an accident occurring. For example, in the case of so-called health insurance, if it is not permitted to put an 80-year-old man and a 20-year-old chap in different risk pools and charge them different premiums, it would mean that the 20-year-old chap has become a “Good Samaritan”, and the result would be that he withdraws from the insurance.
Similarly, if the law requires the same premiums to be charged for a brick structure and a wooden house, then it means that the probability is that the owner of the wooden house will be the only one to enjoy the benefits, and then the owner of the brick structure will surrender his policy.
Price discrimination is perfectly normal in a market economy, and it is exactly the way to incentivise all people to be self-responsible and to keep moving towards a safe and healthy lifestyle. It’s only absurd to charge the same car insurance for someone who drinks and drives all day as someone who lives a strictly disciplined life.
This actuarial subdivision of the insurance pool by the insurance industry and the introduction of differential pricing will serve a good purpose. Firstly, it will lower premiums considerably, so that most people will be able to pay very low premiums to be compensated for future risks; secondly, it will attract more customers because of lower premiums, so that the poor will be able to afford to be insured, and it will expand business income, improve claims-paying capacity and equip the fire brigade with greater professionalism and efficiency; and thirdly, it will provide incentives for the ‘good’ and weed out the ‘good’ areas. Thirdly, it will incentivise the ‘good districts’ and eliminate the ‘bad districts’ because the ‘bad districts’ will face high premiums or even not be insured, thus facing huge property risks, and therefore its population will flow to the ‘good districts’. Fourthly, it will create a strong ‘positive externality’ because if a fire breaks out in the woods outside the neighbourhood, the insurance company’s fire brigade will quickly extinguish it, eliminating any possible fire hazards that might otherwise injure its own customers and result in larger claims for them, thus creating a safe environment for all – even those who are uninsured. Even those who are uninsured benefit greatly from this.
In short, insurance companies have the greatest incentive to guard against fire and any catastrophe by training a highly specialised fire-fighting team equipped with the most advanced equipment in the market, always checking for safety hazards in each area and standing by to eliminate any catastrophe that leads to a diminution in the value of their clients’ property.
For no other reason than that it would be placing its own operations in high jeopardy if it didn’t, would be paying out huge amounts of compensation, would be losing customers, and would be putting him on the road to losses and closure.
Profit is a good thing, it forces companies to obey the dictates of the consumer and to keep lowering the price of their services; the result of its elimination is that the consumer says nothing and bears more costs (taxes and even lives) as a result.
We have to trust the market. Since the market can best solve the problem of eating and clothing, it can certainly do a better job of solving the problem of rescue, firefighting, and security.
It is also clear from the above analysis why many insurance companies have cancelled their policies for this California fire.
The reason is simple: California, the famous white-left state, under the erosion of “political correctness”, does not allow insurance companies to subdivide their insurance pools and differentiate their pricing, as this is not in line with the California government’s ‘anti-discrimination’ and ‘egalitarian’ legislation. As a result, insurance companies are left with no choice but to give up and a large number of homeowners are left without any compensation for their property losses.
And of course, insurance companies can’t cover behaviour that can be actively controlled and has no long-term probability distribution. This is because it is an incentive for some people to take active steps to earn premiums. For example, suicide, unemployment, arson, business losses, and most health insurance, is just not insurable because it can all be actively controlled.
However, on the one hand, the United States Government, in the name of anti-discrimination, does not allow insurance companies to break down risk pools and discriminate on price, while on the other hand, it forces a large number of uninsurable matters to be included in the insurance coverage, and insurance companies are discriminating if they do not agree to do so. For example, the vast majority of states require insurance companies to cover treatment for alcoholism and drug addiction; many states do not allow insurance companies to ask any questions about AIDS because of anti-discrimination bills; and sickle cell Anaemia, which mainly affects black men, may not be investigated.
The result is that, first, insurance companies have to deal with an increasing number of uninsurable matters, and because having insurance coverage, in turn, incentivises certain undesirable behaviours, they have to raise premiums or lose money;
And, second, low-risk people, by not being able to get into a different insurance group, are forced to be in the same group as high-risk people, which means that these low-risk people act as living lightning rods, forced to pay premiums to pay for the high-risk people to pay for them.
Third, more and more low-risk people are dropping out of insurance because of higher prices and the fact that low-risk people are losing out.
Fourthly, fewer people are insured but more people are paid out, so prices can only continue to rise or else the insurance companies will have to go out of business.
Fires break out and homeowners lose their homes because they don’t have insurance, find out why. The reason why Americans get crushed by the insurance company and shoot the CEO of the insurance company, is also found. 🤣
At present, the reason why insurance institutions around the world are unable to give full play to the above functions is not because of its own problems, but because the insurance market is in the midst of severe regulation, which has broken the legs of insurance companies and thus hindered the fulfilment of its functions.
This is of course deliberate. It is like disarming you so that you cannot protect yourself, and then you can only be entrusted to a monopoly.
References
Friedman, M. (1962). Capitalism and freedom. University of Chicago Press.
Hayek, F. A. (1944). The road to serfdom. University of Chicago Press.
National Fire Protection Association. (2021). U.S. Fire Department Profile 2019. https://www.nfpa.org
Ostrom, V., Tiebout, C. M., & Warren, R. (1961). The organization of government in metropolitan areas: A theoretical inquiry. American Political Science Review, 55(4), 831-842. https://doi.org/10.2307/1952530
Savas, E. S. (2000). Privatization and public-private partnerships. Chatham House Publishers.
The Economist. (2025, January 8). Los Angeles against the flames. The Economist. https://www.economist.com/united-states/2025/01/08/los-angeles-against-the-flames
U.S. Fire Administration. (2020). Fire in the United States 2008-2017 (20th ed.). Federal Emergency Management Agency. https://www.usfa.fema.gov