Rational Optimism - Matt Ridley on TED.com

How humans' ability to conceptualize and capitalize on gains from trade leads to economic and societal progress:

http://www.ted.com/talks/lang/eng/matt_ridley_when_ideas_have_sex.html

Ridley references one of my favorite economics lessons from Uncle Milty - The Story of the Pencil - though he fails to cite Milton Friedman on the idea... Found that rather disappointing.

(Thanks to Paul Kedrosky's blog post for pointing out this video presentation.)

Recent Housing Bubble reads

Just finished reading "The Big Short" by Michael Lewis - a nice explanation of CDOs and their contribution to the housing bubble. Lewis takes a head-shaking-you-won't-believe-this-happened viewpoint than Gregory Zuckerman's "The Greatest Trade Ever." (Zuckerman takes more of the holy-crap-you-won't-believe-that-this-Paulson-guy-figured-out-the-trade! approach.) Lewis only mentions John Paulson and his hedge fund once in the entire book that I can recall.

Both are worth the time. Makes me want to draw up an org chart of the key players just to see the direct and dotted lines to the whole thing.

Mad Props to Southwest Airlines

This showed up in my inbox this afternoon.

Greetings from Southwest Airlines:

I’m sorry that we were unable to get you to the terminal promptly and off the airplane quicker after your flight arrived at Denver on April 11. Unfortunately, your gate was occupied by another LUV jet that evening that was taking a little longer than we expected—we appreciate your patience during this situation. Naturally, we’d like to provide you with better travel experiences; therefore, I am sending you a LUV Voucher that can be applied toward a future Southwest reservation. You can be sure that we are looking forward to welcoming you back again real soon.

That. Is. Awesome.

Howard Dean, Fiscal Conservative?

I was fortunate enough to attend the ASF 2010 Working Lunch, pretty good rubber chicken with a side of CNBC's Larry Kudlow moderating between Howard Dean and Newt Gingrich. Much to my surprise, Howard Dean appeared to show signs of fiscal conservatism and the willingness to speak with candor and criticisum about the Obama administration.

Couple of memorable points (paraphrased):

• "You can't have capitalism on the way up and socialism on the way down." - Newt Gingrich when about about US government invention into the financial markets.
• "I'll let Newt save his modesty - he's running." - Howard Dean answering for Gingrich when Gingrich was asked if he was gearing up for a 2012 Presidential run.
• "No way." - Howard Dean when asked by Kudlow if Hillary Clinton was preparing to oppose Obama in the 2012 Democratic primaries.
• "There's a 50/50 chance that the Republicans will pick up a majority in both the House and the Senate in the 2010 mid-term elections." - Newt Gingrich
• "About 45 Senate seats and 30-40 House seats." - Howard Dean's perspective.
• Dean & Kudlow agreed that they would not have re-appointed Ben Bernanke to the Federal Reserve. Gingrich said he would have.

Much to my own surprise, and maybe more to my initial disappointment, I found Dean to be lucid, intelligent, and seemingly likable. Gingrich has a knack for explaining complex issues with ease.

There was lots more said between the two throughout the 1:30 discussion, but the rest focused on the economy, unemployment, and health case. Nothing earth-shattering that you wouldn't expect to hear from either side.

I have a hunch that these two like and respect each other in real life. TV interviews and media outlets typically showcase the animosity between any two individuals of the two parties, but it seems that these two could sit down over a bottle of scotch for a complex, civilized, philosophical conversation about the ways to approach societal, government, and economic challenges. They don't hate each other - just mostly disagree on the basic way to approach issues. Maybe that is what I learned the most.

An Appreciation of Milton Friedman

I got into a Facebook conversation yesterday about capitalism and greed, and immediately thought about this excerpt of the Phil Donahue show, interviewing Milton Friedman back in the 1970s:

http://www.youtube.com/watch?v=RWsx1X8PV_A

And as is the beauty of YouTube, I also found this episode of the Charlie Rose show, taped just a day after Milton Friedman passed away a couple years ago. Great stuff:

http://www.youtube.com/watch?v=-pbHo_fQCFg&feature=fvw

"Inflation is a monetary phenomenon..."