The American Enterprise Institute's Kevin Hassett writes in a Bloomberg News column:

The other way the tax hike will rekindle the recession is through its treatment of dividends. Absent action by the Democratic majority in Congress, which seems increasingly unlikely, the current 15 percent top tax on dividends will rise to the top income tax rate --39.6 percent in 2011, which, again, will grow to 44.6 percent.

This massive increase will reduce the desirability of equities, significantly harming the stock market, while giving firms a powerful incentive to pay dividends this year, while the rate is lower. Businesses may well focus on paying out cash in the second half of this year -- not a terrible thing, but not as helpful to the recovery as spending the money to expand their operations.

More:

A former parks commissioner of New York City, Henry Stern, who now heads the watchdog group New York Civic, says private bus operators should be allowed to take over the many bus routes that the government's Metropolitan Transportation Authority just cut. He writes:

We do not believe the public should be deprived of necessary service just because the MTA cannot operate without losing money.

Why don't the black cabs or other transit vehicles take over and serve the locations that the MTA has abandoned?

There are enough vehicles and enough drivers to serve the majority of the riders who have been shucked by the MTA, which incur much higher operating costs than necessity requires....Mayor Bloomberg's new Deputy Mayor, Stephen Goldsmith (former Mayor of Indianapolis) is noted for his past success in privatizing municipal services. What better area is there to try out privatization than one in which the public agency in charge has abandoned for financial reasons its commitment to provide service?

General Electric chief executive Jeffrey Immelt, last seen here praising Communist China as on par with Ronald Reagan ("Man, these guys are good!) in a speech at West Point and working with the Chinese Communist Party to choose Chinese executives to go through the GE executive training program, appears to be having second thoughts. The Financial Times quotes Mr. Immelt as saying, "I really worry about China...I am not sure that in the end they want any of us to win, or any of us to be successful."

President Obama made some extraordinary remarks the other day in Racine, Wisconsin. The White House Web site has a transcript; here are some excerpts:

The other party's opposition is also rooted in some sincere beliefs about how they think the economy works. They think that our economy will do better if we just let the banks or the oil companies or the insurance industry make their own rules. They still believe that, even after the Wall Street crash, even after the BP oil well blew, that we should just keep a hands-off attitude. They think we should keep doing what we did for most of the last decade leading up to the recession.

So their prescription for every challenge is pretty much the same -- and I don't think I'm exaggerating here -- basically cut taxes for the wealthy, cut rules for corporations, and cut working folks loose to fend for themselves. Basically their attitude is, you're on your own.

"Total compensation for federal workers may easily exceed $14,000 per year more than an otherwise similar private employee," write Andrew Biggs of the American Enterprise Institute and Jason Richwine of the Heritage Foundation in the Wall Street Journal.

It was 101 degrees Fahrenheit here in New York today, so, depending on where you stand, it's either a good moment or a bad one for the Economist to unleash a piece detailing errors and bias by the Intergovernmental Panel on Climate Change.

New York Times columnist David Brooks has been getting by on four hours of sleep a night as he works on a book about success. "It's like the worst period of my life," Mr. Brooks tells New York magazine. ""The thirst for admiration is like the thirst for money—it's never-ending....You never get to the point where you say, I've had enough."

The magazine also reports that Mr. Brooks lives in a 4,600-square-foot, four-bedroom house in Bethesda, Md., and just traded in his Acura for an Infiniti. Link via The Browser.

The governor of Indiana, Mitch Daniels, talks about F.A. Hayek's Road to Serfdom and other books in an interview with the Web site Fivebooks.com. On Road to Serfdom: "Hayek, when I thumb back through it and look at what I marked when I first read it, was the book that, to me, convincingly demonstrated what was already intuitive: namely, the utter futility, the illusion of government planning as a mechanism for uplifting those less fortunate."

Posting will be sparse here through July 5.

Financial Crisis Inquiry Commission chairman Phil Angelides on Goldman Sachs's handling of AIG: "Like a cheetah chasing down a weak member of the herd."

The Financial Crisis Inquiry Commission is having a hearing today, and while the spotlight in advance has been on Goldman Sachs President Gary Cohn, the prepared testimony of Joseph Cassano, the former CEO of AIG Financial Products, is pretty interesting, you might even say, surprising.

Among the highlights of Mr. Cassano's claims: AIG saw the sub-prime problems coming early and got out. "When we recognized — well before many others — that changes in the mortgage market likely presented increased risk for future deals, we decided to exit the subprime business. We thought the decision was appropriate, despite the lost profits at the time. With hindsight, the decision looks even more prudent....we made a decision at the end of 2005 to stop writing new deals that contained subprime collateral. Although we completed deals already in the pipeline, the portfolio grew comparatively little after 2006."

Though the proposal to tax "carried interest" of fund managers as ordinary income rather than at the capital gains rate that now applies is dead, at least for now, at the federal level, New York State is having its own look at the issue, reports the New York Times. The state thinks it can wring "about $50 million a year" in additional tax revenue from "an estimated 1,000 New York fund managers living in Connecticut or New Jersey." It works out to a $50,000 state tax increase per fund manager.

R. Emmett Tyrrell Jr. has a column on Conrad Black.

James Taranto has a smart take on the Washington Post/David Weigel/Journolist scandal. Washington Post columnist columnist Michael Gerson says Mr. Weigel's "private communications should have been kept private."

John Stossel has a column on the glory and resilience of American entrepreneurship:

From Rush Limbaugh's email newsletter: "Apple's iPhone is the Best, So It's Under Attack! I don't care about Apple. I just love the product. You know, I'm sort of an evangel for the iPhone. I use Macs everywhere here in our office, and I am especially sensitive to efforts to destroy the credibility of somebody when they can't destroy their substance. That's been happening to me for 21 years."

Congressional leaders are getting ready to drop the open-ended Financial Crisis Assessment Fund, a kind of make-it-up-as-you-go-along tax or "assessment" on hedge funds with assets of more than $10 billion and financial companies with assets of more than $50 billion, from the Dodd-Frank financial "reform" bill, the Financial Times reports. Instead they will pay for the bill with unused TARP money. The FT says, "Hedge funds, in particular, had engaged in a frantic lobbying effort to escape the charge, according to a senior government official, who described the behaviour as 'shameless.'"

What's more shameless? Imposing an open-ended and vague tax on funds that may have had little or nothing to do with the financial crisis and received no direct bailout? Or lobbying against such a tax?