"The federal government was without the [legal] authority to spend money" for several hours earlier today, Josh Gerstein reports at Politico. He notes, though we can't quite tell how pointedly, that "no disruption seems to have taken place."

A "leader" (British for editorial) in the Economist cheers the idea that members of the Group of 20 nations will "subject members' economic policies to 'peer review.'" Says the Economist: "These reviews may prove toothless, but the commitment to them is a step forward." How is it a step forward to give China or Saudi Arabia -- undemocratic countries -- a formal right to review America's economic policies? Or, as the former president of the Federal Reserve Bank of Dallas, Bob McTeer, puts it:

Steve Forbes has an essay that goes along with the issue that carries his magazine's latest list of the 400 richest Americans:

Well before the economic crisis intensified the drumbeat against "greed" and "free markets" on the part of the media and politicians, many people, including an astonishing number in business itself, didn't have a clear understanding of just what constitutes a "free" market. This is why they blame capitalism for economic disasters, such as the recent mortgage meltdown and the astronomical cost of health insurance, when those disasters have in fact been caused by the government's not allowing markets to function.

For all the hope that the rise of a certain kind of capitalism in China will bring with it political freedom, corruption persists, the Financial Times reports in an article that makes clear just how powerful the Communist Party is there:

To glean a sense of the dimensions of the organisation department's job, conjure up a parallel body in Washington. The imaginary department would oversee the appointments of US state governors and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, ExxonMobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post, the bosses of the television networks and cable stations, the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.

All equivalent positions in China are filled by people appointed by the party through the organisation department.

The Managed Funds Association, the trade association for hedge funds that is pushing to ward off more regulation from Washington, "is expected to elect Darcy Bradbury, a former assistant Treasury secretary and the chief lobbyist of a big fund, to lead its effort. Ms. Bradbury, a senior vice president for the D. E. Shaw group, will succeed Eric Vincent, who is credited with turning the once-sleepy organization into a powerful lobbying group," reports the New York Times. If hedge funds are trying to flex muscle in Washington, who better to lead the way than someone from D.E. Shaw, the firm where President Obama's chief of the National Economic Council, Lawrence Summers, earned $5.2 million a year for a one-day-a-week job? The Times article doesn't mention the connection.

"The French government will announce today the partial scrapping of the taxe professionnelle , a local business tax levied on fixed investment that has become a heavy burden," reports the Financial Times. Some of the revenue that had been generated by the tax will be made up by "a carbon tax on road fuel and energy use," the FT says. The idea that new carbon taxes should be accompanied by reductions in other taxes on, say, income or payroll has some political attractiveness, enough that it has support from both Al Gore and Arthur Laffer.

The week after Lehman Brothers went bankrupt, Treasury Secretary Paulson called both Goldman Sachs CEO Lloyd Blankfein and a Wachovia director to urge them to consider a Goldman-Wachovia merger, Vanity Fair reports in a press release announcing a book excerpt by Andrew Ross Sorkin that will appear in its November issue:

Sorkin reports that Warren Buffett was also contacted about investing in the merged company, but told a banker at Goldman that it would never happen. "By tonight the government will realize they can't provide capital to a deal that's being done by the former firm of the Treasury secretary with the company of a former vice-chairman of Goldman Sachs and former deputy Treasury secretary," Buffett said. "There is no way. They'll all wake up and realize, even if it was the best deal in the world, they can't do it."

In his New York Times column today, Thomas Friedman writes: "The right impeached Bill Clinton and hounded him from Day 1 with the bogus Whitewater 'scandal.'" That's a bit of revisionist history. Among those hounding Mr. Clinton about Whitewater were the news reporters and editorial writers of the New York Times, who aren't a bunch of right-wingers.

Justice Sotomayor has been probing the possibility that the U.S. Supreme Court should re-think whether corporations should have the same rights as individuals, we noted here a couple of weeks ago. A similar issue is being debated in the context of Europe, where Intel is trying to use the concept of "due process" to defend itself against a $1.45 billion anti-trust fine. At the Web site of the Ayn Rand Center for Individual Rights, Tom Bowden makes the case that corporations should have the same rights that its individual shareholders do, and deserve the same legal protections. He argues that while the companies may be economically powerful, they lack the political power of the state, and thus need legal protection against being "steamrollered."

The Securities and Exchange Commission is turning up the heat on California-based money manager Elliott Broidy in connection with the "pay-to-play" public pension fund scandal, the Wall Street Journal reports today. The Journal article refers to Mr. Broidy, who denies any wrongdoing and has not been accused of any crime, as a "major Republican fundraiser" who is "the former finance-committee chairman for the Republican National Committee and major donor to GOP candidates." But as this New York Sun editorial from May 11, 2006 reported, Mr. Broidy and his wife donated $83,400 to the campaigns of Alan Hevesi between 2002 and 2006. Hevesi, a Democrat, was New York state comptroller before pleading guilty to a felony and resigning from office. Mr. Broidy's wife also donated $179,000 to the campaign of the then-California state comptroller, Steve Westly, who is also a Democrat. The New York Sun editorial raised questions about the propriety of the New York and California public employee pension funds investing in funds managed by Mr. Broidy after the politicians in charge of the funds received campaign contributions from him and his wife, and it made the point, "If ever there were an argument for shifting public employees to defined-contribution pensions instead of the defined-benefit systems of California and New York, this is it." I made a similar argument in a piece for Forbes.com as the pay-to-play scandal started to attract more attention. The point is not that Democratic politicians are more corrupt than Republicans. Mr. Broidy's motivations are unknown. But in some cases these campaign contributions are not motivated by ideological or political party loyalty but by commercial interest. The Journal article plays up Mr. Broidy's Republican connections but does not mention his ties to the Democrats. It doesn't even mention that Hevesi or Mr. Westly are Democrats. The broader point is that as government officials get involved in allocating funds, it is an invitation to corruption.

Two smart writers both criticize Rep. Barney Frank over the issue of "vanilla," but from from diametrically opposing points of view. On the Bloomberg wire, Amity Shlaes says Mr. Frank is going too far to make sure consumers are offered "vanilla" mortgages: In "the 1970s, the period when a mortgage was a plain vanilla 30-year fixed contract with a local banker of the very sort Frank longs for," some buyers underconsumed housing, she writes, because "that local bank hadn't offered this buyer the right kind of mortgage at the right rate. Perhaps that market of plain 30- year products from the local bank wasn't efficient enough." At Interfluidity, Steve Randy Waldman criticizes Mr. Frank for characterizing the vanilla option as "anti-market." He writes: "he vanilla option is pro-market, because it is procompetitive. Of course, that is precisely why banks hate it: Vanilla products would turn basic financial services into a commodity business, and force providers to compete on price." He even raises and deals with the libertarian objection:

In all of the excitement over the release of Michael Moore's "Capitalism: A Love Story," we overlooked a second film screening last week with implications for the future of capitalism: Oliver Stone's "South of the Border," a movie tribute to Venezuelan nationalist strongman Hugo Chavez. Mr. Chavez and the leader of Bolovia, Evo Morales, attended an event for the movie at the Film Society of Lincoln Center. IndieWire and Time Out New York have accounts of the event at Lincoln Center, with Time Out reporting that the movie "portrays Chavez in nothing but the most superflattering light." A Bloomberg News movie review says the film "chronicles South America's socialist shift during the past decade and its emancipation from .. so-called predatory capitalism." Says the Bloomberg review: "The movie doesn't mention Chavez's blacklisting of millions of people who signed a petition seeking a recall vote against him in 2004; the persecution of political rivals; the creation of a new "Capital District" to usurp power from the opposition-led Caracas city government; and the refusal to renew the broadcasting license of Radio Caracas Television, the country's oldest station."

In today's New York Times, David Brooks has a column in which he quotes John Adams, praises the "Calvinist restraint" of early settlers in America, and claims that "Over the past few years, however, there clearly has been an erosion in the country's financial values." He writes, "Evidence of this shift in values is all around. Some of the signs are seemingly innocuous. States around the country began sponsoring lotteries: government-approved gambling that extracts its largest toll from the poor." Mr. Brooks must have an expansive definition of the word "few years." Mr. Brooks may be right or wrong about the country's economic values and whether they have undergone a shift, and one may agree or disagree with him about whether government-run lotteries are a good idea. He's off base, though, in the claim that the lottery is a departure from the practices of America's colonial past or its founding generation. This page carries a wonderful collection of links to, among other things, the Massachusetts lottery of 1744-1745, the Massachusetts lottery of 1778-1780, the Philadelphia lottery of 1748, the Rhode Island lottery of 1761, and the lotteries run by the Continental Congress from 1776 to 1782.

President Sarkozy of France may be more aggressive than President Obama on publicly confronting the Iranian nuclear program, but when it comes to state ownership of companies, Mr. Sarkozy's reputation for free-market leanings has its limits. Mr. Sarkozy has appointed a friend to run EDF, which the Economist describes as "the former state electricity monopoly that is still 85% owned by the government." Under a 2004 law, the French state "has to hold at least 70% of the capital and voting rights," according to the EDF Web site. It makes one think the New York Times's declaration that socialism in Europe is dead may be a little premature, or overstated. The term, or the political parties, may be dead, but the policies of state ownership live on. Here in America, the government usually just gives away money to the energy companies without owning them.

Since the Jewish holiday of Yom Kippur starts Sunday night and continues through Monday (the site won't be updated during that period), it's as good a time as any to answer the reader who forwarded along a copy of Norman Podhoretz's Wall Street Journal op-ed piece headlined "Why Are Jews Liberals?" The book was reviewed Friday in the Journal, and I have my own comments up at Amazon.

Since this is a site not about primarily about the Jews but about capitalism and the future role of government in business, I'll confine my comments here to a point made by Mr. Podhoretz that has implications far beyond the Jews. In his Wall Street Journal article, Mr. Podhoretz puts it this way: