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Essential Economics 101 * Ray Dalio on how the economy actually works

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I am constantly amazed at the differences in how different people can view and interpret the same experiences or facts. Clearly, as humans we tend to fit the available facts into our belief systems. Nowhere is is more apparent than Washington politics and an understanding of the economy and how it works. Conservatives have one operating model and set of beliefs and the left has their own. The facts are economists have some fairly good basic principles that are very consistent.

1. You get less of what you tax

2. You can overspend in the short term, but in the long run, even governments run out of runway

3. Bubbles happen, they will keep happening.

4. Risk and reward drives everything.

5. And the list could go on and on

I am certainly not qualified to debate these principles in theory from an economic perspective. However, I CAN say that I have seen these principles work and work consistently over and over again. I’m not saying they are good or bad, they just ARE.

One of the best resources I have found lately is Ray Dalio’s simple but not simplistic animation on how the economy works. This video is well worth your time of 30 minutes to watch and learn. He does a beautiful job of describing the economy as a machine.

In case you don’t know who Ray Dalio is, he’s just one of the most consistent and most successful investors in US history. Google him.

Customer Service in the age of AI – interacting with American Airlines bots and real people

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I fly American Airlines way more than I would care to admit. Over the span of 30 years living in Dallas the reality is that AA is the only real airline we can use. The good news is we live about 15 minutes from one of the largest international airports in the world. We can be anywhere in the USA within a few hours or Europe by the next morning. Asia is merely 13 hours away and if you are up to a 16 hour flight you can be in Qatar, Hong Kong, or Sydney. Needless to say we love living here. Dallas is a great city for business and a wonderful hub for an international lifestyle.

I have tons of patience and respect for the airlines, especially AA. Over the years they’ve done an amazingly good job of shuttling us and our teams around the world with few incidents. And when those happen they are usually resolved quickly and efficiently.

What I have started to notice though is a slow shift over the last ten years from discretion based decisions by capable employees to more process and rules driven. This is understandable. When you are operating thousands of flights a day with hundreds of thousands of passengers in the air, processes are really the only way to manage them.

So it went yesterday. I woke up like a normal day and wanted to check in for our flights tomorrow to San Juan that I had purchased back in May for a southern Caribbean cruise. Or so I thought.

Turns out I had no tickets. I had simply held the original reservation and not purchased them. Ugh.

To make things worse it was my kids tickets. Doh! No problem will just buy some and get hosed on outrageous pricing. Nope. All sold out. Oversold. I’m screwed. Huge winter blast is in the northeast and the normally friendly agents on the executive platinum desk were an hour and a half wait. Crap.

I’ll save you the gory details of this story. What I will say is the first two interactions I had with AA executive platinum customer support were definitely rules driven. No you can’t do this you can’t do that. No help really. What we ended up doing was making the mess bigger and more expensive.

Fast forward to yesterday evening. Apparently problems from the storms had calmed down and I got a very helpful, knowledgeable and capable person who spent the next hour with me sorting things out. Wow what a difference. She actually took a moment to stop and think about me and not the rules and as a result found a decent solution for my self inflicted dilemma.

So all is well we are good to go and my tweet to AA thanking them was promptly responded to – by a bot I am fairly sure. But hey sometimes even a bot says the right thing.

What this highlights to me is the importance of keeping the human factor alive as we make the bold move to process driven, decision making Ai robots. True the efficiencies can be enormous. But people when given tools and good education can outperform Ai robots every time. At least for now.

As AI impacts our interactions with companies more and more I think we will see this issue more and more. As much as I love technology and business efficiencies that go with it we can’t forget that there’s a real human still involved. You.

By the way, thanks Julia!