Bloomberg News has a piece on some of the hedge fund managers with good returns for the first ten months of 2011, including the Nisswa Fixed Income Fund Ltd., run by Pine River Capital Management LP and managed by Steve Kuhn:

Without Fannie and Freddie trading, the market is ripe with opportunity, Kuhn says. But government control of the companies means that traders like him have to watch for government programs that make it easier for homeowners to refinance. He watches hours of C-SPAN, the cable channel that broadcasts government hearings. Sometimes he records them to watch in the evening.

It really says something about the role government has assumed in our economy when the successful hedge fund managers have stopped watching CNBC and started, instead, watching C-SPAN.

Bloomberg News has a copy of a document Goldman Sachs sent to its clients about investing in Facebook. The wire reports:

The offering document, obtained by Bloomberg News, shows that $75 million of the $450 million investment in Facebook by Goldman Sachs is coming from Goldman Sachs Investment Partners, a hedge fund that handles client money. The firm's own $375 million investment will probably be cut to $300 million because Goldman Sachs expects to sell $75 million to third parties or to the fund it created so clients could buy a stake in Facebook.

"There may be conflicts of interest relating to the underlying investments of the fund and Goldman Sachs," according to the Facebook offering document's disclosures section.

Also, Goldman may sell or hedge its $300 million Facebook investment at any time without telling the clients who invest.

President Obama, in a brief telephone interview with the New York Times about the departure of his press secretary, Robert Gibbs, said, "He's had a six-year stretch now where basically he's been going 24/7 with relatively modest pay."

The Times doesn't mention it, but Mr. Gibbs's pay is $172,000 a year. Given that his wife is a lawyer, I wouldn't be surprised if the two of them together fall into the ranks of what Mr. Obama more often calls "the wealthiest two percent of Americans," the ones who deserve to have their taxes raised.

It's a classic example of Mr. Obama changing his definitions of "rich" depending on what his agenda is. If he wants to justify an aide leaving to make more money in the private sector, he calls the aide's government salary "relatively modest." If he wants to raise taxes, he calls the families earning the same "relatively modest" sums that the aide makes "the wealthiest two percent of Americans."

In the Winter issue of National Affairs, the president of the John Locke Foundation, John Hood, warns of a coming fiscal crisis at the state level: "several states may confront the possibility of genuine default — a possibility that California briefly toyed with in 2009, and may well face again soon."

"As a share of the national economy, such state and local spending has roughly doubled over the past 50 years — from 11.56% of GDP in 1959 to 21.79% today," he writes. The big drivers are Medicaid and education spending.

More: "As of fiscal year 2008, states and localities combined had about $2.6 trillion in outstanding bonded obligations and other formal debts. By the beginning of 2010, the Manhattan Institute's Steven Malanga reports, state and local debt had risen to an all-time high of 22% of GDP, up from 15% a decade ago."

A professor of economics at George Mason University, Walter Williams, has a new column out about manufacturing:

It's productivity gains, rather than outsourcing and imports, that explains most of our manufacturing job loss.

U.S. manufacturing is going through the same kind of labor-saving technological innovation as agriculture. In 1790, farmers were 90 percent of the U.S. labor force. By 1900, only about 41 percent of our labor force was employed in agriculture. By 2008, less than 3 percent of Americans were employed in agriculture. What would you have had Congress do in the face of this precipitous loss of agricultural jobs? Should Congress have outlawed all of the technological advances and machinery that cost millions of agricultural jobs and made our farmers the world's most productive? Also, had Congress done something to save those agricultural jobs, where would we have gotten the workers to produce the millions of things we enjoy that weren't even around in 1790? We would have been poorer.

Thomas Sowell has a new column on attempts to "save the housing market":

No doubt some people who are facing foreclosures might have been able to continue making their mortgage payments if they had not lost their jobs. But since when were we all guaranteed never to lose our jobs? People used to put money aside "for a rainy day." But now people who have spent like there are no rainy days are supposed to have the taxpayers pay to give them an umbrella.

What about the people who saved and put their money in a bank? Those who blithely say that the banks ought to modify the mortgage terms to accommodate people who are behind in making their monthly payments forget that, however "rich" a bank may be, most of its money actually belongs to vast numbers of depositors, most of whom are not rich.

Those depositors deserve to get the best return on their money that supply and demand can offer. Why should people who save be sacrificed for the benefit of those who spent more than they could afford?

Vanity Fair has an article based on what it claims were 11 hours of interviews with Warren Buffett. I've been plenty critical of Mr. Buffett here, and Mr. Buffett uses the article to continue his bashing of the private equity industry that competes with him for deals, but even I appreciate this passage:

What a breathtaking editorial in today's New York Times expressing scorn for the Constitution!

The Times heaps scorn on the Republican plan for a public reading of the Constitution and for a requirement that each bill cite a Constitutional justification, calling it, "a ghastly waste of time" and "a presumptuous and self-righteous act, suggesting that they alone understand the true meaning of a text that the founders wisely left open to generations of reinterpretation. Certainly the Republican leadership is not trying to suggest that African-Americans still be counted as three-fifths of a person."

Certainly the Constitution that the Republicans plan to read will include the 14th Amendment, section two of which repealed the three-fifths clause. The Times doesn't mention that, preferring to smear the entire Constitution as some kind of racist tract.

The Times goes on:

Even left-of-center Jon Stewart thinks San Francisco's ban on Happy Meal toys is ridiculous.

Maurice "Hank" Greenberg has an op-ed piece in the Wall Street Journal complaining that the federal government's takeover of AIG was "done without shareholder approval, a clear violation of Delaware law, the state in which AIG was incorporated."

It sent me back to read "Confidence Game" and "AIG's Correction," two editorials of the New York Sun published in September of 2008. The second concluded, "Our point here isn't to tell AIG's shareholders how to vote, but to underscore the principle that if we want to preserve a distinction between what is happening now and Communist Russia, it has to be that before the government takes control of a company the company's owners — the shareholders — deserve a say on whether they want to sell it."

From a front-page New York Times article today on why Facebook prefers to delay an initial public offering:

Facebook hopes for an even bigger advantage from the deal, the ability to delay an initial public offering. That would allow it to remain free of government regulation...

alternatives have become more attractive for companies, in part because of the increased regulations imposed on public companies...Ben Horowitz, a partner with Andreessen Horowitz, a venture capital firm, said the cost of being a public company had risen to about $5 million a year, from about $1 million a year. Mr. Horowitz, an early employee of Netscape, said that such costs would have eaten into the meager profits of the pioneering Internet company when it went public in 1995. Additionally, accounting and legal requirements have become distractions for many start-ups, said Mr. Horowitz, whose firm is an investor in Facebook.

A professor at George Mason University Law School, Todd Zywicki, has a piece in the Wall Street Journal arguing that the effect of the 2009 Card Accountability Responsibility and Disclosure (CARD) Act and the 2010 Dodd-Frank financial "reform" law has been to push lower-income customers out of the banking system and into the hands of check-cashing joints and payday loan providers. He writes, "Congress can pass all the laws it wants, but it can't repeal the law of supply and demand and the law of unintended consequences."

Mike Allen's Politico Playbook is reporting that William Daley, "JPMorgan Chase's Midwest chairman" is a possible White House chief of staff for President Obama, while Gene Sperling, who made $887,727 in 2008 advising Goldman Sachs on its charitable giving, is the likely successor to Lawrence Summers as director of the National Economic Council.

Mr. Obama, speaking to "60 Minutes," in December 2009: "the people on Wall Street still don't get it. They don't get it. They're still puzzled, why is it that people are mad at the banks."

A few more thoughts on Goldman Sachs's investment in Facebook: Goldman invests $450 million at a $50 billion valuation along with a promise to bring along an additional $1.5 billion or so for Facebook from Goldman clients.

But Goldman gets two things by investing at that valuation that its clients won't get. First, it potentially gets a leg up with Facebook on the fees from a future initial public offering — fees that could potentially amount to $200 million or $250 million. Second, it gets to use the opportunity to invest in Facebook as a lure to attract private wealth management clients to its private wealth management business — if you've just sold your business and have $10 million or $25 million to invest, come put it with us rather than Bessemer or Credit Suisse or some other competitor, because we at Goldman can get you into Facebook, while those other guys can't. That private wealth management business also generates fees for Goldman.

Sunday's New York Times carried a front-page news article, focusing on New Jersey, on the differences between public-sector and private-sector pay. The Times wrote:

A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers. The Manhattan Institute, which is not terribly sympathetic to unions, studied New Jersey and concluded that teachers earned wages roughly comparable to people in the private sector with a similar education.