A Jewish Telegraphic Agency dispatch from Washington provides a fascinating look at how government programs turn religious and non-profit groups into partners of the government: "President Obama signed an extension of vital Medicaid funding, which was a top priority of the Jewish community....The six-month extension of FMAP had been a priority of the Jewish Federations of North America, as 60 cents on every dollar of public revenue brought in by the federations or their partner agencies comes from Medicaid. Nearly $6 billion per year in government aid goes to Jewish hospitals, nursing homes, Jewish Family Service outposts and other social service agencies through Medicaid....The FMAP money will prevent cuts that could have cost the Jewish community $150 million to $200 million in social services funding."

Morgan Stanley's Caitlin Long has a piece in the Financial Times about F.A. Hayek and interest rates:

Interest rates are the most important prices in the economy, according to Nobel laureate F.A. Hayek, because they reflect the collective time preference of individuals to consume either now or later. Accordingly, interest rates co-ordinate allocation of capital across the economy by signalling to businesses whether they should invest. Distortions in interest rates can cause "clusters of errors" in which large swathes of businesses unwittingly miscalculate at the same time.

Hayek observed that interest rate stimulus interfered with economic calculations, causing managers to invest in projects that would not otherwise have appeared profitable...If Hayek were alive he would caution businesses to be alert for the formation of new bubbles, especially in long-term businesses in which losses may not yet be fully recognised and price signals may still be distorted.

Pimco's Bill Gross gives an interview to the Financial Times ahead of Tuesday's Treasury department conference on housing finance:

Some conservative politicians and policy experts have suggested that the agencies should be privatised and the government's involvement curtailed.

Mr Gross, the founder of the Pimco and manager of its $239bn Total Return Fund, said such a move would, in effect, cause him to withdraw from the market.

"Without a government guarantee, as a private investor, I'd require borrowers to put at least 30 per cent down, and most first-time homebuyers can't afford that," said Mr Gross.

He really wants that government guarantee.

The Wall Street Journal's otherwise robust editorial, "Washington vs. Paul Ryan," defending Rep. Paul Ryan from Paul Krugman includes the following somewhat strange passage: "Mr. Ryan's roadmap is much broader than health care and ambitious enough that it would require a Presidential-level debate to have any chance of passing. We'd need to inspect the details before endorsing them ourselves."

So go ahead and inspect the details. What's holding them back? What are they waiting for? Versions of the plan have been around for months. It's up on the Internet. They've only got a 13-member editorial board and two senior editorial page writers over there. Inspect away! We have.

"Bureaucrats and special interests are so out of control in this country that not even monks are safe," according to a new video from the Institute for Justice, which is suing in federal court to challenge a Louisiana law that allows only state-licensed funeral directors to sell coffins. The Institute's clients are coffin-making monks who are being threatened with fines by the state for selling coffins without a license. More information about the case is here.

The chief White House correspondent of the Associated Press, Jennifer Loven, a past president of the White House Correspondents Association, will leave AP to become a managing director of the Glover Park Group, a lobbying and public relations firm whose clients, according to the firm Web site, have included the American Civil Liberties Union, the American Postal Workers Union, the United Federation of Teachers, and Pfizer. Mike Allen's Politico Playbook has the scoop.

She's the second former president of the White House Correspondents Association in recent months to become a lobbyist for left-leaning groups, Bloomberg's Edwin Chen being the first, though Glover Park has also done work for right-leaning groups, and Pfizer is hard to classify one way or another.

Rep. Dennis Kucinich was on ABC News's "Good Morning America" show this morning offering the following straw man argument: "We have to do something about the joblessness....We shouldn't be capitulating to the Fed or Wall Street with this false notion that a certain amount of unemployment is necessary for the proper functioning of the economy."

Bloomberg News's in-house ideologue, Journo-lister Ryan Donmoyer, has a new article out that runs under the headline "Most High Earners Wouldn't See Big Bill From Tax Rise." The first sentence of the article, like the headline, emphasizes the idea that letting the Bush tax cuts expire wouldn't be that big a deal: "President Barack Obama's plan to let Bush-era tax cuts for the highest-income Americans expire would have limited effect on 76 percent of those taxpayers, a study says." Lower down, the article reports that the 315,000 taxpayers who earn more than $1 million a year "would owe $31 billion more, or almost $100,000 on average."

That was quite a speech that President Obama gave the other day to a Democratic National Committee fundraiser at the Four Seasons hotel in Austin, Texas. Two highlights:

most recently we've got the crisis in the Gulf. Now, thankfully, because of incredibly hard work by people from all across government, we are now finally able to say that the well is contained and we could get a permanent kill of that well over the next couple of weeks.

The president credits the spill's containment to the incredibly hard work "by people from all across government." No credit to the private sector? They just get the blame.

There's an assault on Republicans who want "tax cuts for the wealthiest Americans. ... for you to talk about being a deficit hawk, that you want responsible deficit hawk, that want responsible governance, and then you're willing to argue for $700 billion worth of tax cuts for people who don't need them and weren't even asking for them?"

New Michael Barone column:

The fact that the private-sector economy has not responded as administration economists expected and confidently predicted should be a wake-up call.

It shows the limits of expert knowledge and of the ability of political actors to make optimal economic choices.

The intellectual firepower of this administration may be high. But so was the intellectual firepower of the postwar British Labour governments that nationalized steel and auto companies and the railroads.

That didn't turn out so well, and for decades the British economy lagged behind those of America and its European neighbors. State capitalism has been tried before. It didn't work.

Market capitalism works better because it doesn't depend on one set of actors to make all the choices.

"Congress used to be dominated by farmers, and it is unfortunate that Mr. Tester and Senator Charles Grassley of Iowa are the only ones left in the Senate who still actively work the fields," the New York Times writes in an editorial.

Yeah, if we had more senators who were farmers, federal crop subsidies and protectionist tariffs on imported ethanol would probably be even bigger than they are now.

That is quite a chart of the Federal Reserve's balance sheet up at the New York Times's Economix blog.

The FT's John Plender summarizes in a sentence something that a lot of investors probably find frustrating: "Asset prices, whether of equities, bonds or alternative investments such as commodities, go up and down in lockstep in a Pavlovian response to central bankers tweaking the monetary tap."

The Wall Street Journal editorializes, "The danger is that our politicians keep hoping the Fed will save the day when they should be removing the barriers to growth that Washington keeps piling on," following up a point the paper made more extensively yesterday. (Thanks to reader-participant-community member-watchdog-content co-creator B. for sending.)

Tony Blankley has a new column. It's a little overwrought and Manichean for my taste but gets to the issue of the arrogance of the elites and the ruling class versus the country class that we've been writing about here a bit:

A foul and dangerous brew is heating up that is composed of: (1) The economic collapse that started in 2008; (2) the radical, "fundamentally transforming" left-wing agenda of the government; and, (3) the thwarting of the public will -- with glee -- by the entrenched, non-elected powers (in the courts, media, colleges and government bureaucracies) as they get into the face and under the skin of the cultural and political majority.

Arpit Gupta writing in Economic Polices for the 21st Century: "the Fed's decisions to provide increased amounts of liquidity and perform extraordinary operations during moments of crisis distort the incentives for banks. Instead of operating a stable capital structure and preparing for the eventuality of losses, banks can instead operate in a risky and leveraged manner –while counting on central bank provided liquidity-support in the event of a crisis."