The Wall Street Journal has a long account of David Einhorn's announcement that he is shorting St. Joe Co, a real estate company:

Mr. Einhorn's bet that shares of St. Joe have been overvalued sets up a stock pickers steel-cage match against Bruce Berkowitz, the value investor whose Fairholme Capital Management LLC held nearly 27 million shares as of June 30. Mr. Berkowitz declined to comment.

It is reminiscent of Pershing Square Capital Management LP founder Bill Ackman's wager against MBIA Inc., in which Marty Whitman of Third Avenue Management LLC wrongly took the other side of the trade.

Daniel Henninger has an intriguing article in the Wall Street Journal under the headline "Capitalism Saved the Miners." He writes, "profit = innovation," crediting the profit motive with inspiring the invention of the drill bit used to rescue the miners.

In fairness the Chilean government did a lot to orchestrate the rescue, and the same capitalist system that rescued the miners is the one that sent them down (or gave them the choice to go down) into the dangerous mine to begin with. And while profit is a powerful motive for innovation, it certainly isn't the only one; people who work on innovations related to health or science may be motivated by things such as fame, peer approval, competitiveness, intellectual challenge, or a desire to help other people. All those caveats, aside, Mr. Henninger's piece is worth a look.

The New York Times reports on the party for Steven Rattner's book, Overhaul, about the auto industry bailout:

This week, New York Mayor Michael R. Bloomberg and Arthur Sulzberger Jr., the publisher of The New York Times, co-hosted a party for Mr. Rattner on the publication of his book, "Overhaul," about his role in the auto industry overhaul. Mr. Bloomberg toasted Mr. Rattner, offering up casting suggestions for a movie version of the book....Mr. Bloomberg said Mr. Rattner and his auto team 'saved the country.'

Mr. Rattner's role as a Democratic power broker was on display at the event at the Four Seasons restaurant. Robert E. Rubin, the former Treasury secretary, attended, as did Vernon Jordan, the senior adviser to former President Bill Clinton."

The New York Times notices that Senator Reid is trailing in his re-election campaign in Nevada, but doesn't really focus on what that means for New York — Charles Schumer as the likely next Senate majority leader (if the Democrats hold control of the Senate). Richard Durbin is also a possibility, but the Washington Post and Salon both say Mr. Schumer has the edge. With the best Schumer-Obama bridge, Rahm Emanuel, gone, that is going to be one complicated relationship between the White House and Mr. Schumer if Mr. Schumer gets it.

President Obama tells the New York Times in an interview for this coming Sunday's New York Times magazine that his lesson learned from the first two years is that "you can't be neglecting of marketing and P.R." In other words, he had the policy right, he just didn't sell it well enough. As the Times article itself says, "The first refuge of any politician in trouble is that it's a communication problem, not a policy problem."

The link to the full Times article is here.

The Wall Street Journal has an article reporting that the hedge fund D.E. Shaw "invested about $2 billion in real estate near or at the height of the market" and "could see its roughly $100 million investment wiped out" in one particular case. The Journal doesn't mention it, but wasn't "the height of the market" the same period in which Lawrence Summers, now chief of President Obama's National Economic Council, was earning $5.2 million a year for his one day a week job at D.E. Shaw? It puts new light on the Obama administration's rhetoric about incentives and risk in financial industry compensation.

From a New York Times article on the resignation of the schools chancellor in Washington, D.C., Michelle Rhee: "Replacing Ms. Rhee, who is Korean-American, with Ms. Henderson, who is black, is expected to ease racial tensions."

National Public Radio has a story on what it says is a surprisingly close re-election race for the governor of Texas, Rick Perry, a Republican, who is being challenged by the mayor of Houston, Bill White, a Democrat:

"Our current governor doesn't seem to have a clue," White, Perry's Democratic rival, told TV station KXAN. "We need somebody who has had business experience, who can bring good business skills to state government and squeeze the value out of a dollar.

Sure enough, Mr. White's campaign Web site makes the same claim: "Mayor White's business experience can help Washington turn our economy around....Before serving as mayor, White built one of the region's most successful businesses." Mr. Perry has been an elected official since 1985.

One of the arguments President Obama and Paul Krugman make against extending the Bush tax cuts for higher-income individuals is that they would save the money rather than spend it. Here is President Obama: "what I've got is the Republicans holding middle-class tax relief hostage because they're insisting we've got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost over the course of 10 years, $700 billion, and that economists say is probably the worst way to stimulate the economy." Here is Paul Krugman: "Isn't keeping taxes for the affluent low also a form of stimulus? Not so you'd notice. When we save a schoolteacher's job, that unambiguously aids employment; when we give millionaires more money instead, there's a good chance that most of that money will just sit idle."

The Wall Street Journal op-ed page has a feature headlined "Four Governors on How to Cut Spending" that includes a contribution from, of all people, the Democrat who is governor of Massachusetts, Deval Patrick. Governor Patrick was elected in 2006, when the Massachusetts State budget proposed by Governor Romney was $24.1 billion. For 2011, the governor is proposing to spend $29.4 billion. The guy increased spending by 22% over 5 years, and now he's writing opinion pieces in the Wall Street Journal on "How to Cut Spending"? Give me a break.

In the Journal article, Governor Patrick acknowledges, "We increased our sales tax to 6.25% from 5%." If he really cut spending, why would he need to raise taxes? The article doesn't mention Mr. Patrick's most important source of planned new revenue for the state, a vast expansion of casino gambling that he has championed.

In his Wall Street Journal column, William McGurn writes that if Republicans take over the House of Representatives in next month's election, they should have hearings on health care. He writes, "hearings would help Republicans show that there are ways to handle tough challenges such as pre-existing conditions that cost less and do not require imposing more mandates on the insurance industry."

Maybe at this hearing the Republicans could call Speaker Boehner himself to testify about that passage in the Republican "Pledge to America" that says, "We will make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition."

The Fall issue of National Affairs carries a proposal from the director of the Benjamin Rush Society, Jeffrey Anderson, for a constitutional amendment to limit federal government spending:

Section 1: The annual rate of growth in total federal spending shall not exceed the rate of inflation, plus two percentage points, and neither budgeted nor actual spending shall exceed this limit, apart from the exceptions listed below. If no budget is passed, then the most recently passed budget, excluding any exceptions granted in Section 2, shall apply.

Section 2: Defense spending shall not be limited during a time of formally declared war, and further exceptions to the spending limits specified in Section 1 may be granted by the legislatures in three-quarters of the several states, upon the application of two-thirds of both houses of Congress, as they deem necessary; but any such exceptions shall not be included in determining spending limits for subsequent years.

Bloomberg News is out with a new Selzer & Co. poll of 721 "likely voters." Several findings of the poll are pretty striking, but so are some of the ways in which the questions are framed. One question was introduced as follows: "The U.S. avoided what many experts said could have been a major economic collapse in 2008 and there are signs of recovery, though unemployment remains high and many people are still struggling. For each of the following people and institutions, I'd like you to tell me if you think they did more to help or more to hurt the U.S. economy. Just answer 'helped' or 'hurt.' If you don't know enough to answer, just say so."

As James Taranto likes to say, what would we do without "experts"? This is spin, in which policymakers who are significantly culpable for causing a financial crisis are instead, in Orwellian fashion, credited for avoiding "a major economic collapse." Even with the spin, the voting public isn't buying; 34% say Benjamin Bernanke "hurt," more than the 33% who say he "helped," and 40% say Timothy Geithner "hurt," more than the 23% who say he "helped."

Michael Barone has a column on the presidential prospects of the governor of Indiana, Mitch Daniels.

From Paul Krugman's New York Times column: "The whole story is a myth. There never was a big expansion of government spending....the big government expansion everyone talks about never happened....there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers."

Does President Obama's own White House Office of Management and Budget count as part of the right-wing disinformation campaign? Look at the OMB's historical tables. From an earlier FutureOfCapitalism.com post: