There's an intriguing column by Clive Crook in today's Financial Times on a book suggesting that "The US social contract needs to be revised, so that the elderly, many of whom are comparatively well off, receive less so that the poor can get more." This is a Robin-Hood, which has its own problems, but at least it's not a Reverse Robin-Hood. We made a similar point about the elderly here in connection with the "granny grant." Mr. Crook also brings some troubling data on social mobility: "The figures show that US children born in the lowest and highest quintiles of the income distribution are more likely to stay there than in Britain, for example, and much more likely than in countries such as Sweden and Denmark." I've often defended income inequality on social mobility grounds, arguing that it's not so bad that the rich are a lot richer than the poor, because some of those rich used to be poor, and they may yet end up poor again. It's an argument you hear made fairly often on the free-market side of things, but it's one that gets weaker as social mobility declines.

The New York Times has a front-page news article about how drug companies are raising prices in anticipation of ObamaCare. "When we have major legislation anticipated, we see a run-up in price increases," says a professor of pharmaceutical economics quoted by the Times, Stephen W. Schondelmeyer. The newspaper could have done the same story about health-insurance premiums -- I just found out that my family's are increasing 17% next year. The credit-card companies, of course, are doing the same thing, raising rates before legislation takes effect. As we said about the credit cards, left-wingers see this as an argument for swifter, more aggressive regulation. But there's a case, too, that the whole episode is an argument for less regulation, because businesses will find a way to make a profit one way or another, and by imposing regulations that artificially limit profits in one period, the government actions in essence force the businesses to try to make it up all at once before the tougher rules kick in.

An idea repeatedly expressed on this site is that the issues in Washington aren't so much Mr. Bush or Mr. Obama or Democrat or Republican. Both parties and administrations are complicit and participating. Or, to put it in one word, apoxonboththeirhouses.com. The latest bit of evidence came over the weekend from the New York Times, which found that lobbyists for one of the world's largest biotech companies managed to get members of Congress to introduce the biotech company's talking points directly into the Congressional Record. Reports the Times: "Genentech, a subsidiary of the Swiss drug giant Roche, estimates that 42 House members picked up some of its talking points — 22 Republicans and 20 Democrats." Both sides do it.

The New York Times, of all places, has a pretty darned good editorial this morning about the New York state budget:

It is time for the Legislature to face facts. New York spends twice the national average on Medicaid at $2,283 per person. That is the highest average in the country, with Rhode Island a distant second at $1,659. Mr. Paterson wants to scale back the health care budget by $471 million. That seems the least the state should do. Education is even more costly. The national average per student is $9,138; New York spends $14,884. Mr. Paterson's plan to cut education costs by about 3 percent, or $686 million, is clearly in line with what's necessary....Democrats are going to have to say no to the unions, especially those representing health care workers, educators and state employees. It is past time for a less-extravagant pension system that is fairer to taxpayers. It is also time to consider layoffs or furloughs of state employees, as other states have done.

Columbia Business School hosted Warren Buffett and Bill Gates last night for a forum that CNBC, which has a transcript, breathlessly billed as an appearance by "America's top two capitalists" in New York, the "world's center of capitalism." The whole event has a strangely surreal quality to it, from the sycophantic questions posed by the business school students to the answers of Mr. Buffett and Mr. Gates, which seemed sometimes disconnected to recent events. Mr. Buffett at one point proudly insisted "we have a rule of law," then a minute later praised the "excellent job" that "the officials in Washington" -- he named Henry Paulson, Ben Bernanke, and Timothy Geithner -- did by taking "unprecendented action," for which he gave them "very high marks." Where was the rule of law for the AIG and Fannie Mae shareholders, or for the Chrysler secured bondholders? Asked whether the government should have saved Lehman Brothers, all Mr. Buffett could offer was an unprincipled "perhaps." On the Lehman question, Mr. Gates had the better answer when he noted that in his industry, respected companies like Wang and Digital Equipment failed and it was considered just part of life in an entrepreurial, capitalistic economy. Mr. Buffett repeated the "most environmentally friendly" rationale for his Burlington Northern acquisition. Trains, he said, use a thrird less fuel than trucks and "put far fewer pollutants into the atmosphere." Mr. Gates tried his best to defend capitalism. "Capitalism has been massively successful," Mr. Gates said, citing the development of medicine. When Mr. Buffett was asked what he most admired about Mr. Gates, though, the answer wasn't that Mr. Gates had built a big company that made a lot of employees and shareholders rich and improved the productivity of a lot of its customers. Instead, Mr. Buffett said he admired Mr. Gates's "philanthropy." When Mr. Gates was asked what he worried about, he didn't mention erosion of the rule of law or the exploding federal debt and deficits or unsustainable entitlements that may force inflation, government defaults, tax increases that slow growth, or big cuts in defense outlays. He talked instead about the chance of a terrorist attack or a pandemic. For an event billed as an appearance by "America's top two capitalists" in the "world's center of capitalism," it was pretty thin gruel.

A company is replacing 28 unionized workers in New York with cheaper, non-union workers in Florida. If anyone else did this it would be a cue for an editorial in the New York Times denouncing "greedy corporate interests," but in this case, the company doing it is the New York Times.

Paul Krugman's column today about how America should learn from and perhaps emulate Germany's work-sharing program to reduce job losses is very similar to Kevin Hassett's Bloomberg News column on Monday making the same point. Mr. Krugman doesn't credit Mr. Hassett. Maybe he didn't read Mr. Hassett's column and just conincidentally came up with the same idea, or maybe Mr. Krugman, who is a partisan against Republicans, did read Mr. Hassett's column and is just embarassed to acknowledge publicly that he is thinking along the same lines as someone who advised Senator McCain's 2008 presidential campaign. Update: Mr. Hassett comments, in response to a query from FutureOfCapitalism.com about the two columns: "Looks familiar, doesn't it? The good news is Krugman isn't always wrong, which is very newsworthy." What neither Mr. Hassett nor Mr. Krugman really focus on is that during good times, the American system has less unemployment than Germany's does. According to the "Harmonised Unemployment Rate" maintained by the Organization for Economic Cooperation and Development, Germany's unemployment rate was 9.8% in 2006, 8.4% in 2007, and 7.3% in 2008, while that in the United States was 4.6% in 2006, 4.6% in 2007, and 5.8% in 2008. That's something to consider carefully before we go rushing pell-mell to follow Mr. Krugman's advice to adopt a German-style jobs policy.

Immigration has been one of those rare issues where I agree with the New York Times editorial page -- and with Sergey Brin's mother and the Cato Institute. Today's Times immigration editorial gives me pause, however. It's right out of Karl Marx, describing the immigration problem in America as one in which "decent, honest, hard-working" illegal immigrants "are exploited by greedy corporate interests." I'm for sharply more immigration to America for a lot of reasons -- more talent, more taxpayers, more growth, better restaurants, the fact that it's how all of us who aren't of American Indian descent got here in the first place, to name just a few -- but "honest" isn't the first word that comes to mind to describe illegal immigrants who in some cases lie to employers about their legal status in America. Even worse, the Times' line about "exploited by greedy corporate interests" is just straight out of Karl Marx. A lot of these immigrants aren't working for "greedy corporate interests" but for middle-class American families as cleaning ladies or child-care providers, or for family farms as field hands, or for family-owned restaurants as busboys or dishwashers. If immigrants are so exploited by corporate America, why do they keep leaving their home countries to come here? What the Times calls "greedy corporate interests" are also known as American businesses, and without their advertisements in the newspaper, all those Times editorial writers would be unemployed.

An editorial in today's New York Times complains that Intel's $1.25 billion antitrust settlement doesn't go far enough. It says, "Antitrust law can seem like an abstraction, but in the case of computer chips the impact on ordinary Americans is very real. Chips are a significant part of the cost of new desktop and laptop computers, and the quality of those chips has a big effect on computer performance. If Intel is using its market power to keep prices high and fend off better products, it is consumers — and not just competitors like A.M.D. — who are the losers." Of all the industries to in which to try to claim that consumers aren't seeing better products, computer chips doesn't seem to be the one; as Moore's Law describes, chip speed doubles every two years, while computer prices have stayed pretty much the same or dropped. As for keeping prices high, as I have noted elsewhere, for most of 1999 the price of the Times on a New York City newsstand was 60 cents. Today, in 2009, it's $2. That's a 333% increase. The quality of the printed New York Times certainly hasn't improved over the past decade in the same way that the power of a personal computer has over the same period. Yet the Times is jumping to the conclusion that Intel is using some illegal power to jack up its prices and prevent quality improvement. If the result of antitrust violations are the kind of price reductions and quality improvements we've seen in the computer industry, American consumers should hope for antitrust violations in the rest of the economy.

Defenders of capitalism – and I count myself among them – often see property rights and the profit motive as essentially positive, essential to progress and prosperity. So it's a challenge to be confronted by a new book by Gene Dattel, a former managing director at Salomon Brothers and Morgan Stanley, with the title Cotton and Race in the Making of America: The Human Costs of Economic Power. It's a sweeping and fact-filled account of the way in which the cotton trade was intertwined with the evil that was slavery in America.

Mr. Dattel makes a strong case that slavery was perpetuated by economic motives, not just racial bias. How else to understand the paradoxical fact that the Confederate constitution banned the importation of slaves into the Confederacy? Explains Mr. Dattel, "Slaveowners simply did not favor an increase in the supply of slaves, which would have reduced the value of their existing workforce."

"This is an administration hell-bent toward taking American towards a socialist country. And we all don't need to be afraid to say that because that's what it is," the governor of Texas, Rick Perry, said Wednesday about President Obama. The Drudge Report, which also noted Jeb Bush's statement last month that "President Obama has used the bully pulpit as a way to attack capitalism," is highlighting the comment. My earlier thoughts on the S-word are here.

The search-engine giant is funding a $7,000 summer public policy internship at the libertarian-oriented Cato Institute. One natural area for cooperation: immigration, where Cato generally favors letting more immigrants into America, and a topic on which the mother of Google co-founder Sergey Brin, Genia Brin, has a nifty op-ed piece in today's Daily News.

FutureOfCapitalism.com post on Peter Galbraith's oil dealings in Iraq and the New York Times's failure to cover such while printing his op-ed articles: October 28, 2009.

Front-page New York Times article on same: November 12, 2009.

Pelosi's Present to the Trial Lawyers, FutureOfCapitalism.com, November 2, 2009.

Wall Street Journal editorial making the same point, November 12, 2009.

"I have yet to meet a Republican primary voter who would have voted for the bank bailout, and yet our leadership did." -- U.S. Senate candidate in Kentucky Rand Paul, son of Rep. Ron Paul, as reported in today's Wall Street Journal.