What to Read on July 4, 2009

• Mortgages Made Simpler -- Richard Thaler - Thaler has a nice colloquial voice for this sort of writing. If you're new to behavioral economics, this is a splendid read.
• Why Insurance Commissioners Should Not Regulate CDS -- Felix Salmon - This is a tough issue where Salmon sheds much-needed light.
• Joe Biden, Iraq Envoy -- Abu Muqawama - Good quick summary of the latest challenges from someone who understands the situation on the ground better than most.
• Sunblock Buster -- Kiera Butler (Mother Jones) - Can we do some scientific studies to see if this is true? Until then, it's worth some extra caution. The last sentence is a good example of what economists call "moral hazard." (Yes, it does have applications outside of finance.)
• Founding Thinkers -- Ryan Sager - "...it takes a special kind of genius to turn a revolution into a republic." Very well said. The bottom line: "So, as you celebrate the Fourth, celebrate partisanship, celebrate gridlock, celebrate the slow pace of change in America. Because these are the things that keep us free..." Read this post to find out why. It reminds me of an economist friend who once said that our political system reduces the variance; if you have a bell curve, it lops off the extremes on both ends. Yes, it may frustrate us because it prevents really good change and extraordinary leaders, but the same mechanisms prevent really bad change and tyrants. (Of course, there are exceptions to both every once in awhile.)
• Banning Short Selling -- Barry Ritholtz - Short selling is extremely important, for the reasons Ritholtz mentions plus one more that I will discuss in my forthcoming book. Shame on the government!