In a broadcast interview with FOX Business Network’s Neil Cavuto, Barry Diller, CEO of the recently fragmented IAC, talks about the stupidity of the writer’s strike, his interest in AOL and the likelihood of a recession. Excerpts are below.

On the writer’s strike:

“I expect that it will probably be a long strike, which would be unfortunate because I don’t think it makes much sense….I think it’s stupid. I don’t think they should have gone out on strike…Both sides must have really mishandled this one…In order to have gotten to ‘strike moment’ everyone must have screwed up, which makes it difficult to get them back to some sort of sanity.”

“What this strike is about is not revenues from first usage. It’s about revenues from what happens in this digital age, of which right now there are none…What they want to do is strike so they’re protected for the future. The problem with that is right now it’s a future that no one can figure out…What they should have done is say, we’re going to take the next five year period – we want to know where all of these revenues are coming from. We want to freeze this area until we can understand the revenues, which aren’t going to develop for another few years…There are no profits for the work that writers do that is then digitized and distributed through the Internet.”

On whether he’s still interested in AOL property:

“Sure…There is very much a limit [on how much he would spend on it]…No, of course it doesn’t [have the valuation it had years ago]. The valuation years ago was about $185bn…I can’t imagine you would think I would [put a number on what he would spend].”

On the likelihood of recession:

“The markets, obviously, are on multiple kinds of hair triggers. They’ve been that way for a while now. They’re wildly volatile…The results of all the excess of the last several years are definitely coming home to be roosted, and they will have a negative effect, certainly, on our consumer economy…The issue is whether the world economy is so great that it can be absorbed with relatively little pain. I doubt it. I think the excesses were large enough that the result will be somewhat painful…I think we’re going to have a slowdown. It’s something with an ‘R’ in it; I just don’t know the size of it.”

On media conglomerates:

“I’m doing what I’m doing because I think given our interactive conglomerate that crosses so many different sectors, these businesses will do better on their own. I think that argument is one that should be applied to multi-business line companies. And, only with the most enforced objectivity do you say this business really needs to be part of a series of other businesses. And, in many, many cases of media conglomerates, the answer would probably be no.”

On John Malone:

“The voting control I have at Expedia and IAC remains the same. He’s a shareholder and I want him to do well…What John Malone is doing is trying to prod me to act irrationally. He did the same thing to Rupert Murdoch for a couple of years. It’s a form of happy torture and I hope I handle it as well as Mr. Murdoch did.”

On the tax code:

“I think that the whole tax code is nonsensical, wildly over-complicated. I always thought that flat taxes made more sense because of what they did for wealthy people and what they did for simplicity.”

On the 2008 Presidential election:

“It makes a difference to me that we have someone else other than the person sitting in there [as President] now. I’m a life Democrat but if John McCain were the nominee on the Republican side, I’d cheer for him. I think he’d great. Otherwise, I’d prefer a Democrat.”