Tuesday, May 18, 2010

Quotes of the day

You cannot call what happened in the Cavs-Celtics series an upset. Boston played better in five of the six games. The C's had four of the five best players. They were better defensively. Their best player (Rajon Rondo) played better than Cleveland's best player (LeBron James). They had playoff-proven guys who kept coming through. They had better crowds. They showed more heart. This was not an upset … but still, it felt like one. And only because we were duped by Cleveland's faux urgency (for most of the season, it felt genuine) and Boston's retro-urgency (for most of the season, it was dormant). The playoffs hinge on toughness, chemistry, defense, leadership and urgency. Cleveland lost all those battles. Every one of them. ... If he owned that cutthroat [Michael] Jordan chromosome, or Magic [Johnson]'s leadership chromosome, it would have surfaced by now. In Wednesday's column before Game 6, I mentioned how there comes a point in every great player's career when you have to pour the cement, let it harden and see what you have. We poured the cement for LeBron in this series. It hardened last night. We know what we have. And last night, LeBron's DNA finally made sense to me. Throw Jordan out. Throw Magic out, too, except for the "controls sections of a game with passing/rebounding" part. Keep Bo [Jackson]. Now, add this guy … Julius Erving. ... When the ABA and NBA merged in the summer of 1976, Doc switched teams (to Philly) and the big question became, "When will Dr. J win an NBA title?" Now here's where the parallels get interesting. Doc spent the next six seasons falling short as everyone picked him apart. ... Doc allowed everyone else to determine his destiny. When he tried to take over … it never felt right. He was always one of those flow-of-the-game stars. Always. The same quality that made him a wonderful teammate also made him a liability if things were falling apart.--Bill Simmons

My suggestion is that people should never reason from a price change, but always start one step earlier—what caused the price to change. If oil prices fall because Saudi Arabia increases production, then that is bullish news. If oil prices fall because of falling AD in Europe, that might be expansionary for the US. But if oil prices are falling because the euro crisis is increasing the demand for dollars and lowering AD worldwide; confirmed by falls in commodity prices, US equity prices, and TIPS spreads, then that is bearish news. The markets are telling us that the euro crisis is hurting recovery in the US, not helping. It’s easy to laugh off the highly erratic markets. But before doing so perhaps we should recall that the markets were also tell us that money was far too tight in September 2008. The Fed ignored those warnings. I have a hunch that right now they’d like to redo the September 16, 2008 meeting.--Scott Sumner

But let’s not fool ourselves into thinking that the chief argument for proportional representation is that it gives each party influence in proportion to its share of the vote. That is simply not how the numbers add up.--Tim Harford

One of President Clinton's main arguments is that a VAT would improve our trade balance, because it is rebated on exports and imposed on imports. The problem is that this argument is well-known, at least among economists who specialize in this topic, to be a fallacy. Here is Alan Viard on the topic.--Greg Mankiw

In early 2009, health insurance companies struck a Faustian bargain with the Obama administration. In exchange for a law requiring Americans to purchase health insurance, they agreed to regulations requiring them to offer coverage to all comers regardless of preexisting illnesses. Now that ObamaCare is law, insurers are learning that they may have sold their souls to the Devil -- along with the lives of the American people. At first glance, ObamaCare might seem a good deal for insurance companies by guaranteeing them a market for their services. But this guaranteed market comes at a steep price, with the government dictating whom insurers must cover, what benefits they must offer, and what prices they may charge. ... Instead of making their Faustian bargain with the government, insurance companies should have advocated for free-market reforms such as allowing customers to purchase policies across state lines, repealing existing mandatory benefits, and allowing patients to use Health Savings Accounts for routine expenses and low-cost "catastrophic-only" insurance to cover rare expensive events. Such free-market reforms could reduce insurance costs up to 50%, while preserving quality of medical care.--Paul Hsieh

My fatalism doesn’t mean that I give policymakers a pass. If we ever stop failing to hold the government accountable then all is lost.--Scott Sumner

A system that does not reward outstanding performance ... inevitably fails to punish bad performance.--Tony Woodlief

The Japs bombed Pearl Harbor and were all like, 'We all that,' and we were all like 'Oh noes you didn't!'--Advanced Placement for History test respondent

Academia has bifurcated into two classes: tenured professors who are decently paid, have lifetime job security, and get to work on whatever strikes their fancy; and adjuncts who are paid at the poverty level and may labor for years in the desperate and often futile hope of landing a tenure track position. And, of course, graduate students, the number of whom may paradoxically increase as the number of tenure track jobs decreases--because someone has to teach all those intro classes. I have long theorized that at least some of the leftward drift in academia can be explained by the fact that it has one of the most abusive labor markets in the world. I theorize this because in interacting with many professors, I am bewildered by their beliefs about labor markets more generally; many seem to think of private labor markets as an endless well of exploitation where employees are virtual prisoners with no recourse in the face of horrific abuses. Yet this does not describe the low wage jobs in which I've worked--there were of course individuals who had to hold onto that particular job for idiosyncratic reasons, but as a class, low wage workers do not face the kind of monolithic employer power that a surprising number of academics seem to believe is common. It is common, of course--in academia. Until they have tenure, faculty are virtual prisoners of their institution. Those on the tenure track work alongside a vast class of have-nots who are some of the worst-paid high school graduates in the country. So it's not surprising to me that this is how academics come to view labor markets--nor that they naturally assume that it must be even worse on the outside.--Megan McArdle

And this is the thing about theology — the knowing of God: there are a great many people who can direct you to the Gospel verse where Christ says this. But it doesn’t occur to many of us, upon learning that we have only months to live, to think about anything but that dread tomorrow. One can know the truth, but to cling to it, when despair intrudes, requires faith.--Tony Woodlief

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