Back in September, when the Wall Street Journal headlined an item about Bill Gross's Pimco increasing its Treasury holdings "Risk Avoidance," this site took exception, writing, "the Journal seems to be buying into the idea that U.S. Treasury bonds are low risk, or even no-risk. Traditionally U.S. Treasury bonds have had low risk of default, but they certainly aren't risk-free. ...while it may seem a remote possibility, the risk that the Treasury would default on certain government debt is not so remote that it isn't being discussed in some corners of Wall Street. Most see inflation/dollar devaluation as a more likely scenario because it avoids the public embarassment of a default. But these are risks, and someone investing in U.S. government bonds isn't avoiding those risks, he's embracing them." The Wall Street Journal now seems to have come around to FutureOfCapitalism.com's point of view on the matter, with a column noting that the price of insuring against a Treasury default has soared in recent months, and reporting, "Widows, orphans and retires [sic] are constantly reassured that such bonds are without risk. They're not....For investors, the greatest danger is not that America could formally default on its debts, it's that the government may informally default by unleashing inflation. It's hard to see another outcome."

John Stossel's first show on the Fox Business Network airs tomorrow at 8 p.m., and will be devoted to Ayn Rand and the novel Atlas Shrugged, according to Mr. Stossel's blog. One of the guests on the Stossel program will be C. Bradley Thompson, who is the BB&T research professor at Clemson University and the executive director of the Clemson Institute for the Study of Capitalism. Before the Stossel show taped, FutureOfCapitalism.com's editor had lunch with Professor Thompson and interviewed him.

I begin by asking Professor Thompson for a simple, one-sentence definition of capitalism. The definition on the Clemson center's Web site is four paragraphs long. "Capitalism is the political and economic system that completely separates the economy from the state and has as its purpose the protection of individual rights," Professor Thompson replies.

We've been writing quite a bit over the past weeks about the idea of a tax on certain stock and options transactions (see, for example, here, here, and here), so it's nice to see the Wall Street Journal get a piece of the story this morning with an op-ed by Princeton professor Burton Malkiel and the chief investment officer of the Vanguard mutual fund group, George Sauter, giving some reasons that such a tax is a bad idea. They didn't mention my favorite, which is that by taxing stocks and options but not government bonds, the politicians are just making it even easier for themselves to borrow and spend. The final two sentences of the Journal article struck me: "The transactions tax would gravely wound financial markets. It is hard to imagine a piece of legislation that would have more damaging unintended consequences." It's always dangerous to speculate about motivations, but it may be that Mr. Malkiel and Mr. Sauter are being too generous when they describe the consequences of the legislation as "unintended." It seems perfectly possible that the sponsors of the legislation actually don't like financial markets, and intend to wound them.

An editorial in National Review defends the Federal Reserve and Ben Bernanke's chairmanship of it: "Bernanke, who is being sweated by senators soon to vote on retaining him as chairman of the Federal Reserve, is the principal architect of the government's interventions in the banking industry during the financial crisis. That intervention probably represented the best available course of action in the circumstances, and it very likely averted a much worse recession than the one we've experienced." At the Campaign For Liberty (Honorary chairman, Ron Paul), Thomas Woods calls the editorial "absolutely unbelievable" and wonders if he picked up the wrong political magazine, "Seriously, am I reading The New Republic? Is there even a difference anymore? Pro-Fed, pro-empire, pro-bailout, anti-Ron Paul -- the left-neocons and right-neocons sure have a lot in common." I'm not sure that neocon is the right word, and I don't know that "empire" has much to do with it, but it is interesting that National Review is endorsing the Bush-Paulson-Geithner-Bernanke intervention in the banking industry as "the best available course of action in the circumstances" at a time when President Obama is nominating Mr. Bernanke for another term as Fed chairman.

The Far Eastern Economic Review has a piece on the persecution of China's human rights lawyers that The Browser aptly describes as "corrective to received notions of China as modernising, liberalising society." If the American left gave these accounts even half the attention they devote to accounts of waterboarding of actual terrorists at Guantanamo, it would be something. Here is how one human rights lawyer in China was treated: "His tormentors, some of whom he recognized, put burning cigarettes to his eyes until they were 'smoked.' They used electric rods on his genitals. They pierced his genitals with pins, and they smeared him with excrement." It's great that the Far Eastern Economic Review, which is owned by Rupert Murdoch's News Corp., is willing to publish this sort of thing; sad that the article appears in the final issue of the Far Eastern Economic Review, which News Corp. announced in September that it would close.

The Supreme Court this morning heard oral arguments on the appeal of publishing executive Conrad Black, whose lawyer argues that the "honest services" statute under which he was convicted is so vague and broad that it is an unconstitutional affront to the rule of law. David Frum has a dispatch from the courtroom that seems to indicate things went fairly well for Lord Black, who, before he was ousted and prosecuted, helped me and my partners to launch the New York Sun.

Bloomberg, the Wall Street Journal, Reuters, and Crain's all have news articles on the fact that, as Crain's describes it, "Tishman Speyer, led by longtime developer Jerry Speyer, is in hard-nosed negotiations with officials of the Federal Reserve Bank of New York to rework an estimated $1.4 billion in loans. The Fed inherited the mortgages as part of the 2008 collapse and sale of Wall Street investment bank Bear Stearns Cos." What none of the four articles report is that Mr. Speyer himself is a former chairman of the Federal Reserve Bank of New York. He's no longer on the board of the New York Fed and was no longer chairman when the Fed took over the loans. Current New York Fed board members include the president of Columbia, Lee Bollinger, and the president of the Partnership for New York City, Kathryn Wylde; Mr. Speyer is chairman emeritus of both Columbia and the Partnership. None of the four news articles report that, either. We're not suggesting that there's anything inappropriate going on. The articles seem to portray the Fed as being tough rather than lenient. Maybe the New York Fed will treat Mr. Speyer the same way a private lender that he had no special ties to would treat him. The only way to really make sure of that, though, would be to have the loan with a private lender rather than with the Federal Reserve, which is a government institution.

William McGurn has a well-crafted and interesting column in today's Wall Street Journal making the point about what Amity Shlaes called the "arrogance" of central planning. Mr. McGurn, who served as President Bush's chief speechwriter, sets up a dichotomy between "conservatives" and "President Obama and his Democratic allies," but he doesn't really get into the fact that there's some significant overlap between the Obama economic team and the Bush one, namely Timothy Geithner and Ben Bernanke. Writes Mr. McGurn:

In an era that pays homage to globalization and the supposedly "flat" world, it's an astonishing thing: Crossing the border from Latin America into the United States "appears to make the productivity of a low-skilled worker ten to twenty times higher, based on the wage differential."

So say Arnold Kling and Nick Schulz in their new book, From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and The Lasting Triumph over Scarcity, which may make a lot of readers think differently about the importance of national borders.

The authors quote the director emeritus of the McKinsey Global Institute, William Lewis: "We compared the construction industry in the U.S. with construction in Brazil and found that in Houston, the U.S. industry was using Mexican agricultural workers who were illiterate and didn't speak English. They were not any different than the agricultural workers who were building similar high rises in Sao Paolo, say. And yet they were working at four times the productivity."

The number of non-profit organizations that can offer their donors a tax deduction has grown 60%, to 1.1 million, in the past decade, the New York Times reported in a front-page news article over the weekend. "The $300 billion donated to charities last year cost the federal government more than $50 billion in lost tax revenue," the article says. That is one way to look at it, from the perspective of a desire to maximize government revenue. There are plenty of other interesting factors and motives at play here that deserve comment, though. One is, as I have mentioned, "the cultural and attitudinal shift on university campuses toward non-profit or government employment and away from the private, for-profit sector." Another is that, given the choice between having the government spend the money or having it spent by non-profits, a lot of people are voting with their donations that they'd prefer the non-profits. It's also interesting that folks like Warren Buffett, George Soros, and Bill Gates's father, who favor an estate tax and, in the case of Mr. Buffett, other taxes as well, have nevertheless devoted themselves to big non-profit foundations that allow them to avoid paying taxes on most of their wealth. The Times article doesn't get into that aspect of it. If Congress raises rates or lowers the exclusion on estate taxes, or even if Congress raises income tax rates, that just makes the tax escape hatch of charitable donations more attractive. If non-profits expanded as much as they did during the lower-tax environment of the Bush administration, imagine how they are going to take off once the Bush tax cuts expire. It could mean that some of the government revenue gains that have been forecast as a result of the expiring tax cuts will fail to materialize. More broadly, the rise of the non-profit model and the attending disdain for profits may make it harder to accumulate the big fortunes that fund all these charities. We'll have more to say about this in the days ahead.

USAirways will eliminate 261 jobs at La Guardia Airport as it scales back its shuttle service between New York, Boston, and Washington, switching to 99-passenger Embraer regional jets from 124-seat Airbus jets, the New York Times reports. The Times reports toward the end of the article that Amtrak's Acela train service "has been cutting into the shuttle ridership," but it doesn't make the explicit connection between the $1.5 billion a year in taxpayer money that Congress spends on Amtrak and the loss of the 261 jobs in New York. The thing about government spending is that it has a way sometimes of competing with private enterprise. Amtrak will argue that Acela is profitable and that the subsidy goes to less-traveled, lower fare routes, but USAirways has less-traveled routes, too, that may attract government subsidies in various ways, but not at the level of a $1.5 billion annual direct appropriation. If Acela is profitable, why does the government need to run it, anyway? Why not sell it off? Anyway, the next time Congress has a hearing on funding for Amtrak, it would be nice to invite some of the 261 laid off USAirways employees to testify about whether their tax dollars should be spent subsidizing a firm that competed with their company so effectively that it put them out of their jobs. We're not suggesting that the USAirways employees are entitled to perpetual employment, but it's worth remembering as the government ponders job creation programs that sometimes when the government tries to create or preserve jobs, such as the ones at Amtrak, the government action has the additional consequence of destroying other jobs, such as the ones at USAirways.

A New York Times dispatch on bank nationalization in Venezuela reports that "Despite" the efforts by President Hugo Chavez "to assert greater state control over the economy, corruption in Venezuela is thriving by various measures." The word "despite" implies that this is somehow unexpected or puzzling, and that ordinarily more government control over the economy would lead to less corruption. In fact precisely the opposite is true, and the formulation discloses the assumptions of the Times reporter and editors.

The Wall Street Journal has an editorial comparing the situations of Senator Max Baucus, a Democrat who recommended his girlfriend, a former staffer, for a post as U.S. Attorney, and Paul Wolfowitz, a Bush administration official who had a relationship with a woman who worked at the World Bank when he was president of the bank. The Journal accuses Democrats and "their media allies" of a "double standard" because they hounded Mr. Wolfowitz from office yet seem to be giving Mr. Baucus a pass. But it seems as if the Journal itself is displaying something of a double standard. After all, they defended Mr. Wolfowitz. Yet the paper described Mr. Baucus's behavior as "nepotistic," sneers at the possibility that Mr. Baucus's girlfriend was hired on her own merit for another post in the Justice Department ("Of course she was," the editorial says sarcastically), and praises the couple for having "come to their senses" and deciding to withdraw her application for the U.S. Attorney post. It's ironical that the Wall Street Journal, of all places, can't conceive of the possibility that sometimes the most qualified woman for the job just happens to be romantically engaged with the boss -- especially given that the paper's one-time publisher, Karen Elliott House, was married to its chairman, Peter Kann, and given that the guy who took over after Ms. House and Mr. Kann left, Rupert Murdoch, has a wife, Wendi Deng Murdoch, who is the "chief strategist of MySpace China," a News Corp. property. Now, one can argue that it's one thing for personal ties to come into play in a company, even a publicly traded one, and another thing to have them come into play in a government office. But there's no argument in the Journal editorial that Mr. Baucus's girlfriend was unqualified or that she wouldn't have done a fine job as U.S. attorney. There's no explanation of why nepotism is good in the private sector but bad in government. There's just innuendo amounting to the argument that the Baucus girlfriend's personal life should have disqualified her from the U.S. Attorney job.

Senator Charles "Deerslayer" Schumer is at it again, this time taking aim not at Bambi but at banks charging ATM fees that the Democrat from New York judges to be "onerous." Said the senator, in demanding that the chairman of the Federal Reserve review the issue: "ATM fees are getting so onerous that the costs of accessing your money easily outweighs the convenience factor. These mounting fees demand a response from federal regulators. Consumers are bearing an unfair burden in maintaining the health of banks' balance sheets."

New York's City Hall newspaper has published the final installment of its series on the hard left, George Soros-backed Working Families Party. We mentioned the series earlier here. The latest piece focuses on the way the Working Families Party, which helped elect the New York City Comptroller and Public Advocate (two of the top city-wide posts) in the recent election, is now expanding nationwide, with outposts in 12 states, including Oregon, South Carolina, and Connecticut.