Politicians in New York are considering raising taxes on beer and wine, the Daily News reports, "in an effort to combat underage drinking and deaths related to booze, including car accidents and cirrhosis." Before you know it they'll be raising taxes on homemade baked goods, too.

Joel Kotkin's new book gets a nice review from Sam Roberts in the New York Times.

The New York City public schools have adopted a policy that bans most bake sales but allows the sale of pre-packaged items such as Doritos and Pop-Tarts, the New York Times reports. The policy is in the name of the students' health:

To qualify as an approved item, a snack must meet 11 criteria developed by the city. For example, all products must be in marked, single-serving packages with a maximum calorie count of 200. Artificial sweeteners, like Splenda, are banned. Less than 35 percent of the item's total calories may come from either total sugars or fat. Grain-based products must contain at least 2 grams of fiber.

The Wall Street Journal has an editorial criticizing SEC restrictions on short-selling based almost entirely on the argument that the SEC's professional staff think it's a bad idea. The implication is that the same government bureaucrats who missed the Madoff scandal know better than corporate America how to regulate markets. If the Journal thinks the commissioners should always just do what the professional staff says, why bother having the commissioners there at all? The comments thread on the Journal site has some interesting skeptical comments, including from someone who suggests that the Journal and the SEC consider the "fails-to-deliver" issue, or naked shorting.

China apparently keeps pretty tight control even on its privately owned companies. China's Sichuan Tengzhong Heavy Industrial Machinery failed to close on its bid to acquire Hummer from General Motors after the Chinese government failed to approve the deal, the Wall Street Journal reports. "Chinese approval for the deal was never a sure bet given the government's recent efforts to press Chinese auto companies to make smaller, more efficient cars," the Journal reports. In America acquisitions sometimes need government approval for antitrust reasons, and the government imposes fleetwide corporate average fuel economy standards on automakers, but it would be unusual to see the government block an acquisition just because the government thinks the product made by the company to be acquired is undesirable. During the financial crisis, the Treasury secretary, Henry Paulson, who had extensive China experience, did go around telling banks what other banks they should buy.

The government, which owns a majority of GMAC, is at odds with management, the New York Post reports:

The Treasury Department, which now owns 56 percent of the auto-financing outfit, wants GMAC to push ahead with a ResCap sale -- possibly to billionaire Warren Buffett, according to sources.

Meanwhile, the Michael Carpenter-led GMAC management team believes other matters are more important.

Mr. Buffett is already going around describing Timothy Geithner as a hero. Imagine how effusive the public praise from Mr. Buffett will be once Mr. Geithner forces the sale of ResCap to Mr. Buffett. Maybe when Mr. Geithner gets out of office, Mr. Buffett will help Mr. Geithner sell books, the way he did with the previous Treasury secretary, Henry Paulson.

The Henry Paulson book tour made its latest stop in Chicago, where, the Tribune reports, Mr. Paulson's narrative that his actions heroically averted a Great Depression-like catastrophe was challenged by a University of Chicago professor, Raghuram Rajan, who says that mid-crisis Mr. Paulson "should have insisted on cutting cash compensation, shutting off dividends, imposing losses on certain debt contracts and making bailed-out institutions pay for their recapitalization over time." Mr. Rajan complains that Mr. Paulson "treated the banks with kid gloves." Well, certainly Lehman Brothers and Bear Stearns weren't treated with kid gloves. Nor was Wells Fargo, which was forced to accept TARP money it didn't want. Nor is it clear that declaring war on the banks mid-crisis would have been the best way to boost confidence in the American economy, or to enable or encourage them to keep lending.

The Senate voted 70 to 28 yesterday in favor of what the New York Times and the Wall Street Journal news sections are both calling a "jobs bill" but which might perhaps more accurately be called a spending bill. Congress's antiquated Web site makes it hard to link to this data, but the Senate and House reports that go along with the bill both disclose staggering amounts of earmarks, spending directed by individual senators and members of Congress. The University of Alabama will get $30 million for an "Interdisciplinary Science and Engineering Teaching and Research Corridor" requested by a Republican senator, Richard Shelby. The New England Aquarium will get $1.25 million requested by Senator Kennedy, who is delivering for his home state even from the grave.

For a while there I tried to listen to President Obama's "summit" with the Republicans on health care. But when Senator Schumer started praising Republican Senator Coburn's suggestion of the government sending "undercover patients" in to doctors' offices -- "a great idea," Mr. Schumer said -- I turned it off. It brought to mind civil liberties lawyer Harvey Silverglate's answer to my question about the difference between entrapment and an actual crime. It's a classic approach with Mr. Schumer to suggest a new government program to undo the effects of another government program. When people spend their own money, they watch it carefully to make sure it isn't wasted. When they are spending, in Medicare or Medicaid, the government's money, they don't care as much whether a doctor overbills, because they aren't paying. Instead of sending in a team of government agents in as pretend "patients" to waste time that doctors could be using to treat genuinely sick patients, why not deal with the original distorted incentive by eliminating the third-party payment? When the Republicans and Democrats start agreeing on bright health care ideas, it's a good signal for patients and taxpayers to get nervous. Can you imagine the scandal when a genuinely sick person dies in the waiting room because a doctor or a nurse was busy dealing with an undercover fraud investigator disguised as a "patient"? Senator Coburn is a physician himself and has a reputation as a conservative. Maybe I am overreacting or paranoid, and the idea isn't that dissimilar to undercover drug busts or to sending "testers" out to interview for jobs or try to rent apartments as part of enforcing civil rights laws. But I can't escape seeing similarities to the Soviet Union's spying on its own citizens. In order to obtain an appointment with a doctor, the undercover patient will probably have to lie about why he or she really wants to see the doctor. And once a government starts telling lies to its own citizens as a matter of official policy -- well, it's hard to see it as conducive to freedom.

This video from a right-wing source shows how the Democrats are being hypocrites if they go ahead and pass health reform using just 51 votes in the Senate. This left-wing New York Times article, headlined, "As Senate Majority Shifts, So Does View of 'Reconciliation,'" takes essentially the same fact-set and says it shows the Republicans are being hypocrites. Seems to me there's plenty of hypocrisy to go around.

When we first wrote, back in November, about the $300 million verdict that a Florida jury awarded to a 61-year-old ex-smoker who sued Philip Morris USA, we said, "Damages will probably be reduced on appeal." Sure enough, a judge has reportedly reduced the award to $39 million, calling the original jury verdict "grossly excessive." If you think the smoking verdicts are high, wait till they start going after plastics.

It's even worse in Britain, where, Bloomberg News reports:

Prime Minister Gordon Brown, whose ruling Labour Party wooed financiers before and after taking office in 1997, and opposition Conservative leader David Cameron are turning publicly on the City, Europe's largest financial center and a focus of trade for almost 2,000 years.

Brown lambasted the "bankrupt ideology" of free market "fundamentalism" at his party's conference in September and pledged to make banks "the servant of people."

In October, Cameron vowed to promote "quality of life" as well as "quantity of money." He wouldn't change Brown's decision to raise the rate of income tax for the highest earners to 50 percent. "The rich will pay their share," he said.

Mr. Cameron's "Conservatives" have hired some of President Obama's campaign consultants, the Wall Street Journal reports.

For a while I've been writing about how I couldn't understand why the Wall Street Journal was backing special favorable treatment for venture capital over other firms -- see here, here, here, and here. Today comes a Journal op-ed from Tom Perkins, who is described as "a former president of the National Venture Capital Association, a partner emeritus of Kleiner Perkins Caufield & Byers" and "a director of News Corporation," which owns the Wall Street Journal. Now it makes sense. We're still waiting for the Journal article on the lobbying of Kleiner Perkins-backed Fisker Automotive.

The Wall Street Journal has an editorial this morning about Obama's proposed Consumer Financial Protection Agency that repeats without even a scintilla of skepticism a claim made by Goldman Sachs's CEO, Lloyd Blankfein, at a hearing of the Financial Crisis Inquiry Commission. Here is how the Journal editorial puts it:

Testifying recently before the Financial Crisis Inquiry Commission, Goldman Sachs CEO Lloyd Blankfein explained why his firm has nothing at stake here: "Because we are an institutional firm that largely focuses on corporations, governments and large public and private investing organizations, we do not have retail businesses." He added that "we agree that a more specific focus on consumer protection, whether in the context of a new agency or otherwise, is warranted."

Israel's official Coordination Forum for Countering Antisemitism has now responded by removing my photograph and the reference to an article posted on this site from its list of anti-Semitic events and its photo gallery of anti-Semites. What a relief! Thank you to everyone who helped to clear my name.