National / International News
First up, there's news that Bill Gross — the man who built California-based PIMCO into one of the biggest money managers in the world — is moving to rival Janus, effective immediately. In what must be an overstatement, PIMCO's biggest shareholder called this a "Black Swan Event," something so unlikely it wasn't worth even thinking about. We look into what has been the talk of financial markets this morning. Plus, 100 years ago, the Federal Trade Commission was born when President Woodrow Wilson signed the Federal Trade Commission Act into law. Since then, the agency has played an outsize role in the U.S. economy, and it's fair to say it's affected all of us. And as Marketplace celebrates its 25th birthday this year, we are looking at the surprising, sometimes delightful and sometimes destructive ways that prices have changed during that quarter century. Today, we chill out with a look at the price of AC units, and what their changing costs say about how energy consumption has evolved.
The U.S. government released a second revision to its key measure of economic growth for the spring quarter early Friday. GDP grew at an annual rate of 4.6 percent. Nearly every category, barring consumer spending, was up. Americans, at least last spring, were still leery of splashing out on big purchases, other than health care. Gross national product and later gross domestic product are the accepted indicators of economic health, but a growing body of scholarly research suggests we can do better.
The skepticism around GDP and GNP as measures of well-being goes back decades, and is present in an iconic speech delivered by Senator Robert Kennedy at the University of Kansas in 1968.
“The Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play,” Kennedy said. “It does not include the beauty of our poetry or the strength of our marriages.”
And while GDP is easily measurable — an important characteristic for an economic indicator — growth can be deceptive.
“If we have higher divorce rates in a country, then you have lots more money being spent on legal services,” said Julia Kirby, an editor of the Harvard Business Review. “That looks good in GDP, but at a societal level, you wouldn’t say that’s good."
Kirby says better measures of well-being include whether a country’s population is healthy, educated, happy and getting enough sleep at night.
It's time for Silicon Tally! How well have you kept up with the week in tech news?
It's a great time to be in the hospitality industry... if you want to go into health care.
In case you haven't noticed, health care is becoming more consumer-focused by the day, and in a fight for our business, insurers and health care providers are hunting for executives whose business is customer service — making sure once we walk through the door, we stay.
Deedra Hartung with Cejka Executive Search says hospitals are starting to pay top dollar for "patient experience officers."
"The right background for a Chief Experience Officer can range up to approximately $250,000," she says.
The Chief Experience Officer is responsible for what you'd expect: making sure a patient feels good about their hospital stay. The challenge for health care providers, says Hartung, is to understand "what makes one facility more comfortable for a patient than another."
Hospital executives struggle to answer the question Hartung raises. Clearly, as long as prices remain hidden and it's nearly impossible to assess quality, the industry will have a customer service crisis on its hands. But with patient satisfaction scores now tied to hospital bonuses (and penalties), some health care organizations have started to take steps to improve the patient experience.
It starts with snapping up executives like Fabian Marechal, who runs Penn Medicine's new Musculoskeletal Center. Marechal's pedigree is impeccable; he cut his teeth with Marriott and Ritz-Carlton.
"You know, in my practices, you won't see magazines that are two years old or dead plants," he says, laughing. But Marechal's not joking.
Marechal says he's learned a lot from his time in the hospitality sector — one of the most important lessons is that people must feel cared for. So frontline staff greet customers like a doorman or concierge at the Ritz, and walk them over to the kiosk to help with registration. It's a little thing, Marechal concedes, but with big symbolic value.
"I think all of this helps patients be more engaged in their care. [It shows] people are going to listen to me, people are going to acknowledge me. It changes your mindset from the get-go. You are more open and you feel more safe and secure to listen to your caregiver," he says. Another lesson Marechal picked up along the way: Better customer service can turn that new customer into a repeat customer.
Health insurers have every incentive under the sun to improve their customer service. Thanks to the Affordable Care Act, millions of Americans have begun to shop online through the public exchanges for their insurance coverage, and this may be the wave of the future for many Americans. The firm that makes online insurance shopping easy — okay, as easy as it can be — will have a significant advantage over its competitors.
Aetna's Dijuana Lewis, whom the insurance company hired away from Wal-Mart, says the message is clear.
"It's all about knowing the customer, what the customer wants and how they want it. Health care hasn't really been approached that way," she says. It sounds simple, and it can be.
But Harvard's Ashish Jha has seen plenty of missteps in the industry's rush to "know their customers."
"I've seen a lot of hospitals that have made big investments in things like having a pianist in the lobby of the hospital," he says. But pianos are easy. Jha says the hard work — the work that wins consumer loyalty — is training staff to better connect with their patients, and sticking with it long enough to change the culture.
Maybe, Jha says, an infusion of hospitality executives will bring that kind of dedication and a bit more humanity to health care.
One hundred years ago Friday, President Woodrow Wilson signed the Federal Trade Commission Act into law, creating the agency of the same name. Since then, the FTC has played an outsize role in the U.S. economy, affecting all of us.
The commission's mandate is "to prevent business practices that are anticompetitive or deceptive or unfair to consumers."
"I don't think the mission of the FTC has changed really at all," says David Thomas, who worked for the agency in the early 2000s. What has changed over the last century is the agency's focus — from monopolies during the Progressive Era to deceptive advertising and privacy issues.
"When new issues arise in the American economy, the FTC has the tools to deal with them," says Bill MacLeod, chair of the antitrust practice group at the law firm Kelley Drye. He says the commission pays a lot of attention to technology, data security and virtual currencies, like Bitcoin. "The FTC today is as different as the means and media of communication are today," MacLeod says.
The commission still has to approve mergers — that is a responsibility it shares with the Department of Justice. And right now it's considering some big ones, including Zillow and Trulia, and Sysco's proposed merger with US Foods.
Not every cyberattack is an outside job. The FBI and Department of Homeland Security warned this week of an increase in attacks against businesses by current and former employees — disruptions that can cost companies millions of dollars to address.
So how does it happen?
Say a worker is fired. Escorted out. Email shut down. Her old company could still be vulnerable to digital retaliation, like the destruction of data or the theft of proprietary information.
Cameron Camp, a security researcher with ESET North America, says IT workers in particular tend to have a backdoor login.
“It would be like trying to get into your old apartment,” he says. “You know which key gets in to the back way that nobody else knows about. And you also know the lay of the land.”
The FBI did not provide data on how many companies have had their networks disrupted by disgruntled or former employees. It did say it can cost companies thousands, even millions of dollars to repair damage from stolen data, to add network countermeasures and to purchase credit monitoring services for employees and customers in the aftermath of a data breach.
You don’t have to be an IT professional to create that kind of damage, though. The FBI is warning that the business use of personal email and cloud storage websites, like Dropbox, make theft easier. Think how often we exchange work information through informal channels.
“When you have company resources flowing through systems that are not under company control, when somebody leaves they still have access,” says Dan Kaminsky, chief scientist of the anti-fraud firm White Ops.
Security researcher Cameron Camp says companies should have single sign-in systems. That means employees log in the same way for everything, including email, remote access and even cloud properties. That way all access can be shut down at once.
There’s another thing companies can do, he adds.
“Be nice to your employees.”
Plus, that’s free.
As Marketplace celebrates its 25th birthday this year, we are looking at the surprising, sometimes delightful and sometimes destructive ways that prices have changed during that quarter century.
A 1989 Sears catalog reveals that a medium capacity window air conditioner (in '80s-style faux-wood paneling) could be had for around $300. Factor in inflation, and that's about $575 in today's dollars. An equivalent 8000 BTU window AC unit, again Kenmore, today goes for just $219.
But what about the cost of running an AC unit? In the most recent period when stats are available, people on average spent $237 a year on electricity specifically for AC cooling. This includes the whole country, rich and poor, hot climates and cold. In 1989, adjusted for inflation, people spent $321 on power for the AC. In other words, the average household is paying less now for AC than in 1989.
So here's the concern when it comes to household budgets and climate change: When something like this gets so much cheaper, it changes our behavior. But how?
Click the media player above to hear Marketplace Morning Report host David Brancaccio talk about what inflation can tell us about how we use energy.