The New York Times's Nobel laureate economist columnist, Paul Krugman, has an article in today's paper about how wonderful Canada's banking system is. The objections I made the last time he made this point still apply, and, alas, he deals with none of them in his column.

A new Republican candidate for governor of Connecticut, R. Nelson "Oz" Griebel, is running with the position that new state employees should have defined contribution retirement plans, rather than traditional defined benefit pensions. This is a big deal; as I have argued here, here and here, the state-pension-industrial complex is a breeding ground for corruption and also exposes taxpayers to significant expenses. The Connecticut Mirror and the Hartford Courant have coverage.

Writing about the possibility of a 2012 presidential run by Mayor Bloomberg, yesterday we said, "he can't be bought by the special interests." The New York Post has an article today on the flip side of that, which is that in the marketplace for interests, Mr. Bloomberg is a buyer, not a seller. The Post reports: "A $750,000 payment from Mayor Bloomberg's campaign was delivered to a mysterious Albany company that wasn't even created until one month after the November elections, The Post has learned. In an unusual transaction, Bloomberg's campaign last month sent a $1.2 million check to the state Independence Party -- and the party in turn transferred $750,000 to a previously unknown firm called Special Election Operations. The Independence Party appears to have kept the remaining $450,000. Special Election Operations has no Web site, isn't found in any Internet or database searches, and was incorporated with the state on Dec. 3, about a month after Bloomberg won re-election as an independent."

The Nation magazine has an editorial headlined "Move Your Money," arguing that instead of waiting around for Washington to break up the big banks, consumers should help do the job themselves. "Are you angry about Wall Street's reckless excesses? Are you disappointed with President Obama's limp approach to reform? You can change this, acting individually and collectively. Withdraw your deposit and savings accounts from the large banks that brought the system to ruin and were subsequently rescued with billions in government bailouts. Put your money instead in smaller, safer banks or credit unions closer to home," the magazine says. (It's not necessarily true that smaller banks are "safer" in the sense of less likely to fail, though they may be safer in the sense that if they do fail, there is less of a danger that they'll bring a lot of other things down with them. And if your account is insured by the FDIC it's pretty safe, anyway.)

The state of Michigan is offering Michael Moore a refundable tax credit for his film Capitalism: A Love Story. Michael LaFaive of the Mackinac Center for Public Policy writes, "This subsidy should be rejected by Moore on principle alone. Moore's acceptance of the Michigan film incentive subsidy is troubling because he has grown wealthy railing against corporations and capitalist institutions - such as Wall Street - for enriching themselves at the expense of the little guy and taxpayers....Moore - with his every-man theatrics - asks the taxpayers of Michigan to subsidize his work and by extension his life. He should not. Doing so just smells like a conflict of interest and it makes this award-winning filmmaker appear hypocritical and insensitive to the plight of Michigan's taxpayers."

Link via Carpe Diem.

The Congressional Effect Fund is looking pretty good, year to date, after lagging in 2009.

David Brooks, writing in the New York Times, is right that the time is right for a Ross Perot-like candidate, wrong that President Obama can head it off by breaking another campaign promise and backing tax increases on "the lower 98 percent." Mr. Obama has already flip-flopped from his campaign positions on a spending freeze, a tax on Cadillac health plans, and an individual mandate to buy health insurance. Breaking his promise not to raise taxes on anyone other than the rich (the cigarette tax may not count, if you are a non-smoker) -- would only strengthen the appeal of an angry outsider Ross Perot type candidate, not mute it. It's not just the promise-breaking that would offend, but the idea of Washington taking away more money that Americans earned want to keep for their own families rather than give to politicians for distribution in collaboration with lobbyists.

FutureOfCapitalism.com item about the Securities and Exchange Commission and climate change: January 27, 2010.

Wall Street Journal editorial on the same topic: January 29, 2010.

The Wall Street Journal's Gerald Seib has a column interpreting Scott Brown's election in Massachusetts, and the overall national mood, as anger aimed not just at President Obama but as Washington in general: "The message Americans are sending 'is a big one, and the message is we hate what's going on in Washington,' says Peter Hart, the veteran Democratic pollster who conducts the Journal/NBC News survey with Republican Bill McInturff."

Nathan Myhrvold, in a conversation on Bill Gates's blog:

look at Wikipedia. For about 10,000 to 100,000 people it is an obsession that could properly be called entertainment. They edit the thing for fun – or anyway for zero monetary reward, so no economic stats there.

For the rest of the planet it is an amazing resource – incredible information on just about anything. Where does that fit in any economic analysis?

The whole conversation is worth reading, in part as a remedy to the complaint that, as Gates paraphrases it, "middle class salaries have not gone up much."

President Obama made a nod to immigration reform last night in his State of the Union address, which makes it a timely moment to run out this opinion piece by Richard Herman, an immigration lawyer who is co-author of Immigrant Inc.--- Why Immigrant Entrepreneurs are Driving the New Economy (and how they will save the American worker) (John Wiley & Sons, November, 2009), which we reviewed here earlier:

The White House has once again announced its commitment to immigration law reform in early 2010. So far, however, there is no sign that the administration, the Congress, or any other national leaders have learned the lessons from past attempts on this issue, most notably the ugly debate and legislative failure in 2007.

The Economist reports on the practical difficulties of breaking up big banks into ones that are small enough to fail:

banks might have to be ground into gravel rather than just broken in two. The smallest firm subject to the Fed's stress tests in May had risk-adjusted assets of about $100 billion. If this were the minimum size of a systemically important firm, then America's four big banks would need to be split into 48 separate companies to be small enough to fail. American policymakers will be acutely aware that there is almost no appetite anywhere else, except Britain, for breaking up banks.

Marc De Vos, professor at Ghent University and the general director of the Itinera Institute, a Brussels-based non-partisan policy institute, is the author of After the Meltdown: the future of capitalism and globalization in the Age of the Twin Crises, just published by shoehornbooks.com. He submits the following:

We have had our New Year's wishes and the fanfare of pundits gauging the potential for economic growth in the first year of a post-crisis world. Much attention has been paid to the bricks of economic recovery scattered around the world. Very little attention has been paid to the foundational pillars of sustainable growth: open and competitive markets. In fact, the persistent delays in financial reregulation and the return of the stock market bull are feeding the impression that the world is slowly returning to business as usual. "Is that all?", read the rhetorical headline of Newsweek's special 2010 edition. My answer is: far from it!

Question for discussion: If those on the right are now defending the rights of foreigners to spend money in American elections, what to make, in retrospect, of the whole flap over the injection of Indonesian and Chinese money into the 1996 Clinton campaign?

The New York Times, for what it's worth, says "in his majority opinion in the case, Citizens United vs. the Federal Election Commission, Justice Anthony Kennedy specifically wrote that the opinion did not address the question of foreign companies." The Times also says the Foreign Agents Registration Act "already prohibits independent political commercials by foreign nationals or foreign companies."

The flaws of the Securities and Exchange Commission's case against Bank of America have been a topic here dating back to August 2009, and the case is before Judge Rakoff, who has his own doubts. Now the Am Law Litigation Daily posts a column by American Lawyer writer Susan Beck in which Ms. Beck offers her own assessment: "The Securities and Exchange Commission can't get its story straight....the SEC premise--that BofA committed overt violations of securities law even though no one at the bank or its law firm was guilty of anything worse than negligence--doesn't hang together. If the SEC believes BofA's violations were so obvious, then it should have the guts to go after the lawyers and executives who made the disclosure decisions. But if it thinks the law is so fuzzy that even Wachtell Lipton couldn't get it right, it should tone down its allegations--or even drop the case." Remember, this is the Obama administration's SEC we're talking about here, folks. Why expect them to get Bank of America right when they are busy with climate change.