Some smart money is apparently betting that even with expected Republican gains in next week's election, there won't be enough votes to win extension of the Bush tax cuts for upper income taxpayers over a potential Obama veto. Writes Encima Global's David Malpass, who is both smart and plugged-in: "though not in the press yet, major New York brokerages have begun plans to pay bonuses in December rather than the normal January cycle in order to beat the tax hike. "

One of the reasons tax increases often don't produce the revenue that the static analysis models say they will is because of "income shifting." Particularly at higher levels (just ask Ralph Lauren), taxpayers have some discretion over the timing of when they realize income.

That letter to President Obama from Harvard law professsor Laurence Tribe trashing Sonia Sotomayor and hyping Elena Kagan is really something. One of the most delicious aspects is that, as the National Review contributor who dug the letter up, Ed Whelan, writes, "I'd bet that there's not a chance in a million that Tribe didn't contemporaneously send a copy of his letter to Kagan."

So now Justice Sotomayor knows that Justice Kagan knew that Justice Kagan's Harvard Law colleague was trashing Justice Sotomayor to his friend the president behind Justice Sotomayor's back. Not exactly great for relations between the two newest justices.

A lot of the press on the story has focused on Professor Tribe's trashing Judge Sotomayor, but the real import of the letter is that he was trashing Judge Sotomayor for the purpose of pushing Dean Kagan for the job instead.

The Wall Street Journal waddles in with its own story on Senate Majority Leader Schumer (or possibly Senate Majority Leader Durbin), which includes this gem: "On policy, they are similar, though Mr. Durbin has been more outspoken on civil-liberties issues, particularly the Guantanamo Bay detention facility." So the Wall Street Journal thinks Guantanamo is a civil liberties issue rather than a national security issue? In fact Mr. Schumer has been quite outspoken over the years on civil liberties issues — particularly the Second Amendment right to bear arms, which he's been an outspoken opponent of.

From David Brooks's New York Times column today: "Civic organizations, local business groups and municipal leagues run from Orlando to Kansas City to Seattle. These groups are filled with local leaders who lobby for balanced budgets, infrastructure plans and other worthy causes."

Mr. Brooks seems to think that anything described as an "infrastructure plan" is ipso facto a "worthy cause." That's silly. The "bridge to nowhere" was an infrastructure plan. I'm skeptical of plans as a general matter, but I'm willing to concede that some infrastructure plans may be worthy, so long as Mr. Brooks is willing to concede that not all infrastructure plans are worthy.

The change in the Washington conventional wisdom about what will happen in Tuesday's election is visible in the influential Politico Playbook, a daily morning email from the indefatigable Michael Allen.

Playbook, October 20: "PLAYBOOK ODDS FIXING: If the election were held today, we forecast a Republican pickup of 47 House seats (39 needed for majority; net gain could reach 55)"

Playbook, October 26: "PLAYBOOK ODDS FIXING: Republicans net 51 House seats (39 needed for control)" Mocks as "Tulip Craze" Republican predictions of gains of 62 or 64 seats.

Playbook, October 29: "PLAYBOOK ODDS FIXING: GOP gains 59 in House (39 needed for majority)."

"it's difficult to actually buy an election in America. Money can be an advantage, but it's only one factor among many, as losing political candidates like Steve Forbes, Ross Perot, and Michael Huffington have all found out." — "Money Can't Buy Everything," FutureOfCapitalism.com, October 23, 2010.

"Majority Leader Schumer" — FutureOfCapitalism.com, October 14, 2010.

"As Reid Falters, Schumer Subtly Stands in the Wings" — New York Times front page, October 28 (online), 29 (print), 2010.

The "woman owned" hedge fund backed by male Donald Sussman, whose private plane ferried two Democratic members of Congress, including Barney Frank, for a wintertime trip to the Virgin Islands, is the subject of a formal investigation by the SEC, the New York Times reports.

I'm generally not big on "under investigation" stories, but the whole Sussman situation is such a classic that this one probably merits some kind of exception.

The Vanguard mutual fund official responsible for the pre-election Vanguard blog post crediting the Obama stimulus bill passed by Congressional Democrats with averting a second Great Depression has given $11,600 in campaign contributions over the past seven years — every last cent of it to Democrats.

Vanguard distanced itself from the blog post and apologized earlier this week after a FutureOfCapitalism.com article that criticized it. The Vanguard official who wrote the article lauding the stimulus, Stephen Utkus, gave $1,000 to the Democratic Congressional Campaign Committee this year and $500 this year to the Democratic Senatorial Campaign Committee, according to Federal Election Commission records reviewed by FutureOfCapitalism.com. He donated $4,600 to Barack Obama's presidential campaign in 2008, according to FEC records.

A $5.2 million City of Los Angeles subsidy for China-based electric car company BYD was the topic of a post here last month. Now it turns out that BYD has been having a rough patch, and that it doesn't look, at least now, like it's one of Mr. Buffett's wiser investments. Here is a dispatch from Shanghai by Yang Jian, managing editor of Automotive News China. It appears under the headline, "Buffett Has Failed to Prevent the Dimming of BYD's Star":

In September, American billionaire Warren Buffett drove BYD Co.'s M6 MPV in China and said it was a fine product. During the same visit, he also appeared on TV and said BYD was a great company.

One month later, BYD's stock tumbled 10 percent after the company disclosed that its third-quarter profits had plunged 99 percent.

Holman Jenkins, writing in the Wall Street Journal, points out an interesting irony: First the government puts programs in place to encourage banks to modify mortgages and let people "stay in their homes": "Now the New York Fed has joined other mortgage investors to use the legal snafu to demand that Bank of America buy back $47 billion in supposedly tainted mortgages. Look closely, though, and one of the New York Fed's complaints is that BofA has been costing mortgage investors money by being too lenient with borrowers and too slow to foreclose (ironically, the fruit of an earlier settlement with state AGs)."

"Council Aids West Side Housing" is the headline over a news article in the Wall Street Journal reporting, "A change to city zoning laws aims to preserve affordable housing for a large swath of the West Side, blocking new development in the Garment District, West Chelsea and Hudson Yards....The City Council voted on Wednesday to extend a zoning-law amendment that previously has been applied to Clinton, a midtown West area also known as Hell's Kitchen. It now will also restricts landlords or developers from changing more than 20% of any multi-family building in the additional West Side neighborhoods. Council members say the rules will allow for building renovations but not demolitions.....About 1,500 units in 108 buildings will fall under the new amendment....The vote on Wednesday was an extension of the 1974 Clinton Special District amendment, which was passed to protect that area's low-rise character and affordable housing."

The Wall Street Journal's economics editor, David Wessel, writes in a column headlined 'What Would Milton Friedman Do Now?": "Markets anticipated low and falling inflation—until Mr. Bernanke began talking about QE2 in late August, a sign that markets believe Fed's bond-buying will boost inflation, as the Fed desires."

With gold prices rising to more than $1200 an ounce in July 2010 from below $800 an ounce in October 2008, it seems an overstatement to declare flatly that until late August markets anticipated low and falling inflation.

In President Obama's appearance on the Daily Show, he "defended" economic policy aide Lawrence Summers by saying, "In fairness, Larry Summers did a heck of a job."

Conscious or not, it was an echo of George W. Bush's Hurricane Katrina-era praise for his Federal Emergency Management Agency director, Michael "Heck of a Job" Brown (ie).

Classy.

Politico adds: "Stewart … cut him off: 'You don't want to use that phrase, dude.' Obama gave a wink, … then threw in: 'Pun intended.'

Whatever happened to "The buck stops here"?

So long as we are on the topic of National Public Radio, let's credit the news organization for this graphic on "funding an attack ad," explaining how Donald Sussman put $1 million into something called the Fund for America. From NPR: "Donald Sussman: Chairman of Trust Asset Management LLP, a hedge-fund management firm in the Virgin Islands. Sussman is a generous donor to Democratic causes, including $400,000 to America Coming Together in 2004 and $350,000 to the September Fund in 2006."

As of this morning, the Web site of the U.S. Virgin Islands Economic Development Authority still lists Trust Asset Management LLP as a beneficiary, and a person who answered the phone at Trust Asset this morning said Mr. Sussman is still involved with the firm.