Bloomberg's Jonathan Weil has a column noting that Richard Parsons and Anne Mulcahy, whose names have been floated as possible successors to Lawrence Summers as chairman of President Obama's National Economic Council, both served as directors of both Citigroup and Fannie Mae. He writes, "It seems Obama is seeking someone who also has served on the board of directors of at least one company that either had a massive accounting scandal, blew up so spectacularly that it threatened to take down the global financial system, or both."

The New York Sun has an editorial on hedge fund manager John Paulson's prediction that Gold is going to hit $4,000 an ounce, or that, as the Sun likes to frame the issue, the value of the dollar is going to decline to 1/4000th of an ounce of gold. It's a wonderful editorial, but it leaves out the possibility that Mr. Paulson is talking his book, that is, that he's running around saying these sorts of things in part because he hopes that people will listen to him and buy more gold, therefore driving up the price of assets that he already owns. You can call it reflexivity or a self-fulfilling prophecy or whatever you want, but it takes the issue somewhat down from the level of "the drama of political economy" that the Sun editorial refers to.

It really is a shame that David Malpass fell short in the primary to run for U.S. Senate in New York, because he is such a useful and provocative voice on economic policy. His voice is still there, it's just heard primarily by his Encima Global clients rather than by the wider audience that would hear a senator. If we are lucky he'll end up at the Federal Reserve or the Treasury Department in a new administration.

A couple of choice quotes from an e-mail Mr. Malpass sent today: "If the Fed buys more Treasuries without changing bank regulations, it will be pushing on a string from the standpoint of bank lending and will be flattening a yield curve that is already flooded with liquidity. The Fed is making $100 billion or so per year in profit, mostly on duration risk – that's a tax on the private sector, so adding to it won't be stimulative."

The Green Bay Press Gazette has an account of a vote by the Ashwaubenon, Wisconsin, village board turning down Kmart on its second attempt this year to win a liquor license. According to the report, "in a 4-2 vote, the board decided that the Kmart, at 1109 Lomardi Ave., was too close in proximity to other establishments with a similar Retail Class A Beer license...Currently, 14 establishments have a Retail Class A Beer license in Ashwaubenon."

The hedge fund D.E. Shaw & Co. is laying off 150 people, or about 10% of its workforce, the Wall Street Journal reports. Maybe they are making room for Lawrence Summers to return to his $5.2 million a year, one-day-a-week job there when Mr. Summers "returns to Harvard" in January upon stepping down from his post as chairman of President Obama's National Economic Council.

Labor union leader and Obama administration appointee Andrew Stern's politics are way to the left of mine, and on top of that he got a better deal than I did out of Simon & Schuster for selling fewer books than I have, so I'm probably about the last person you'd expect to come leaping to his defense. But one of the principles around here at FutureOfCapitalism.com is that the principles we espouse should apply to everyone equally, whether they are Wall Street bankers or left-wing labor leaders. So, in the spirit of our earlier post headlined "Plumbing the Leaks on Bank Prosecutions," let me just say that the spate of articles reporting that Mr. Stern is being investigated by the FBI are troubling, and should be troubling to anyone who believes in the due process rights that are enshrined in the Constitution.

A television personality at General Electric-owned MSNBC, Ed Schultz, has reportedly been reprimanded for his on-air remark calling the governor of New Jersey, Chris Christie, a "fat slob."

David Brooks has a column in today's New York Times claiming that the property tax limits imposed by Proposition 13 are responsible for ruining California:

Another assault on California progressivism came from the right. Conservatives refused to acknowledge the public sector's role in creating the state's prosperity. With Proposition 13 and other measures that cut taxes, they cut off revenue and pushed through structural reforms, making it hard for future administrations to raise funds. Many on the right became unwilling to think creatively about using government to promote prosperity.

The result is a state in crisis. ... State growth has lagged behind national growth. Unemployment is at 12.4 percent statewide and at catastrophic levels in the Central Valley. More people are leaving California for Oklahoma and Texas than came here during the Dust Bowl days of the 1930s.

The National Legal and Policy Center reports:

Here's a great example of the law of unintended consequences, from USA Today: "Laws banning texting while driving actually may prompt a slight increase in road crashes, research out today shows." From the article:

Researchers at the Highway Loss Data Institute compared rates of collision insurance claims in four states — California, Louisiana, Minnesota and Washington — before and after they enacted texting bans. Crash rates rose in three of the states after bans were enacted.

The Highway Loss group theorizes that drivers try to evade police by lowering their phones when texting, increasing the risk by taking their eyes even further from the road and for a longer time.

It seems vaguely reminiscent of that classic New York Times article reporting that as bicycle helmets became more widely used, serious head injuries by cyclists increased.

An Associated Press story currently getting big play on Yahoo! News runs under the headline, "Census Finds Record Gap Between Rich and Poor," and begins, "The income gap between the richest and poorest Americans grew last year to its widest amount on record." The article carries no link to specific census data and doesn't even have a reference to the specific survey, referring only to "newly released census figures."

Check out the most recent Census press release that has anything to do with this topic and it states the following, "The change in income inequality between 2008 and 2009 was not statistically significant, as measured by shares of aggregate household income by quintiles and the Gini index."

What part of the phrase "not statistically significant" do the Associated Press, Yahoo! News, and the rest of the advocacy groups and politicians who are going to make hay out of this story for the rest of the day not understand?

Thomas Sowell has a new column up about gold:

Inflation is a quiet but effective way for the government to transfer resources from the people to itself, without raising taxes. A hundred dollar bill would buy less in 1998 than a $20 bill would buy in the 1960s. This means that anyone who kept his money in a safe over those years would have lost 80 percent of its value, because no safe can keep your money safe from politicians who control the printing presses.

That is why some people buy gold when they lose confidence in the government's managing of its money. Usually that is when inflation is either under way or looming on the horizon. When many people start transferring their wealth from dollars into gold, that restricts the ability of politicians to steal from them through inflation....

the Obama administration sees people's freedom to buy and sell gold as something that can limit what the government can do.

Ross Douthat, billed as a right-of-center voice on the New York Times editorial page, writes, "while some tax cuts can raise government revenue, the income-tax cuts of the Bush years emphatically did not."

Let's check the numbers. Federal receipts in 2000, the year before Mr. Bush took office, were $2.025 trillion, according to the Office of Management and Budget. In 2007, after the tax cuts had taken effect, federal receipts were $2.568 trillion. Tax rates were cut and tax revenues increased. Think that's all due to inflation? Use the OMB's "constant FY 2005 dollars" (if we could only get the government to start issuing those instead of the fiat greenbacks...). By that measure, following the tax increase, federal receipts rose to $2.414 trillion in 2007 from $2.310 trillion in 2000. Revenue declined from the 2007 levels in 2008 and 2009 because of the recession and the tax provisions of the "stimulus," but it's nonsense to claim "emphatically" that the Bush tax cuts did not raise government revenue.

USA Today has an interview with/profile of Bill McNabb, CEO of Vanguard, which has $1.3 trillion in assets under management. It sure sounds as if Mr. McNabb doesn't buy Paul Krugman's Keynesian argument that tax cuts shouldn't go to the "rich" because they would just save the money rather than spend it. From the article:

McNabb argues that increasing savings will benefit the economy far more than short-term efforts to boost economic growth. Instead of trying to encourage consumer spending, McNabb says, "We should be talking about savings rates and getting people to live within their means."

"The downside of oversaving is tiny compared to the downside of undersaving," he says. "Is it easy? No. Is it possible or realistic? Yes."

USA Today has a fascinating dispatch about China's "'nail households,' which are said to stick out like unhammered nails in a plank after the homes around them have been demolished." The paper reports that "one of China's most common causes of anger and unrest" is "forcible eviction" of families from their homes "by developers who have the blessing of the Communist Party to replace entire neighborhoods with office buildings, factories and apartment buildings." It's tempting to say it sounds a little like Atlantic Yards.