Good Wall Street Journal editorial this morning about the federal takeover of the student loan industry, though it would have been stronger had it dealt somehow with the problem of college officials steering students into loans offered by private companies in which the college officials had personal financial interests.

One of the factors to watch in the interplay between business and government is the revolving door through which individuals exit government and enter the private sector. A friend just pointed me to one example, the crew at Promontory Interfinancial Network, LLC. It includes a former U.S. comptroller of the currency, Eugene Ludwig; a former vice chairman of the Federal Reserve Board, Alan Blinder, and a former chief of staff at the Federal Deposit Insurance Corporation, Mark Jacobsen. They make their money in part by selling a service, the "Certificate of Deposit Account Registry Service" or CDARS, that offers, as their Web site puts it, "the most convenient way to enjoy access to full FDIC insurance on deposits of up to $50 million." If the government wants to raise the deposit insurance limit to $50 million from the old $100,000, why not just do it outright and have a proper policy debate about whether those with $40 million to invest really need a government safety net to absolve them of any responsibility to make sure the bank they are placing funds in is sound? Instead, some former government officials are making money by selling roundabout large-scale access to the government guarantee. There's nothing wrong with what they are doing -- it's creative, in a sense, and there are plenty of government bond salesmen out there who make a living selling the safety that comes with investing in the government. But there's something vaguely unsettling about a board of a financial-services company that touts that it "includes former government officials - a former FDIC Chairman, Federal Reserve Board Governor, and Deputy Secretary of the Treasury Department, as well as a former NASD Chairman, U.S. Senator, Counselor to the President, and White House Chief of Staff." It's as if the central skill required in banking is navigating the government regulatory system.

The op-ed piece by Whole Foods CEO John Mackey criticizing Obamacare was the subject of a series of earlier posts: see here, here, and here. Now the Economist is weighing in, reporting that 13,000 people had joined a "Boycott Whole Foods" group on Facebook, and reporting that Mackey is distancing himself from the headline the Wall Street Journal gave his article. The Economist's take: "the best strategy, from the perspective of maximising shareholder value, is probably for customers to know as little as possible about the personal opinions of a company's boss." But it acknowledges that that approach "is bad news for society, which could do with hearing, from time to time, the logical arguments and wisdom built on experience that, at their best, business leaders can bring." On the other hand, maybe in the long run shareholders will benefit if CEOs speak out in defense of the capitalist and free market systems that allow their companies to prosper.

An economics professor at Harvard, Kenneth Rogoff, has an op-ed piece in today's Financial Times that has a lot in it that is highly debatable, but has at least one point that is worth taking seriously:

The fact is that banks, especially large systemically important ones, are currently able to obtain cash at a near zero interest rate and engage in risky arbitrage activities, knowing that the invisible wallet of the taxpayer stands behind them. In essence, while authorities are saying that they intend to raise capital requirements on banks later, in the short run they are looking the other way while banks gamble under the umbrella of taxpayer guarantees.

In the post from yesterday on questions raised by the $100 million over budget and 8-year behind schedule New York City effort to build a golf course in the Bronx, I omitted some of the harder questions, such as why isn't there more public outrage and organized action in response to such news, action that generates changed behavior and improved outcomes? Where, in other words, is the accountability?

These aren't simple questions to answer empirically, but here are some thoughts.

The Spread-the-Burden Effect. One person would have a hard time lifting a Honda Civic by himself. But if 20 people all lift together, it's a do-able task. So, while $100 million sounds like a lot, spread over the 8 million residents of New York City, it's $12.50 a person, which, spread over several years, doesn't seem to many people like all that much money.

Rose Friedman, the wife of Milton Friedman and co-author with him of the landmark book Free to Choose, died today. The Friedman Foundation notes in a statement that "In addition to her many other accomplishments, Rose had the distinction of being the only person ever known to have won an argument against Milton Friedman."

Last night we noted a statement from the Obama administration opposing London's traffic congestion tax. This morning the Tax Foundation blog reports that London claims the U.S. government owes $5.7 million in unpaid traffic congestion taxes. Like many of the individuals serving in the Obama administration (Treasury Secretary Geithner, Capricia Marshall, Kathleen Sebelius), the administration itself doesn't seem to mind raising taxes, but doesn't like actually paying them.

A high-ranking member of the Obama administration recently was sent a letter accusing the government of "monopolising key economic sectors such as transport, telecommunications, and banking; strengthening their control of state and private media; carrying out forced displacement and confiscating land without due process; and diverting public funds to private uses with impunity," the The Financial Times reports in an editorial. Oh, the government in question is that of Angola, and the FT says the dissidents who put themselves at risk by protesting deserve a reply from Secretary of State Clinton. The FT doesn't draw any parallels to the expansion of government control of the economy here in America, and certainly the description applied to the situation here will strike many as a stretch. For one thing, telecommunications haven't been taken over here. But others will see some similarities. The FT editorial concludes by urging that "The US should not repeat its mistake of tolerating despotism to gain short-term stability." The admonition is intended to apply to foreign policy but it could just as easily apply to economic policy.

Here is an amazing fact that goes a long way toward explaining why big business is so eager for some sort of health-care overhaul: Starbucks says "it spends nearly as much on health insurance for its workers as it does on coffee," the New York Times reports. Like the claim that General Motors spent more, per car made, on health benefits than on steel, that is the sort of information that has a way of resonating,

The Wall Street Journal today runs an op-ed piece arguing against government limitations or taxes on high-frequency trading. The author of the article is Arthur Levitt, who is identified by the paper only as "chairman of the Securities and Exchange Commission from 1993 to 2001." Omitted is any disclosure of Mr. Levitt's status as a paid adviser to Goldman Sachs, which has an interest in how the policy debate on regulating or taxing high-frequency trading turns out.

FutureofCapitalism.com on the backlash by left-wing customers prompted by John Mackey's Wall Street Journal op-ed opposing Obama-care: August 12, 8:58 p.m. ABC News's John Stossel on same: August 14, 12:44 p.m. Wall Street Journal editorial on same: August 18, 2009.

The Obama administration has found a tax it opposes. Not here in America, but in the United Kingdom. A statement issued late today from the State Department says that the American government opposes the congestion tax that London imposes on traffic coming into the city. State says the tax "is prohibited by various treaties, including the Vienna Convention on Diplomatic Relations; the Vienna Convention on Consular Relations; our 1951 bilateral Consular Agreement with the United Kingdom; and the NATO Status of Forces Agreement." Mayor Bloomberg tried unsuccessfully to impose a similar tax in New York City, but I don't recall international law ever being raised as an objection. The State Department leaves unclear whether the American objection relates to the imposition of the tax on British subjects or to American diplomats.

A New York-City backed effort to build a golf course in the Bronx is eight years and $100 million behind schedule, the New York Post reports. The New York Sun reported on June 27, 2002, that the cost of the project had ballooned to more than $40 million from $22.5 million, in part because of the costs of environmental remediation. Various Web sites (here, here, and here) estimate the private-sector cost of building a golf course at anywhere from $2 million to $6 million. It raises all sorts of questions, including:

Back in April, the Securities and Exchange Commission proposed two approaches to restricting short-selling. Today, with the stock market sliding, the commission invited public comment on yet a third proposal. An SEC statement explains:

Unlike proposals in April, the alternative uptick rule would not require monitoring of the sequence of bids (that is, whether the current national best bid is above or below the previous national best bid), and as a result the alternative uptick rule would be easier to monitor. It also may be possible to implement this approach more quickly and with less cost than the prior proposals.

FutureofCapitalism.com on the backlash by left-wing customers prompted by John Mackey's Wall Street Journal op-ed opposing Obama-care: August 12, 8:58 p.m. ABC News's John Stossel on same: August 14, 12:44 p.m.