Friday, May 27, 2011

Quotes of the day

Professional athletes have taken the "Dancing" title six times in the past 12 seasons. Since the show premiered stateside in 2005, three Olympians, two football stars and one race-car driver have been named "Dancing" champs. Three other NFL stars and an Olympic skater finished the popular show in second place.--Mark Divver

Do you not know that in a race all the runners run, but only one gets the prize? Run in such a way as to get the prize. Everyone who competes in the games goes into strict training. They do it to get a crown that will not last, but we do it to get a crown that will last forever. Therefore I do not run like someone running aimlessly; I do not fight like a boxer beating the air. No, I strike a blow to my body and make it my slave so that after I have preached to others, I myself will not be disqualified for the prize.--Paul

Analogies are like spices: a judicious application can enhance and bring out the flavor of a dish; too much can overwhelm it and even change its character entirely.  ...Football teams and quarterbacks can put up better statistics than anyone else in the league, but if they don't win games, it just doesn't matter. Football is simple: over the course of a season each team in the league competes against all the others, and the playoffs and championship determine—by definition—the "best" football team of the season. There is no equivalent in the world of business. The metrics of success in business are far more multiform, variable, and relative: revenue growth, income growth, operating margins, free cash flow, market share, etc. You cannot point to a company's results at the end of a fiscal year and definitively declare that it "won" or "lost." Even if it outperformed its entire history in terms of growth, margins, and profitability, that does not mean it outperformed its competitors.--Epicurean Dealmaker

The problem (of deflationary food prices) began with the invention of the spear.--Don Boudreaux

Married couples have dropped below half of all American households for the first time, the Census Bureau says, a milestone in the evolution of the American family toward less traditional forms. Married couples represented just 48 percent of American households in 2010, according to data being made public Thursday and analyzed by the Brookings Institution. This was slightly less than in 2000, but far below the 78 percent of households occupied by married couples in 1950. What is more, just a fifth of households were traditional families — married couples with children — down from about a quarter a decade ago, and from 43 percent in 1950, as the iconic image of the American family continues to break apart.--SABRINA TAVERNISE

We find that both women and men equally value physical attributes, such as age and weight, and that there is positive sorting along age, height, and education. The role of individual preferences, however, is outplayed by that of opportunities. Along some attributes (such as occupation, height and smoking) opportunities explain almost all the estimated variation in demand. Along other attributes (such as age), the role of preferences is more substantial, but never dominant.--IZA Discussion Papers, number 2377

So yes, we're pickier about marriage partners but we're drawing them from the same pool that we rather indiscriminately assembled in the first place.--Eric Barker

The USPS has 571,566 full-time workers, making it the country's second-largest civilian employer after Wal-Mart Stores (WMT). It has 31,871 post offices, more than the combined domestic retail outlets of Wal-Mart, Starbucks (SBUX), and McDonald's (MCD). Last year its revenues were $67 billion, and its expenses were even greater. Postal service executives proudly note that if it were a private company, it would be No. 29 on the Fortune 500. The problems of the USPS are just as big. It relies on first-class mail to fund most of its operations, but first-class mail volume is steadily declining—in 2005 it fell below junk mail for the first time. This was a significant milestone. The USPS needs three pieces of junk mail to replace the profit of a vanished stamp-bearing letter. ... Since 2007 the USPS has been unable to cover its annual budget, 80 percent of which goes to salaries and benefits. In contrast, 43 percent of FedEx's (FDX) budget and 61 percent of United Parcel Service's (UPS) pay go to employee-related expenses. Perhaps it's not surprising that the postal service's two primary rivals are more nimble. According to SJ Consulting Group, the USPS has more than a 15 percent share of the American express and ground-shipping market. FedEx has 32 percent, UPS 53 percent. The USPS has stayed afloat by borrowing $12 billion from the U.S. Treasury. This year it will reach its statutory debt limit. After that, insolvency looms. --Devin Leonard

The core structure of medicine—how health care is organized and practiced—emerged in an era when doctors could hold all the key information patients needed in their heads and manage everything required themselves. One needed only an ethic of hard work, a prescription pad, a secretary, and a hospital willing to serve as one’s workshop, loaning a bed and nurses for a patient’s convalescence, maybe an operating room with a few basic tools. We were craftsmen. We could set the fracture, spin the blood, plate the cultures, administer the antiserum. The nature of the knowledge lent itself to prizing autonomy, independence, and self-sufficiency among our highest values, and to designing medicine accordingly. But you can’t hold all the information in your head any longer, and you can’t master all the skills. No one person can work up a patient’s back pain, run the immunoassay, do the physical therapy, protocol the MRI, and direct the treatment of the unexpected cancer found growing in the spine. I don’t even know what it means to “protocol” the MRI.  Before Elias Zerhouni became director of the National Institutes of Health, he was a senior hospital leader at Johns Hopkins, and he calculated how many clinical staff were involved in the care of their typical hospital patient—how many doctors, nurses, and so on. In 1970, he found, it was 2.5 full-time equivalents. By the end of the nineteen-nineties, it was more than fifteen. The number must be even larger today. Everyone has just a piece of patient care. We’re all specialists now—even primary-care doctors. A structure that prioritizes the independence of all those specialists will have enormous difficulty achieving great care.  We don’t have to look far for evidence. Two million patients pick up infections in American hospitals, most because someone didn’t follow basic antiseptic precautions. Forty per cent of coronary-disease patients and sixty per cent of asthma patients receive incomplete or inappropriate care. And half of major surgical complications are avoidable with existing knowledge. It’s like no one’s in charge—because no one is. The public’s experience is that we have amazing clinicians and technologies but little consistent sense that they come together to provide an actual system of care, from start to finish, for people. We train, hire, and pay doctors to be cowboys. But it’s pit crews people need.--Atul Gawande

If a pension fund has a shortfall of $X, and amortizes its shortfall over a 30-year period, that does not make annual amortization payment $X/30. Because of the need to pay interest, the actual figure is closer to $X/11. This means that funding shortfalls (which arise because pension funds make risky investments) impose meaningful short-term fiscal costs. Given the performance of the stock market over the past five years, it is likely that a typical pension fund that was fully funded in mid-2006 is now only 75 percent funded; as a result, doublings of annually required pension contributions should be considered typical, not unusual. Some funds, such as New York's, which use shorter amortization schedules are seeing even more rapid rises in current-year costs. So while pension costs have historically consumed about 4 percent of state and local budgets, that figure is likely to be far higher in the next several years, making pensions a major driver of state and local fiscal crises.--Josh Barro

An increase in the debt limit that contains no reforms for Fannie and Freddie is effectively a blank check for continuing the policy of massively subsidizing housing finance, one that has already cost taxpayers more than $153 billion. The longer Fannie and Freddie stay in business as subsidized federal policy instruments, the more unlikely any private-sector alternative will develop. Although most of the taxpayer losses came from bad mortgage loans made from 2005-2007, each new loan purchased by Fannie and Freddie involves the implicit issuance of more Treasury debt.--CHRISTOPHER PAPAGIANIS
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