Verizon Wireless will keep make its exclusive deals with handset providers last for shorter timespans, the carrier said in a letter to Rep. Rick Boucher, chairman of a House of Representatives subcommittee on communications, technology, and the Internet, according to a report on the Bloomberg wire. One significant aspect of this is that the company is making the announcement not in a release to the business press, not at a conference for potential investors or at a meeting with its business partners or with analysts who cover the company, not in an announcement to its customers or its dealers, but in a letter to a Democratic congressman from Virginia. In the new environment, it is members of Congress, as much as customers, suppliers, employees, or shareholders, who set the terms of business deals. And it is yet another reminder that government involvement is not limited to banking or health care or automaking, but is really stretching into every corner of the economy.

The House health care bill would increase the number of income tax brackets to "a post-1986 high of nine," reports James Pethokoukis of Reuters, who quotes Barack Obama's "Audacity Of Hope" book: "The high marginal tax rates that existed when Reagan took office may not have curbed incentives to work or invest, but they did distort investment decisions — and did lead to the wasteful industry of setting up tax shelters."

The talk of London is Sir David Walker's proposal to defer a quarter of bonus payments for bankers and traders for three years and another quarter for five years. If this is such a good idea, why restrict it to the financial industry? And what's to stop the firms from getting around it by just revising their compensation policies to pay more in base salaries and less in bonuses?

An earlier post raised the possibility that, in the absence of Republican majorities in either house of Congress, interest groups, lawyers, or judges would provide resistance to President Obama's expansion of government influence in the economy. One such interest group, the American Medical Association, does not seem to be rising to that role. Today it issued a letter backing the House health-care overhaul bill that would, according to the Tax Foundation's analysis, raise the top marginal tax rate in New York City to a confiscatory 58.68 percent, and raise the overall top marginal rate to more than 50 percent in 39 states. Maybe the AMA figures there aren't that many doctors earning more than $1 million a year?

First the Wall Street Journal editorial page suggested a tax on Goldman Sachs. Now President Clinton's labor secretary, Robert Reich, writes in favor of imposing such a surtax on both Goldman and JP Morgan. He says the rate should be set "at least 50 percent of their profits from here on."

With the government stepping in to fund nearly everyone, why isn't it moving to aid CIT? One reason may be that many of the small businesses that CIT lends to aren't organized into politically influential unions such as the United Auto Workers, and their employees may not be high-earning campaign contributors or fundraisers like those at Goldman Sachs or JP Morgan.

The framing of the CIT issue in the press is that the government will not give the lender a "second bailout." As the headline of this Associated Press dispatch put it, "Government will not give lender CIT 2nd bailout." The wires quoted a treasury spokeswoman as saying, "even during periods of financial stress, we believe that there is a very high threshold for exceptional government assistance to individual companies."

But at this point, what is exceptional isn't government assistance to CIT. It's the denial of government assistance that is exceptional.

With all the energy going into worrying about how the government can get big banks to start lending again, non-bank lenders are rising to fill the gap. Bloomberg has an intriguing article about two relatively small Web-based businesses, lendingclub.com and prosper.com. The article notes that so-called "peer-to-peer" lending "isn't as regulated as banks."

If Bank of America is operating under a memorandum of understanding with the government that "requires it to overhaul its board," as the Wall Street Journal reports, wouldn't you think that might be something the bank or the government might want to disclose to shareholders or potential shareholders, rather than keeping a secret?

"It is good to report that a landscape disfiguring McDonald's not long ago went belly up at a major intersection," Joseph Epstein writes in this morning's Wall Street Journal. His essay praises independently owned odd shops in contrast to those that are "corporate owned." It's a strange argument to be making in the corporate-owned Wall Street Journal. One wonders what exactly is so "good" about the McDonald's going out of business. Is Mr. Epstein glad that the workers at the McDonald's lost their jobs? Or is he happy that the franchisee lost his investment? Many of the "corporate owned" stores he denounces were at one time in the past independently owned but grew to become successful and turned to public markets to finance their growth. All in all, it is an odd thing -- an indicator of the present mood -- for the editorial page known as the voice of capitalism to be cheering the demise of a business.

An article on the Bloomberg wire sheds some additional light on the "Goldman Tax" suggested by the Wall Street Journal and discussed in an earlier post here today. The wire reports: "The FDIC will propose slapping fees on the biggest bank holding companies to the extent that they carry on activities, such as proprietary trading, outside of traditional lending....The fees would go to a reserve fund for rescues of bank holding companies, modeled on the FDIC's deposit-insurance fund....The Treasury's plan would tax financial firms only after bailouts occurred, reflecting concern that a pre-funded bailout reserve would worsen moral hazard, making the firms confident of a rescue in case their bets go wrong."

Goldman Sachs had a good quarter, and the Wall Street Journal editorial page responds by proposing to impose a special "FDIC-style bailout tax" on the company. Either that or "simply to restrict the proprietary trading." It's not clear that restricting the proprietary trading would be so simple, because the Journal does not spell out what the restrictions would be, and the editorial suggests the restrictions were too heavy-handed for even the Obama administration, if not for those ardent regulators over at the Journal editorial page. Imposing a new tax on Goldman after it paid back with interest the money it got directly from Treasury seems to violate the notion that the rule of law be announced and predictable and non-retroactive in the way Richard Epstein describes in this talk. If accepting bailout money would subject recipients to a new tax, both practical concerns and more lofty fairness issues dictate that they should have been told about the tax before they accepted the bailout money, not afterward when someone at the Journal all of a sudden decides that they are making too much money. The Journal claims that "ideally" it "would shed" implicit guarantees to Goldman Sachs and other financial firms altogether. But when it came down to it back in the Bush administration, the Journal editorial page supported the TARP at a time when others opposed it.

With Wall Street abuzz about Goldman Sachs's strong second quarter earnings news, some context is in order. Here's one perspective:

One morning this spring, the Treasury secretary, Timothy Geithner, was sitting at a table looking up at a Democratic congresswoman peppering him with rapid-fire questions about how one New York investment bank managed to find its way into the middle of so many aspects of the federal government's unusual intervention in the financial sector. The member of the House Financial Services Committee asked about Mr. Geithner's plan to pick five asset managers to manage funds as part of the Public-Private investment program.

In an earlier post on Arthur Samberg and Pequot Capital, I wrote, "What is active, arbitrary government regulation good for? Helping politicians to extract campaign contributions from the individuals subject to regulation." The latest case in point is CIT Group.

In his New York Times column today, Bob Herbert uses the phrase "malefactors of great wealth," and adds parenthetically, "thank you, Teddy." The reference is not to the ailing senior senator from Massachusetts but to the first President Roosevelt. It's a reminder of how the Times has changed. Back when Teddy Roosevelt was active as a politician, the newspaper was sharply critical of his policies. In a September 30, 1913 editorial headlined "Roosevelt's Super-Socialism," the Times complained that his "death and income taxes" are "imposed to take away the possessions of the rich." The newspaper warned: "It would kill the spirit of enterprise, at once put a stop to industrial progress, and bring the country's business to the dead level of stagnation. Who would strive and toil, who would live laborious days in building up a great business to accumulate wealth that excise taxes would diminish during his life and that the Government would seize at his death?…If you destroy the incentive you prevent the achievement."

Secessionists in Alaska and Texas are part of a backlash against "a federal power grab that might make even FDR's New Dealers blush," the Wall Street Journal reported recently. At some point, if the tax burden keeps rising and if the number of those bearing most of it keeps shrinking, and if the government keeps increasing its involvement in heretofore private sectors of the economy, opting out will be an option that people start taking seriously. When, last year, a member of New York's City Council suggested that the city secede from New York State because the city pays more than $11 billion more to the state than it gets back in services each year, The New York Sun wrote an editorial saying, "secession has a Confederate ring to it that makes us recoil. And it's possible to take the logic to extremes — the Upper East Side probably pays more in taxes to New York City than it gets back in services, too, and no one would think of it seceding. Nor would New York think of seceding from America, though it pays far more to Washington than, by some measures, it gets back directly." The Sun's Gary Shapiro had reported back in 2006 on the First North American Secessionist Convention.