Richard V. Rupp

October 18, 2023

Welcome to my monthly RUPP'S NOTES & FBI SPECIAL AGENT HARTMANN SERIES post. I'm novelist Richard V. Rupp, writing from Burbank, California.

 

Yes, I'm feeling the heat. Last month was the hottest September in recorded climate history by an extraordinary amount. And we are now in an unusual mid-October heatwave. I'm wondering if the heat is getting too much for our human minds. What a terrible start to October with respect to human conflict. We now have two significant wars inflicting massive pain and suffering on millions.

 

It seems many people are trying to escape the real world by going to the silver screen world of Hollywood. At least those who love Taylor Swift are. Her Eras Tour concert film led the box office in its debut weekend, bringing in $92.8 million. It is now the biggest concert film of all time. It also broke the record for the widest-released concert film in history, appearing on more than 3,850 domestic screens. Thank you, Tayor, for creating 2 hours and 45 minutes of relief from a world in crisis and providing a much-needed shot in the arm for theatre chains that have been struggling. I noted that the theatre's merchandise sales, including Taylor Swift popcorn tubs and soda cups, were selling like crazy.

 

For the movie industry crowd here in Burbank, the past few months have been like a roller coaster ride. The crowd I hang out with had been down because of the lengthy writers' and actors' strikes. Then, with the settlement of the writers' strike, there was a high belief it would lead to a quick settlement of the actors' strike. When that did not happen, depression again set back in. The current feeling is that the actors' strike will continue into next year.

 

Last night, I took my mind off what's happening in the world by watching Dancing with The Stars – Disney 100 Night. I've been a fan of the show since it started. And my son Brian often works at Disney. Their headquarters and principal movie studio are just a short distance from my apartment.

 

Hollywood lost a great star last week with the death of Suzanne Marie Somers. She was loved by all in the Hollywood community and by her numerous fans who remember her as Chrissy Snow on Three's Company and Carol Foster Lambert on Step by Step.

 

As a writer, I did note that the summary document for the Writers Guild of America and studios agreement that writers can choose to use AI when performing writing services, with the studio's permission.  But scribes couldn't be made to do so. And the studios cannot give writers AI-generated material without telling them.

 

MICROSOFT BING AI definition – A writer is a person who writes or produces literary work, such as a screenplay for a motion picture. A scribe is a person who writes or copies documents.

 

BELT AND SUSPENDERS?

 

It troubles me that our National Representatives ended last month more worried about a dress code than initiating and passing legislation. Our country is close to being a gerontocracy ruled by older people. The average age of the Senate is 64 years. Believe me, the way we dress has changed over the years. Millennials prefer to dress more casually and comfortably than previous generations. Gen Z's prefer comfortable and casual clothing over formal attire, with loose-fitting jeans being the pants of preference for both males and females. It should be noted that the Gen Z generation accomplishes things by being more self-reliant yet openly collaborative (i.e., they are smart and work as a team).  In two years, Gen Z's will make up more than 25% of the world workforce. With respect to workplace dress codes, according to a recent Gallup poll, the "suits" are disappearing. It indicates that just 3% of all U.S. workers wear business professional attire. The breakdown is 3% suits, 32% business casual, 33% casual street clothes, and 31% uniforms.

 

Oh, memories – I started my business career in 1963 at Marsh & McLennan. In those days, you always wore a dark suit, white shirt, and conservative tie to work. Often with suspenders. Then, following a pattern set by Microsoft, I joined others and occasionally wore a blue shirt. In the Mid-1970s, the Marsh Los Angeles Office came up with casual Friday when we wore Hawaiian shirts. Following that, things moved to business casual over time. In the early 1980s, I headed Continental Risk Services, a Division of Continental Insurance Company in Newport Beach. Most of the twenty-plus staff were recent college graduates with master's degrees in risk management or finance, and there was no dress code. The New York C-suite group seemed to love our ideas, studies, and reports. They also did not mind dressing down when they visited. I'm not sure if the New York bosses liked our ideas and reports we developed or kept the office open because they loved having a facility in Newport Beach, California, that they could frequently visit. Anyway, I don't think a dress code is that important. It's what is accomplished that is important.

 

REALLOCATION

 

Speaking of risk management and finance, I was startled when the financial concept of "budget or asset reallocation" seemed beyond the understanding of the U.S. Presidential staff. My comments below are also influenced by my research in writing novels in the crime fiction genre. Most of this section was written before the Middle East outbreak. I can only hope what was done does not impact how the American hostages in this crisis are treated.

 

I have no desire to comment on politics. But when I see politicians do something that appears to be stupid, I will mention it. For example, in my July post (07.19.2026) titled "Change is in the Air," I suggested Los Angeles Mayor Karen Bass' solution to the homelessness problem created potential adverse consequences for the City and its taxpayers. I have noted recent news about New York City, which used the same solution to the homelessness problem as LA. Here is some of what the New York City Council had to say about the problem in a recent press release – "Homelessness is a national problem that has reached a crisis level in New York City." The NYC problem was created by the politicians of the City who adopted a plan like the one in LA. The NY decision on homelessness reminds me of 1975 when the City went bankrupt and sought Federal Aid to solve a problem their politicians created.

 

An article in the NEW YORKER DAILY indicated that economist Stijn Van Nieuwerburgh coined the term "urban doom loop." It refers to a city that enters a self-reinforcing spiral during which declining retail activity and spiking crime lead to reduced tax revenue and fewer public services. 

 

Back to "Reallocation" – My mind went bonkers (red flags flew across my brain) when the Biden administration announced they had reached a deal with Iran to release five Americans in exchange for a stipulated unfreezing of $6 billion of funds, breaking a long-standing cardinal rule of the American government. Their logic for such an exchange was that the released funds could only be used for humanitarian purposes.

 

Early in my business career, I learned the concept of "reallocation." Here's my first memory of using it. I worked for Marsh & McLennan in the 1970s when an exceptionally hard insurance market created insurance coverage problems for many corporations.

 

RUPP'S INSURANCE & RISK MANAGEMENT GLOSSARY (RIRMG) definition– "Hard Market - An insurance business cycle period when coverage is difficult for insured to obtain and premiums are high. Some coverages may not be available for some insured during a hard market."

 

To help alleviate this problem, we recommended to the corporate risk managers (or, at that time, insurance buyers) the use of captive insurance companies. The captive insurance concept was first used by Fred Reiss in 1953 when he formed Steel Insurance Company of America for Youngstown Sheet & Tube Company to insure the companies' mines considered extremely hazardous by the commercial insurance industry. That was the model for captive insurance companies that are now widely used. Today, nearly all "Fortune 500" companies and thousands of midsized companies have established captives. I met Fred several times in Bermuda, where he set up a management operation for captive insurance companies. He was a fascinating individual who came up with a great concept.

 

RIRMG definition – "Captive Insurance Company - A risk-financing method or form of self-insurance involving the establishment of a subsidiary corporation organized to write insurance. Captives are domiciled either in a county outside the United States or in one of the few U.S. states that authorize them. Captive insurance companies are formed to serve the insurance needs of the parent organization and to escape uncertainties of commercial insurance availability and cost."

 

Over time, many of the captives had built up sizable policyholder surplus and claims reserves. Not fully understanding the concept of insurance, the corporate finance department, at the encouragement of the C-suite execs who wanted to maintain their personal quarterly bonus targets, would "reallocate" money from the captive to other operations to meet target goals. This puts the risk manager in jeopardy should there be a large claim. To solve this problem, we came up with "finite risk insurance."

 

RIRMG definition – "Finite Risk Insurance - An insurance or reinsurance contract that transfers financial risk of loss from an insured to an insurer over a specified period of time, subject to an ultimate limit of liability, and which usually includes a profit-sharing feature. The insurer holds large sums belonging to the insured in some form of savings account, and a part of the investment income is rebated to the insured."

 

In other words, the funds the corporate captive insurance company subsidiary should have normally maintained were temporarily transferred to a commercial insurance company and are no longer available to the C-suite crew. We transferred the funds from a corporate budget item to a contractual agreement to protect the captive insurance company operations.

 

MICROSOFT BING AI definition - "Budget Reallocation – The redesignation of appropriated or budgeted funds from one account to another or a newly created account for a different use or purpose."

 

Based on the above, if you were the Iranians who provide financial support to Hamas and whose Health Ministry has constructed hospitals for humanitarian purposes, you would take the $6 billion for humanitarian hospital support budget and reallocate $6 billion already assigned to the hospital budgets to fund Hamas. Come on, White House staff. If I can think of this, I'm certain the Iranians have.

 

Since writing the above, CBS NEWS reports that because of the Hamas attack, the $6 billion in frozen Iranian funds set to be released in exchange for American hostages being returned home will not be delivered to Iran. But then I read that the Administration is still making questionable comments about the Iranian deal. Here is what the Secretary of State said last Thursday – "None of the funds that have now gone to Qatar have actually been spent or accessed in any way by Iran. Indeed, funds from that account are overseen by the Treasury Department, can only be dispensed for humanitarian goods — food, medicine, medical equipment — and never touch Iranian hands."

 

I'm totally lost as to the statement "and never touch Iranian hands." The deal was struck with the Iranians.  Wake up, guys! At least get your story right.

 

Then, from my crime novel genre research experience, I can tell you that the Administration has also placed over a $1 billion price per person on all Americans taken hostage.  

 

In my novel DEATH ON THE HIGH SEAS, my plot has a large Mexican drug cartel using the reallocation concept to laundry money and move it from country to country.

 

PEOPLE BELIEVE WHAT THEY WANT TO BELIEVE

 

I'm going to start off this piece with two quotes - 

 

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change."

Charles Darwin

 

"A wise man, therefore, proportions his belief to the evidence."

David Hume

 

For the novel I'm working on, SKYWARD, I have been reading numerous articles about artificial intelligence (AI), which led me to generative artificial intelligence (GAI), artificial general intelligence (AFI), and augmented intelligence (AI). In my novel, like many sci-fi movies, AI/Master Computers/Robotics play an essential role in future human societies. And for some reason, this took my crazy mind to the concept of "belief."  

 

What a person believes is expressed in that person's reactions. Selected human beliefs fed into a computer AI algorithm program create how that program will respond. But where did the human programmers' beliefs come from? For they will result in how that AI system is going to respond.

 

The more I thought about the word "belief," the more important I think it is to humans and, maybe more importantly, how they program AI machines. A set of beliefs can create happiness or depression. They can lead one to wealth or debt. They can lead one to being helpful or to violence. They can be the difference between peace and war.

 

Beliefs are critical to human life and influence our thinking, feeling, and acting. They are the foundation of our culture, identity, values, and social views. They affect our well-being, happiness, and resilience.

 

Where do an individual's beliefs come from? Well, they probably are initially impacted by the genes provided by your parents. Then, your life experiences.

 

Our minds will respond to a placebo where the physiological effect (belief) may cause the body to cure itself.

 

Humans can accept religious beliefs because of a logical explanation by a preacher or bible group. Studies have shown that those that do extend their lifespan by approximately four years. Studies have shown if you have a bachelor's degree, you will extend your lifespan by approximately four years.

 

I have recently been asked if being religious and having a bachelor's degree will extend your lifespan by eight years. I couldn't find a study to support that concept.

 

Because of the importance of beliefs, they are the subject of molding from all directions – parents, friends, enemies, influencers, nuts, and institutions.  Businesses use advertising to create a belief in a product or service, and governments use propaganda to mold the beliefs of their citizens or the world. Both spend millions or billions of dollars to establish or change a belief. Unfortunately, drugs such as fentanyl can negatively impact beliefs.  

 

In today's world of confusion, it is critical that you consciously address and understand the basis for your beliefs. As David Hume indicated, "A wise man. . . proportions his belief to the evidence."  A belief can be a source of inspiration, motivation, guidance, and hope, or it can be a source of confusion, doubt, conflict, and despair.

 

And we need to understand through AI, there is the possibility that we are expanding beliefs beyond us humans. An AI format I did not list above is advanced digital intelligence (ADI), which refers to the combination of social, emotional, and cognitive abilities that enable individuals to adapt to the demands of life in the digital age.

 

Until next month.

 

Cheers,

 

Richard V. Rupp, Author

Website – www.richardvrupp.com

Email – rupprisk@gmail.com

Copyright@2023 by Richard V. Rupp