Congressional Effect Fund manager Eric Singer, writing in Registered Rep:

Even though the historical record for real returns with gridlock is great, I am worried that history will not repeat itself in the near term because there is a difference between benign gridlock, when economic times are "normal," and malignant gridlock, when they are not. ...While Reagan had a split Congress and a fabulous run, Hoover had a split Congress during his last two years, and the market lost 63.4 percent. In times of crises, a Congress that cannot undo its mistakes is not good. Could you imagine using your computer without an undo button?

The Federal Reserve is blocking Goldman Sachs from repaying $5 billion to Warren Buffett's Berkshire Hathaway, the Wall Street Journal reports. It's hard to see exactly who is being protected here. Goldman Sachs and Berkshire/Buffett are both large and sophisticated enough to decide what to do without a lot of wisdom from Washington. If the idea is to protect the taxpayers from having to bail out Goldman Sachs again, that's also strange, since we've been told over and over again by President Obama that the Dodd-Frank financial "reform" means there won't be any more bailouts. Is it Goldman Sachs shareholders being protected? Again, strange, since the management those shareholders employ seems to want to save money (a 10% annual dividend) by paying back the $5 billion now.

Anyway, it's illuminating. Anyone who thought the federal entanglement in the banking business ended when many of the banks, including Goldman, repaid their TARP money was mistaken.

Economic Policies for the 21st Century has an open letter to Ben Bernanke: "We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment....we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus. We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy."

It's quite a high-powered list of signatories.

Columbia University's President Lee Bollinger had compensation of $1,753,984 in 2008 from the university, the New York Times reports today.

Some of that ($325,000 a year, actually) is the occupancy value of his residence, which he uses for official university functions and which has a high value because it, and Columbia, happen to be in New York City, where real estate is expensive compared to other parts of America.

But even so, it's a lot of money for a non-profit executive. I wonder how many of the alumni donors to Columbia, many of whom make a lot less than $1,753,984 a year, realize that their gifts aren't just paying for scholarships for needy, deserving students, but that they are also flowing to Mr. Bollinger to the tune of $1,753,984 a year? And how many of the congressmen voting for more Medicare and Medicaid funding for Columbia's medical-school-affiliated hospital, and for more Pell Grant and federal student loan money for Columbia students, realize that Mr. Bollinger is taking out that much a year?

James Grant gets a piece calling for restoration of the gold standard onto the Sunday New York Times op-ed page. Of course, as the New York Sun reminds us in an editorial, there's a long history of sensible monetary policy writing on the Times editorial page.

It's amazing how swiftly an idea can move from the mainstream to the fringes and then back to the mainstream.

The New York Times's Tamar Lewin took aim at the Washington Post Company this week with a news article with the Web headline "Washington Post's Kaplan Faces Growing Scrutiny." It's kind of a self-fulfilling headline, because, by publishing a 2,600 word front-page news article on the topic, the New York Times itself both engages in the scrutiny and contributes to its growth.

What's avoided much scrutiny so far, however, is the Times's coverage of the issue. A close reading is in order. From the Times: "All these schools get most of their revenue from federal student aid. Kaplan Higher Education, for example, gets 91.5 percent of its revenue from the federal government, through Pell grants, Stafford loans, military and veterans benefits and other aid."

The latest twist in the auto industry bailout ("successful" according to Jon Meacham!) is that the Chinese and Kuwaiti governments are going to buy some of the General Motors shares that the American government is selling. Newsweek's Mickey Kaus has the news, and is suspicious.

The sage of Omaha is having a rough week in the press. First the New York Times unloads on the Washington Post Company's Kaplan University for using Warren Buffett's name to recruit students (more on this story later.) Then Bloomberg quotes Blackstone Group's David Blitzer answering back at Mr. Buffett's criticism of the private equity industry: Mr. Buffett "has an agenda as relates to buying assets and he's running around competing with us, so I'd take a little bit of a grain of salt," Mr. Blitzer says. Then The Street runs a piece critical of Mr. Buffett for breaking his own rules on stock splits and derivatives: "Buffett himself doesn't always stick to the points he, himself, has laid out."

Steven Rattner wins the argument with Holman Jenkins over GM and Ford. Earlier coverage of this one here and here.

Arthur Laffer has a Wall Street Journal op-ed with some intriguing policy suggestions, among them:

A true flat tax, a la Jerry Brown's proposal in 1992. Congress should replace all federal taxes (except sin taxes) with two flat-rate taxes, one on personal income and one on net business sales. The personal income tax would be on all forms of income: wage income, dividends, inheritance (as proposed by Democratic Rep. Jared Polis), and all capital gains. This tax code would remove loopholes and almost all deductions, and the static revenue rate would be around 11.5%.

and

Somewhat shockingly, the New York Times has a positive review of Cool It, the new Bjorn Lomborg global warming movie. Says the Times: "Debunking claims made by 'An Inconvenient Truth' and presenting alternative strategies, 'Cool It' finally blossoms into an engrossing, brain-tickling picture as many of Al Gore's meticulously graphed assertions are systematically — and persuasively — refuted. (I was intrigued to hear Mr. Lomborg say, for instance, that the polar-bear population is more endangered by hunters than melting ice.)"

It's actually one of two pieces in the Times arts section today that runs counter to reflexive Times leftism; the other is a piece by Edward Rothstein defending religion from identity politics.

New York Times columnist Paul Krugman, writing on the plan put forth by the co-chairmen of the deficit reduction commission:

Matters become clearer once you reach the section on tax reform. The goals of reform, as Mr. Bowles and Mr. Simpson see them, are presented in the form of seven bullet points. "Lower Rates" is the first point; "Reduce the Deficit" is the seventh.

So how, exactly, did a deficit-cutting commission become a commission whose first priority is cutting tax rates, with deficit reduction literally at the bottom of the list?

Actually, though, what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.

"Low expectations are what I had for the bipartisan deficit reduction commission, and I have to say I was pleasantly surprised by the draft report that co-chairs Erskine Bowles and Alan Simpson came up with." — FutureOfCapitalism.com post, November 10, 2010, 10:56 p.m.

"We've been expecting to dislike the report of President Obama's deficit commission, so count us as pleasantly surprised by the draft outline released on Wednesday by its two chairmen." — Wall Street Journal editorial, November 11, 2010, 7:03 p.m. (November 12 print editions).

One of best free-market-oriented journalists out there right now is Yang Jian, the managing editor of Automotive News China. His latest dispatch is about Volvo:

Geely President Li Shufu, the proud new owner of Volvo Car Corp., couldn't have raised the money to buy the Swedish carmaker from Ford Motor Co. without generous financial backing from two municipal governments.

Now he's discovering the high price of that generosity.

After Li completed the $1.7 billion (11.3 billion yuan) Volvo deal in August, we learned that two local Chinese governments helped bankroll the deal. The government of Daqing, an oil city in northeast China, supplied 3 billion yuan while the government of Jiading, a district of Shanghai, pledged 1 billion yuan.

But nothing is free in this world. By putting up the money, both governments expect Geely to build a Volvo plant on their land. ...

One of the most striking lines of President Bush's new memoir, Decision Points, is the line in which he tells aides, "If we're really looking at another Great Depression, you can be damn sure I'm going to be Roosevelt, not Hoover."

Mr. Bush may want to check out the new book by his successor as governor of Texas, Rick Perry, Fed Up!, as a corrective. Mr. Perry writes that the claim that Roosevelt's New Deal ended the Depression is a "fraud" that "simply does not stand up to history." He writes, "Consider that when FDR took office in 1933, unemployment was at 25 percent. It still topped 20 percent six years later, in 1939." He goes on to quote FDR's Treasury secretary, Henry Morgenthau Jr., telling Congress in 1939: