What's an Actuary?

One of the most common question asked of actuaries (or in my case, actuarial students) is "what does an actuary do?" In my experience, only about one in five people have actually heard of the profession and only about half of those have a reasonable understanding of what we do. Occasionally, someone will try to guess. Here are some of the good (and not so good) guesses I've heard.

• Are you studying to fix aquariums? (Aquatuary?)
• Is that something to do with fish? (Maybe it's my pronunciation)
  
• That's like risk management, right? (These days everybody manages risk)
• Oh, I covered some actuarial maths in my accounting major. It's basically calculating present values? (Yep, actuarial mathematics is largely just multiplying by (1+r)^-n)
• You're basically accountants but really good at maths. (Never call an actuary an accountant!)
• You're studying to be an actor? (It's definitely my pronunciation)
• Oh, Edward Norton's character from Fight Club? (Actuaries aren't great fighters)
• You guys try to guess what will happen in the future? (That's right, we're in the esteemed club of financial alchemists. A technical trader currently occupies the presidency)
• I did actuarial but it was boring so I dropped it. I am now a finance major! (No comment.)
  

Check back soon. This list is destined to grow.

I wish that all the ladies...

I learnt a really funny army-style camp song a few days ago. It basically involves a leader saying each line and the crowd repeating. Here it is:

I wish that all the ladies
Were sailors in a race
And I was the head wind
I'd blow in their face

I wish that all the ladies
Were lying naked on my bed
And I was (name)
I'd fuck my mate instead

I wish that all the ladies
Were potholes in the road
And I was the dump truck
I'd fill 'em with my load

I wish that all the ladies
Were bells in a tower
And I was Quasimodo
I'd bang 'em every hour

I wish that all the ladies
Were pedals on a rose
And I was the gardener
I'd wet 'em with my hose

I wish that all the ladies
Were sheep in the grass
And I was a Kiwi
I'd fuck 'em in the arse

I wish that all the ladies
Were sitting naked on my lap
And I was (name)
I wouldn't get erect

The News in Four Lines or Less

Three State Solution
The escalation in the Middle East, this time caused by rivaling Palestinian factions, highlights the need for a new direction; the so-called Three State Solution. The Three State Solution- two Palestinian states coexisting alongside Israel; with provisions for the creation of additional Palestinian states as other factions emerge.

The ALP's Industrial Relations Reforms
The Australian Labor Party has been tirelessly working to overhaul the inequitable industrial relations systems. Mr. Rudd contends that Prime Minister Howard's reforms have created scope for opportunistic employers, such as Mrs. Rudd, to exploit their employees.

The $800,000 Man
The self-destructive socialist lobby attained a victory of sorts this week, as confessed terrorist, Abu Muslim Australii (formerly known as David Hicks), arrived back in Australia. Naturally, the Australian taxpayer has footed the bill for associated legal and transportation costs, amounting to in excess of $800,000. This makes Hicks the most funded year nine dropout in Australia (Paul Keating dropped out of school in year ten).

Pauline Hanson Becomes Relevant Again
Ms. Hanson has launched a new vehicle through which to articulate her public policy: the United Australia Party. The former fish-and-chip store owner has expressed concern over Australia's immigration policy. Namely, she wants to abolish it.

State Labor Governments to Invest in Water Infrastructure
Nah, I'm just fucking with you.

The Case for the Death Penalty

It's just occurred to me that my posts have been quite left leaning of late. Ergo, it's time to inject some right wing venom into this blog. And what's more right wing than institutionalised revenge?

The case against the death penalty in Australia has been premised on the legacy of dubious executions. Today, with the advent of surveillance equipment and genetic testing these concerns are entirely unfounded. Properly legislated and with sufficient oversight, the death penalty may be an effective means of removing dangerous and non-reformable elements of society. Consider, for example, Martin Bryant. Evidently, there is no prospect of rehabilitation or parole. Furthermore, there has been no expression of remorse. So a question emerges- why is this man allowed to proverbially leach of the taxpayer?

The liberals will suggest that each life has intrinsic value. Ironically, the same people who routinely disparage religion seem to have embraced the Judeo-Christian philosophical view of divine manifestation. Nevertheless, what scope is there for this life to express itself in an isolated cell?

The liberals will suggest that capital punishment is inhumane. Lethal injection, electrocution, or my personal favourite- hanging, are painless and in most cases far more humane than the suffering that those eligible to be executed inflict upon their victims.

The liberals will suggest that capital punishment is empirically shown not to discourage criminal behaviour. This is a fact, albeit a disputable one, and certainly not an argument. The aim of executing criminals is punishment. Discouraging criminal behaviour is a sociological pursuit.

This is a brief post and I have deliberately avoided presenting a legally intensive paradigm. There are a number of workable options for the death penalty. The point that I am making is that the fundamental reason for repealing capital punishment in this country no longer exist. We can now ensure, completely, that those people who have been sentenced to death are in fact guilty of their crimes. All other arguments are incidental.

One more thing- the reason that most legal practitioners abhor capital punishment is the reduced potentiality for employment. Quite frankly, it's hard to suck cash out of dead people. The reader is advised to take the opinion of interested (conflicted) parties with a healthy degree of skepticism. Then again, I have no readers, so this statement is rhetorical. :)

Virginia Tech and the Second Amendment

When the world woke up to the tragic news of the Virginia Tech massacre, it was only natural for people to point the finger squarely at American society. The inertia of the United States to institute some type of meaningful gun control is, for a lack of a better word, criminal. And the rest of the world, myself included, is disgusted by the inaction of the American people.

It is difficult for outsiders to appreciate how profoundly conservative the American people are. Internally, America is viewed as an incarnation of God, the Founding Fathers are venerated as prophets and the Constitution is the Holy Scripture. Am I wrong, my American friends? Well, how else can one possibly justify the Second Amendment? The Second Amendment is a relic from the late 18th century which entitles Americans to bear arms and form militias. This legislation was indicative of the historical context in which the United States was born. Presently, there is no justifiable premise for it. Nevertheless, it persists because of a typically American obsession with maintaining the wishes of the Fathers.

So what of the Founding Fathers? How would they respond? One can be assured that they would be horrified by the 30,000 gun related deaths perpetrated annually. One can be assured that they would be disgusted by the scale of weapons penetration within their homeland. By opportunistically equating the right to bear arms with other freedoms afforded by the Bill of Rights, the firearms lobby has sucessfully convoluted the issue just enough to confuse the average patriotic American.

The second argument cited by gun advocates is even more absurd: guns don't kill people; people kill people. You have to be fundamentally deranged to make this argument, and have the intelligence of an amoeba to accept it. Guns facilitate murder. Guns are an efficient means of committing mass murder. Without access to a semiautomatic weapon, the Virginia Tech massacre may have been a homicide.

I am underwhelmed by the ability of the American people to relate the events of April 16th to their policy on weapons. This level of carnage will persist until American voters become mature enough to effect a change in legislation. The point of this post is by no means to berate the Americans. On the contrary, I write because I care about Americans and was deeply moved by this tragedy.

The Case for Gay Marriage

Emancipation, feminism and civil rights movements gradually eroded unjust social conventions and transformed Western society. Today, slavery is viewed as abhorrent and legislative discrimination on the basis of gender, race or religion is non existent. There is, however, an unacceptable form of instituted prejudice against gays. The absence of the right to a homosexual marriage strips the community of pervasive legal and civil rights. Further, the grounds against gay marriage are unconstitutional and unethical.

The tactics of certain homosexual rights activists have distanced many potentially sympathetic Australians. The lack of tact displayed during demonstrations by these activists indicates insensitivity to the social consciousness. Sadly, legitimate arguments for gay marriage were drowned out by outrageousness. Opportunistically capitalising on social concerns, religious opponents argued that gay unions undermine the holy foundations of marriage. What most people are oblivious to, and what is very rarely addressed, is the fact that the absence of a legal recognition of homosexual relationships necessarily results in a limitations of their statutory rights. Consider cross insurance. Typically, spouses cross insure each other to expedite the claim payout process. Self insurance is less preferable because terminal payouts constitute part of the deceased's estate and are generally delayed by legal red-tape. The Insurance Act precludes seeking cover in instances where there is "no insurable interest". Conceptually, this means that one can't insure against a stranger's death. Legally, homosexual relationships do not constitute an insurable interest. Consider pecuniary concerns. Homosexual partners do not qualify for a myriad of tax exemptions and other financial relief afforded to heterosexual partnerships. These include, but are not limited to; superannuation spousal salary sacrifice tax breaks, family private health insurance cover, inheritances taxes (pre-reforms), family welfare packages, income family tax benefits and offsets. Consider power of attorney. Homosexual partners cannot bestow upon each other powers of attorney. Addendum, homosexual partners cannot remain with each other in hospital past scheduled visiting hours. To reiterate, these citations are by no means complete.

Having established the fact that homosexual couples suffer judicial discrimination, it is pertinent to consider the rationale for why they do so. It is argued that a marriage is legally defined as the union between a man and a woman. Opponents to gay marriage contend that there is an explicit expression of gender. The Australian Constitution deliberately uses the terms "man and woman" to illicit the notion of adult cognition. The emphasis is clearly upon the legal capacity to consent. In fact, the gender is incidental. To better comprehend this point, suppose that the Constitution read "a marriage is the union of an adult male and an adult female". While it is likely that the Constitution envisaged the traditional view of marriage, the use of the terms "man and woman" seeks more to assert the notion of age and maturity than make any valued judgment about gender. And that's what gay marriage is about at the end of the day- the consent of two adults.

Regardless of one's view of homosexuality, one must recongise the legitimate grievances that funnel through as a result of an inability to wed. The advancement of gay rights doesn't equate to a condonance of the homosexual lifestyle, but rather the alleviation of social inequality.

The Case Against The Criminalisation of Drugs

Proponents of drug prohibition often cite three key motivators as justification for their position, these are: deterrence, harm minimisation and crime reduction. Adopting this taxonomy, it is my thesis that criminalisation is a failed policy that fails to favourably affect any of these objectives.

Central to this discussion is the notion of conventional wisdom. Economist John Kenneth Galbraith coined the term to describe an established and sacrosanct idea which may or may not be true. Some common pieces of conventional wisdom are: real estate is a superior form of investment to equities, elevated levels of inflation are undesirable and the criminalisation of narcotics is essential. These statements are convenient, appealing and ostensibly axiomatic- and herein lies the problem. When an idea becomes conventional wisdom, it becomes impervious to scrutiny. "Conventional Wisdom has a property analogous to inertia, a momentum, that opposes the introduction of contrary belief; sometimes to the point of absurd denial of the new information set by persons strongly holding a conventional wisdom view." (Wikipedia) For this reason, reader, my contention may initially seem to be incongruous.

It is suggested that the drug prohibition policies act as a deterrent by primarily restricting supply and signaling to the public that drug use is dangerous. The former point is laughable- even the most staunch prohibitionist would be hard pressed to argue that drugs are anything but available. Despite billions of dollars being spent annually in law enforcement, drugs are abundant. As for the latter point- it's simply non sequitur. Criminalisation in of itself is ineffective in communicating the adverse effects of substance abuse. Rather, education is achieved through grass roots health care programmes within the community. To appreciate the profound absurdity of this argument consider a hypothetical proposal to contain the HIV-AIDS tide in Africa by criminalising unprotected sex.

Prohibitionists claim that drug laws minimise harm. This claim is often emotive and deliberately convoluted. It is imperative to recognise that challenging the above assertion does not equate to mitigating the impacts of drug use itself. Substance abuse is devastating on a social, individual and family level. Ergo, the production and distribution of drugs should be regulated to ensure quality, purity and hygiene. Recently, Australian states flirted with the idea of installing safe injecting rooms- facilities where drug users were provided with clean equipment, a sanitised environment and medical assistance, including dosage guidance and rehabilitation options. Do such facilities promote drug use? No, they contain them. Such an initiative is a pragmatic response to the drug problem and constitutes legitimate harm minimisation: since users do inject, it is preferable that they do so safely. Unfortunately, this is only half the picture. Presently, there is an absence of oversight in the manufacturing of narcotics. Less euphemistically- drugs are being prepared in unsanitary labs, at unspecified concentrations, using unobservable constituents. What is it in the social psyche that precludes the transparent production and regulated distribution of narcotics to addicts? Clearly, policies of engagement, rather than isolationism act to substantially minimise harm to all stakeholders.

The final vestige of prohibitionist reasoning is the fallacy that criminalisation of narcotics reduces crime. First some history. The so-called War on Drugs properly began in 1971 during the Nixon administration, with the term attributable to the former President. Previous experiences with alcohol prohibition were disastrous and many Americans were skeptical. However, Nixon cleverly assimilated the idea for many Americans by relating it to the very relevant and palpable War on Crime (a tactic not too dissimilar to the current Administration's claims that the heroin trade funds global terrorism- legitimate though they are). Narcotics became the underlying cause of crime; the motivation for burglaries, gang turf wars and murder. Despite the ensuing splurge of billions of dollars combating domestic (crack cocaine) and international (cocaine, heroin) drug syndicates, effectively resulting in a series of temporary opiate shortages, paradoxically crime rates were to continue their exponential growth well into the 1980s. Subsequent economist studies revealed that drug busts which substantially decreased supply coincided with a spike in robberies. They concluded that the addictive nature of narcotics makes drugs an inelastic good- that is, as prices rise, demand remains roughly constant. The illusion that criminalisation of drugs alleviates crime is a proven falsehood.

As with Prohibition and abortion, the criminalisation of drugs stems more from a desire to protect society from a complex reality than to legitimately alleviate the social impacts caused. Ultimately, the notion that undue regulation (particularly in relation to people's rights to affect their own bodies) creates criminals rather than solves problems will permeate.