Random Notes

A few quick notes from the Milken Institute Global Conference:

"The president would not understand dynamic evolutionary stochastic processes," From "A Discussion with Nobel Laureates in Economics," Gary Becker, Edmund Phelps, Myron Scholes, and Michael Spence, Moderator: Michael Milken.

As I was riding down the elevator this morning, the car stopped and Muhammad Yunus got on. I said hi. He said hi back.

In a lunchtime quiz, 45% of the people in the audience thought the very first Nobel prize in economics went to Hayek.

When Steve Forbes used the words "flat tax," some people in the audience began applauding. The also applauded every time he used the phrase "tax cut."

The session "Harnessing Growth to Break Poverty's Grip on the Developing World," with Ricardo Hausmann, Myron Scholes, and Maria Eitel, and moderated by Michael Spence, was very good. Part of it was about monkeys in trees. Maria Eitel, president of the Nike foundation, was also very persuasive in arguing for more aid to women. Currently, only about a nickel of every development dollar is devoted to improving the economic prospects for women in developing countries, but there can be huge payoffs from investment in this area (Michael Spence consulted on this work). The political and social problems surrounding investment in women were also interesting. Essentially, even though there are large long-term benefits to helping women, it is in nobody's short-term interest to take women out of their traditional role in the family and community where they provide water, firewood, food for the family, care for sick family members, are expected to provide insurance for the family by dropping out of school if the family needs help, and so on. The key has been to stop trying to attack this as a political or social issue, and instead show families that it is in their economic interest to allow their daughters to attend school, marry later, etc., and then use targeted aid programs that create the correct incentives (e.g. micro loans that provide more help to the family than the daughter can, and are only available if the daughter is in school).

The session "State of the State of Wall Street: Creating Opportunity Out of Chaos," with Bennett Goodman, Senior Managing Partner, GSO Capital Partners LP; Kenneth Griffin, Founder, President and CEO, Citadel Investment Group LLC; Kenneth Moelis, CEO, Moelis & Company; Charles Ward III, President, Lazard Ltd.; Chairman, Lazard Asset Management Group; Peter Weinberg, Partner, Perella Weinberg Partners; Moderator: Paul Calello, CEO, Investment Bank, Credit Suisse was interesting. The panelists clearly understand that some sort of increased regulation of the financial sector will be forthcoming, but they are very worried about the form that regulation will take (and issued the usual threats, e.g. we'll move to other countries). It was clear they plan to be proactive in trying to shape the regulatory changes. They were very supportive of the Fed's bailout of Bear Stearns and changes to the discount window (no surprise there), though one panelist who ran a hedge fund did complain about not having access to the newly designed discount window while other firms did. They were very grateful that sovereign wealth funds were available to provide needed capital, and they were much more optimistic about economic prospects on Main street where they believe there is only a minor contraction and chance of a quick recovery, than about the prospects on Wall street, where they see a depression and a much more drawn out process of recovery.

Update: The elevator keeps messing with me. I was waiting to go down for the dinner thing, the door opens, it's crowded, so I wave it off. But some guy says no, there's room, get on, and people scrunch to make space. I look up and it's Michael Milken. It's the Beverly Hilton, he's paying for the room, my dinner, etc., so I did what I was told and got on the elevator. I did say thanks. Weird.

As for the panels during dinner, I discovered that I don't like Bill Bennett any more in person than I do on TV. Jerry Brown was better, CNN's Bill Schneider was more entertaining than I expected, though from an entertainment perspective John cleese in the earlier panel was better yet. Nobody said anything particularly surprising, except, perhaps, the begrudging (and somewhat backhanded) respect Bennett gave to Clinton for her toughness and perseverance. Still, the consensus was it would be McCain versus Obama, and that the identity each carries into the election will be the determining factor (e.g. McCain as feeble old man or tough war hero, and the extent that Obama will continue to be identified with Wright, elitism, Ayers, etc. - Brown was more optimistic than Bennett that these issues would fade over time).

I have more business cards than I can ever remember having at one time. I didn't bring any (because I've never bothered to get any), so when I'm given one I just take it and say thanks. I always feel kind of awkward at that moment. Then again, I can't put faces with the cards I've been given, so maybe being a big business card dork actually helps with the longer-term memory imprinting.

Because I'm a blogger, they gave me a press pass. That's kind of cool I guess, or so I thought at first, but it doesn't give you any extra privileges except a separate work area I had no use for. It's like a cat bell that tells people you might report on what they say, and that makes some of them reluctant to answer questions. It took me awhile to realize that.