"The Obama administration has altered its approach to recouping bailout funds from the financial industry, after objections that its previous concept—a fixed-rate tax on bank liabilities—could harm the market for U.S. Treasuries and other safe investments. Treasury Secretary Timothy Geithner, in a Tuesday appearance before the Senate Finance Committee, outlined a tax that would apply to assets on a firm's balance sheet, with riskier investments having higher taxes," reports the Wall Street Journal.

This tax on risk is itself a risky endeavor, because it necessarily involves the government judging what's risky, and what's not, a judgment that might be wrong. Remember, a couple of years ago, everyone thought AAA-rated mortgage-backed securities weren't risky -- and that's a part of why so many banks had so much of them on their balance sheets -- but they turned out to be more risky than people thought. Now the Wall Street Journal touts U.S. Treasuries as "safe," but they could lose a lot of their real value in a period of hyperinflation, and some investors are shorting treasuries the same way that others were shorting the housing market a couple of years ago.

President Bush's former speechwriter, Michael Gerson, has an interview with the governor of Minnesota, Tim Pawlenty, and writes it up into a column about Mr. Pawlenty's possibilities as a Republican presidential candidate in 2012:

If the problem is deficits, Pawlenty believes he is the solution. From 1960 to 2002, state spending in Minnesota increased by an average of 21 percent every two years. As governor, Pawlenty has held the growth of spending to just over 2 percent. Last year, he cut state spending in real terms -- the first time that has happened in 150 years. "We cut everything except public safety and K through 12 education," he says. "We changed the entitlement structure." All while moving Minnesota off the list of the top 10 most heavily taxed states.

Yesterday morning I wrote that the White House's promise to keep "our boot on the throat of BP"  was "maybe a little bit unseemly." Even Commenter Ben, a reliable left-winger, acknowledges that the phrase is "crass," reminscent of "fat cat bankers." Now comes columnist Tony Blankley, a former spokesman for Speaker of the House Newt Gingrich, to remind us, astonishingly, of the phrase's provenance:

Because not only is the image of a boot on a neck inherently repulsive, but the special history of a government's boot so situated has a particularly vile history.

The most famous image is, of course, George Orwell's:

Back in December we noticed a speech by General Electric chief executive Jeffrey Immelt in which Mr. Immelt praised the Chinese Communist leadership in the same breath as he did Ronald Reagan: "There is no 'one style of leadership' that you should emulate. But great leaders always match vision with execution. And leadership in general must welcome both purpose and process. Let me give you studies in contrast. One of my heroes was President Reagan. President Reagan was very charismatic. He could give speeches all day long and you would never be bored. At the same time, he was responsible for an aggressive reform agenda that forever changed our country. On the other side is the Chinese government. Talk about boring! But they are executing their eleventh 'five year plan.' They do exactly what they say they will do. They will likely be the biggest economy in the world someday. Man, these guys are good! "

Now comes news, via Bloomberg, that, "Every summer since 2000, General Electric Co. has worked with the world's largest communist party to pick about 25 Chinese executives for the company's leadership program in Crotonville on New York's Hudson River. The training creates potential Chinese allies for GE to help ensure its continued expansion in the world's fastest- growing major economy, company officials say. It is part of an emphasis on government relations that has paid off with contracts to supply jet engines and build wind turbines."

Regular readers know we've been pretty consistently critical of Warren Buffett. But Mr. Buffett's biographer Alice Schroeder, in a Bloomberg News column, goes too far even for us:

What I wanted Buffett to say was what he has said in similar situations about news of corporate culpability: Get it right, get it fast, get it out. March down to Washington, Lloyd [Blankfein], sit down with SEC Chairman Mary Shapiro and say, Madam Chairman, what would you like us to do? Thank you, we'll get right on it, and we apologize to the taxpayers and investors. If she says, Your successor takes over July 1 and must not be a former trader, just say, OK.

That kind of principle-based thinking was missing throughout much of the meeting.

Tax increases are driving London's top money managers to pick up and move to Switzerland, Bloomberg News reports. From the Bloomberg article:

"Some people think it's morally wrong to be working for the government for more than half the year," says Jonathan Ivinson, a Geneva-based tax partner at international law firm Hogan & Hartson LLP, as he works the room, passing by a painting of Horatio Nelson's HMS Victory.

Fed-up financial professionals say they're ready to quit the U.K. because of a lethal combination of high taxes, looming European regulation and public anger toward bankers following taxpayer rescues of some of Britain's biggest lenders. London's highest earners must now pay a 50 percent tax on incomes above 150,000 pounds ($227,200) that came into force on April 6, replacing a 40 percent top rate.

The new levy follows a temporary 50 percent tax on banker bonuses that the Labour government imposed on awards over 25,000 pounds issued from December 2009 to April 2010.

More:

Vanguard, the mutual-fund-shareholder-owned mutual fund company with $1.3 trillion under management, won't disclose to its owner-shareholders how much money is paid to the top executives at the company they supposedly own. Here's a recent post on the topic from Vanguard's own blog:

under this novel structure the various Vanguard mutual funds own the operating company—The Vanguard Group, Inc.—that exists to serve those funds. No other owner pulls a profit from the operating company.

It's clear from your comments that skepticism still abounds, along with a fair amount of curiosity, and even a good portion of gratitude for Vanguard's unique client-owned structure. In this post, I'll respond to some of those questions and comments.

...

About one in four comments focused on the compensation of Vanguard executives.

Also courtesy of the Nation magazine comes word of the position of Senator Bernie Sanders, the self-described socialist senator from Vermont, on financial reform. Writes Senator Sanders: "Today, millions of Americans who pay their bills on time are now forced to pay 25 or 30 percent interest rates. That is not only obscene but, according to every major religion, immoral.  Banks cannot be allowed to engage in usury and charge outrageous interest rates. We must cap interest rates for private banks at the same level as we do for credit unions – 15 percent except under exceptional circumstances."

It's amazing how the same left-liberals who would indignantly reject the idea that religious doctrine should dictate national government policy on issues such as abortion or gay marriage rush to embrace the idea when it allows them to crack down on banks.

The May 10 issue of the Nation, which I think printed before the oil spill in the Gulf of Mexico became such a big deal, maybe even before the spill happened, carries a full-page advertisement on the back cover from, you guessed it BP -- "Beyond Petroleum." The adds is a multiple choice question answering "all of the above" to the choices "more oil," "more natural gas," "more wind," "more solar," "more biofuels" and "energy efficiency."

Maybe the word hadn't yet got out to the left-wing Nation editors that they are supposed to keep their boot on BP's throat. Sometimes companies get what they deserve...anyway, not to pile on BP, which as I said earlier has plenty of innocent, law-abiding employees and shareholders. But somehow BP and the Nation seem like a pair that deserve each other if there ever were one.

The Manhattan Institute's energy expert, Robert Bryce, writes in the Energy Tribune:

What's bad for the offshore oil and gas industry is good for corn ethanol and wind. On Wednesday, President Barack Obama was in an ethanol plant in Missouri singing the praises of ethanol. Here is what he said:

From today's Washington Examiner:

"We will keep our -- as [Interior] Secretary [Ken] Salazar said, our boot on the throat of BP to ensure that they're doing all that is necessary while we do all that is humanly possible to deal with this incident," [President Obama's White House Press Secretary Robert] Gibbs said. "Absolutely."

No matter how outraged one is at the oil spill, which is terrible, isn't the image of the Obama administration putting its "boot on the throat" of an entire company that, after all, has plenty of innocent and law-abiding taxpaying Americans as employees and shareholders and vendors maybe a little bit unseemly? If the White House is concerned about the perception of what Michael Barone calls "gangster government," it isn't letting it show.

Bloomberg News, in the course of an article on money manager Bruce Berkowitz of the Fairholme Fund and his decision to invest heavily in financial-services stocks, quotes a manager at "the $1.1 billion FPA Capital Fund," which "returned 15 percent a year for the 25 years ended March 31, best among U.S. diversified mutual funds, according to Morningstar":

The fund has avoided banks because the prospect of changes in financial regulation has created too much risk.

"When we don't understand what the rules are going to be, we don't want to invest our clients' capital," said Bryan.

Thomas Sowell's latest column is on Asian-American children who get beat up by blacks. "People who call differences 'inequities' and achievements 'privilege' leave social havoc in their wake, while feeling noble about siding with the less fortunate."

The Democratic former speaker of the California state legislature and former mayor of San Francisco:

"The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But we politicians, pushed by our friends in labor, gradually expanded pay and benefits … while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers. Talking about this is politically unpopular and potentially even career suicide … but at some point, someone is going to have to get honest about the fact."

--From an article in the Los Angeles Times by Mickey Kaus, who is challenging Senator Boxer in the California Democratic primary for U.S. Senate.

The Wall Street Journal has a good story on members of Congress who, while publicly criticizing speculators, were themselves making bets against the housing market or even against U.S. Treasury Bills. Maybe the SEC will investigate them for insider trading because they have exclusive knowledge of how much damage they and their colleagues will do to the economy through legislation and are seeking to profit by investing in their own incompetence? We look forward to the Senate hearing on this one. Says the Journal:

Some of these legislators have publicly criticized practices such as short-selling, or betting on a security to decline. In February, Sen. Johnny Isakson (R., Ga.) argued on the Senate floor that "we don't need those speculating in the marketplace to take unfair advantage of the values of equities that are owned by Americans all over this country for the sake of making a buck on a short sale."