The "Sigtarp" -- special inspector general Neil Barofsky -- says he is looking into "possible insider trading connected to TARP," Bloomberg News reports. "He says his agency would want to know if bankers bought stock in their companies before it was made public that their institutions would get TARP money, for example."

The Bloomberg story goes on:

"There's a reason there are Tea Partiers out there, and when you look at it, anger at the bailout is one of the first things they talk about," says Barofsky, referring to the anti- Obama political movement. "This Treasury Department and the previous Treasury Department bear some of the responsibility for not being straightforward with the American people."

It's interesting how Bloomberg assumes its readers need an explanation of what "Tea Partiers" are, and that it thinks that all the Tea Party is is an "anti-Obama political movement," which is a gross oversimplification because it ignores the Tea Party's opposition to spending and bailouts that happened under President Bush.

Newt Gingrich's former spokesman Tony Blankley has a provocative column rejecting the whole idea that the "social utility" of synthetic derivatives requires a defense. He quotes Ayn Rand: "When the 'common good' (i.e., social utility) of a society is regarded as something apart from and superior to the individual good of its members, it means that the good of some men takes precedence over the good of others, with those others consigned to the status of sacrificial animals. It is tacitly assumed, in such cases, that 'the common good' means the good of the majority as against the minority or individual."

Mr. Blankley, who discloses that he makes some money advising the financial services industry, goes on to argue that some of the anti-bank feeling out there is rooted in religious bigotry, a point we've been making here, too. Mr. Blankley writes:

The Senate hearing on Goldman Sachs concluded at about 8:40 p.m., nearly 11 hours after it started at 10 this morning. I commented earlier on the hostility of some of the senators, including the Republicans. Two other points come to mind.

Sixty-two members of Congress, including the chairman of the House Judiciary Committee, John Conyers; a Republican, Michael Burgess of Texas, and the famous leader of the anti-abortion forces in the ObamaCare debate, Bart Stupak, have signed a letter to Attorney General Holder asking him to open a criminal investigation of Goldman Sachs over the conduct for which it has been charged with civil fraud by the Securities and Exchange Commission. It asks him "to put criminals in jail" and says, "We ask assurance from you that the U.S. Department of Justice is closely looking at this case and similar cases to further investigate and prosecute the criminals involved in this, and other financially fraudulent acts."

They've already decided the Goldman guys are "criminals," and deserve "jail," notwithstanding the clear prohibition in Article I of the Constitution against Bills of Attainder.

The May issue of Harvard Magazine carries a long article on executive compensation by two Harvard Business School professors, Jay Lorsch and Rakesh Khurana. They say that the idea that pay incentives for executives overlooks that "very often executives have little or no control over the results they are supposedly being rewarded for achieving." For example, a company's share price is determined not only by the executive and by the company's performance, which may itself by influenced by employees other than the executive, but by "the general stock market level and broader economic conditions."

They also criticize the "unexamined assumption" that "executives worked primarily for money." They say that "such rewards as future promotions, the intrinsic satisfaction of achieving results, and the pride taken in belonging to a successful company were overlooked and sometimes denigrated."

"A handful of consultants" with shared assumptions "advise the boards of all major American companies," the professors write.

They are skeptical about legislative or regulatory solutions:

It wasn't just Democrats beating up on Goldman Sachs and Wall Street at today's Senate hearing – the Republicans were just about as tough.

A Republican from Maine, Senator Susan Collins, spoke of "the terrible harm such unfettered markets can cause," when combined with "unbridled greed."

She said Goldman was "one of the few U.S. firms to actually profit from the financial crisis," calling that an "ignoble feat."

Senator John McCain, the Republican presidential candidate in 2008, declared – before a single witness at the hearing had even uttered a word – "There's no doubt their behavior was unethical."

The current and former Goldman Sachs employees did their best to respond. The former head of the mortgage department at Goldman Sachs, Daniel Sparks, spoke of the firm's "high ethical standards" and "integrity."

A former Goldman Sachs managing director, Joshua Birnbaum, said he greatly admires the firm's "integrity, commitment to client service, and ethics."

The senators expressed frustration at the way the witnesses responded.

Clifford Asness is a professional money manager, but if that ever fails he could be a writer, at least on the basis of his latest article, "Keep the Casinos Open," which argues that "side bets" of the sort that are at issue in the SEC case against Goldman Sachs actually do have a redeeming social value: "If these 'side bets' encourage more research, more time and energy, into figuring out whether the current price is too high or too low, they themselves can make prices more accurate."

Saudi investor prince Alwaleed Bin Talal shares Warren Buffett's fawning letters to him with a reporter from Bloomberg News:

Alwaleed is particularly fond of his correspondence with Buffett by mail and fax over a span of at least nine years.

Buffett started the exchange, writing Alwaleed after a 12- day stay at New York's Plaza Hotel. In the May 1999 letter, Buffett called the Plaza his "home" when in New York and praised the prince, who then owned a 42 percent stake in the hotel, for the extraordinary service.

"You have restored The Plaza to its former luster -- indeed your managers have enabled it to surpass its previous heights -- and I congratulate you," Buffett wrote in the first of a series of letters that Alwaleed gave to Bloomberg News.

More from Buffett: "In Omaha, I'm known as the 'Alwaleed of America' -- which is quite a compliment," Buffett wrote.

Bloomberg News has a run-down of Goldman Sachs' Washington operation and its advisers. It's quite a list, including:

Arthur Levitt, SEC commissioner in the Clinton administration and a board member of Bloomberg LP

Mark Fabiani, Clinton administration special counsel

Stephen Labaton, who covered the SEC as a reporter for the New York Times and whose wife is President Obama's deputy US Trade Representative.

Greg Craig, who was Obama's White House counsel and defended President Clinton during impeachment

Michael Paese, a former top staffer to House financial services committee chairman Barney Frank

Kenneth Connolly, former staff director of the Senate Environment and Public Works Committee

Michael Thompson, former aide to Senator Mike Enzi, a Wyoming Republican

Joyce Brayboy, former aide to Congressman Mel Watt, a Democrat of North Carolina

Joe Wall, former aide to Vice President Cheney

Eric Edwards, former aide to a House financial services subcommittee

Richard Gephardt, former House Democratic leader

Libertarian law professor Richard Epstein's latest Forbes column is on the SEC charges against Goldman Sachs: "the SEC claim's of Goldman deception looks utterly groundless given ACA's active role....If Goldman committed fraud, then so did Paulson, who was mysteriously not charged. Even more notably, the SEC complaint makes no mention that Goldman actually took the same side of the deal as ACA, which puts it in the unique position of defrauding itself."

The provision that would have exempted Berkshire Hathaway's already existing derivatives contracts from new legislation imposing rules on collateral has been stripped from the Senate financial overhaul, the Omaha World-Herald is reporting.

On the substance, Berkshire's ceo Warren Buffett actually has a decent case against the law. Why should the government interfere with the right of two parties to contract as they wish?

On the politics, this is a good example of the hazards of crony capitalism, even for those, such as Mr. Buffett, who are master practitioners. Those in power can get uncomfortable with being perceived as always favoring certain individuals and companies, whether it is Mr. Buffett or Goldman Sachs. At that point, the politicians or regulators may strike back. Without a rule of law, those who were favored previously can face the same unfairness and arbitrariness that they sought to impose on others or supported imposing on others, either explicitly or tacitly.

With all the downbeat news about America these days, it's refreshing to read a book that is full of reminders of the upward mobility that has made this country known throughout the world as the land of opportunity.

The new book by CNBC anchor Maria Bartiromo (with Catherine Whitney), The 10 Laws of Enduring Success, is a treasury of such stories, drawn largely from the world of corporate CEOs and top government officials Ms. Bartiromo has met and interviewed in her work.

She writes that, "Oprah Winfrey started out as a local radio reporter in Tennessee. Steven Spielberg began his career as an unpaid intern at Universal Studios. Former Hewlett-Packard CEO Carly Fiorina worked for years as a secretary at financial firms. Warren Buffett was an investment salesman in Omaha. Ron Meyer, now the head of Universal, started out as his boss's driver."

Ms. Bartiromo herself, as a teenager, worked weekends as a "coat-check girl" at her father's restaurant and catering hall, the Rex Manor, in Bay Ridge, Brooklyn. The restaurant was named after the ship on which her grandfather arrived in America from Italy.

One of the themes of this site is that religion is an under-appreciated factor in shaping people's attitudes toward capitalism. New evidence for that proposition comes from a new working paper released by the National Bureau of Economic Research by Cornell University's Daniel Benjamin, Yale's James Choi., and Cornell's Geoffrey W. Fisher titled "Religious Identity and Economic Behavior." From the abstract:

We create exogenous variation by randomly varying religious identity salience in laboratory subjects. The marginal effect of religious identity is the change in subjects' choices when religion is salient. We test six hypotheses from prior literature. We find that Protestantism increases contributions to public goods. Catholicism decreases contributions to public goods, decreases expectations of others' contributions to public goods, and decreases risk aversion. Judaism increases worker reciprocity in a bilateral labor market gift-exchange game. We find no evidence of religious identity effects on disutility of work effort, discount rates, or generosity in a dictator game.

"Mr. Obama quotes Warren Buffett as describing 'derivatives that were bought and sold with little oversight as "financial weapons of mass destruction."' But Mr. Buffett's Berkshire Hathaway and its affiliates use and trade in derivatives, as does Goldman Sachs, in which Mr. Buffett's Berkshire Hathaway made a $5 billion investment. Mr. Obama's description of Mr. Buffett's take on derivatives is not the whole story." -- FutureOfCapitalism.com, April 22, 2010

The Washington Post will take a "watch and see" approach rather than rushing into a system to force its Internet readers to pay for content online, the vice chairman of the Washington Post Co., Boisfeuillet Jones, Jr., said over the weekend.

Mr. Jones, speaking to a group of Harvard undergraduates and alumni at an annual lunch of the Harvard Crimson, the student newspaper, spoke of concern that charging for content could cause readers of online newspapers to flee to "substitutes." He said that newspapers that had tried to establish "pay walls" around certain content with a perceived high value – the Los Angeles Times on entertainment news, the Dallas Morning News for its coverage of the football Cowboys – had eventually removed them.

He said the Post would "watch and see what happens before we jump into something like that" kind of partial paywall or like the New York Times's announced plan for "metered" access that would require readers to pay if they want to read more after viewing a certain number of free pages or articles on the site.