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The lightning-rod of government regulation always draws a spark. The question of net-neutrality has predictably drawn fierce response and invoked the typical bromides of the sin of government interference in the garden of the free market. Orrin Hatch and James Demint contributed their views this morning in the WSJ, and though their age and demeanor may make them appear to be among the less likely users of the internet, they have a clear sense of what any government role in the internet might do – destroy the very vitality and swagger that has characterized its growth to date.

Hatch and Demint’s argument goes something like this. Because the internet has thrived over the past ten years “without a Washington politician or bureaucrat moving a muscle,” they should stand aside and allow communications networks to prioritize traffic as they are able and as is profitable. What’s more, the government doesn’t know the first thing about the internet, so if we let them interfere now, we would find ourselves “dog-paddling” in an internet backwater rather than “surfing” the broadband revolution. Rules on net neutrality would mean just that – a dramatic change that would endanger the innovation and growth we have seen to date; therefore, stand aside and let the market decide.

There are several problems with their argument. First, the origin story of the web. Hatch and Demint would have us believe that the web came to be through the agile footing of corporations organized to profit by way of a new market opportunity – the web. The web as we know it emerged not only outside of government action, but in spite of it.

But is that really the case? Let’s not forget that the internet began as a government project, and it was through investments dating back to the ARPAnet in the ’60s that created the ancestors to the world wide web. Tim Berners-Lee, the acknowledged inventor of the World Wide Web, invented it at CERN, a government sponsored research facility. The current broadband revolution may have emerged through private investment, but it was on the back of a government sponsored foundation.

Hatch and Demint are correct to consider the significance of the broadband revolution. We’ve seen a remarkable efflorescence of businesses and services over the past ten years, and the internet has become a vital source of commerce and innovation. Hatch and Demint want to do everything they can to avoid upsetting the apple cart, and they fear that government regulation to introduce net neutrality would do just that.

Net neutrality, however, is not a new idea. It’s not even a new condition. The broadband revolution came into being with each packet having equal access to the network. ISPs made noises about prioritizing traffic and discriminating against third parties, but no one did. The FCC, therefore, isn’t considering new regulation that would change the competitive environment. They’re considering regulation that would keep in place the same competitive environment that cultivated the broadband revolution. Far from running against the tide, as Hatch and Demint have argued, the FCC is considering how to maintain the status quo.

But bandwidth is finite, argue Hatch and Demint, and network neutrality will eliminate the ability to yield a return on their investments. They claim, if a network provider is going to “invest billions of private dollars in new and improved networks, they should rightly expect to set prices and manage those networks as they see fit.” First, wouldn’t one expect the market to set the price, not the provider. When a provider sets the price, those are usually monopoly conditions. Second, these investments are not new. Network providers have made record investments since the 1996 Telecommunications Act, and net neutrality doesn’t seem to have stopped them from making money. Indeed, I pay far more for my cable bill today than I could ever have dreamed in 2000.

Hatch and Demint have argued for a radical reshaping of the underlying conditions that brought us this broadband-bounty. They want to abandon net neutrality, so we can avoid the specter of “hearings and mark up meetings and regulatory comment periods,” but it also means abandoning the competitive environment that has brought about the broadband revolution. Would that not make Hatch and Demint’s argument one for a dramatic change that would endanger the innovation and growth we have seen to date? We know that the network providers are profitable, so it’s not an issue of lacking returns on investment. Is that a risk we are willing to take?

It’s rather unusual that the option market pays so much premium without extreme changes in exchange rates. The market is getting nervous.

—Harald Hild, a portfolio manager at Quaesta Capital Optivest AG in Switzerland

I never know for certain whether money is an enemy or a friend

—Lewis Lapham

Money, which represents the prose of life, and which is hardly spoken of in parlors without an apology, is, in its effects and laws, as beautiful as roses.

—Ralph Waldo Emerson

Broadly speaking, the rate of annual decline in home price values continues to improve. The two Composites and 19 of the 20 metro areas showed an improvement in the annual rates of return, as seen through a moderation in their annual declines. Looking at the monthly data, 17 of the MSAs and both Composites saw price increases in August over July. While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figures. Once again, however, we do want to remind people of the upcoming expiration of the Federal First-Time Buyer’s Tax Credit in November and anticipated higher unemployment rates through year-end. Both may have a dampening effect on home prices.

—David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s

We’re nearing the bottom in home prices. Right now the government is helping to stabilize housing.

—Patrick Newport, an economist at IHS Global Insight

The residential housing market appears to have stabilized, but it has done so at a very low level

—William Foote, chief executive officer of USG Corp, October 21 conference call

While many are interpreting the most recent results from this index as indicative of a bottom in home prices, we do not believe this to be the case. Rather, this is probably a correction after unsustainable 2%-3% per month declines recorded over the autumn and winter months when the overall economy was in free-fall. Demand stimulated by the $8000 first-time homebuyer tax credit has also likely played an important role.

—Joshua Shapiro, MFR

A rapidly rising unemployment rate is creating problems for many formerly creditworthy homeowners. While much of the impact of the subprime disaster on prices at the bottom end of the market may well be behind us, there is likely plenty of pain yet to come further up the price spectrum

—Joshua Shapiro, MFR, quoted in NYT

Consumers’ assessment of present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment…Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays.

—Lynn Franco, director of the Conference Board Consumer Research Center.

So far, so good. There’s nothing negative in these numbers…[but]…Everything is up for grabs this winter.

—Maureen Maitland, vice president for index services at Standard & Poor’s

There is little doubt the housing market is improving. Prices are improving, the inventory picture continues to get better, and government support for the sector remains in place, for now.

—Dan Greenhaus, chief economic strategist for Miller Tabak

the sudden turn in the housing market probably reflects a new home-buyer emphasis on market timing. For years, people have been bulls for the long term. The change has been in their short-term thinking. The latest answers suggest that people think the price slide is over, so there is no longer such a good reason to wait to buy. And so they cause an upward blip in prices.

—Robert Shiller

it is good that authors should be remunerated; and the least exceptionable way of remunerating them is by a monopoly. Yet monopoly is an evil. For the sake of the good we must submit to the evil; but the evil ought not to last a day longer than is necessary for the purpose of securing the good.

—Lord Macaulay, 1841, in his remarks on the inconveniences of copyright…neither few nor small…copyright is a monopoly. He goes on to say, “the effect of monopoly generally is to make articles scarce, to make them dear, and to make them bad.”

The old fashioned novel is really dead, and nothing can revive it nor make anybody care for it again. What is to follow it?…A clever German who is here suggested to me last night that the literature of the future might turn out to be the daily exchange of ideas of men of genius—over the everlasting telephone of course—published every morning for the whole world….

—From a letter to Isabella Stewart Gardner from novelist F. Marion Crawford, August 23, 1896, found by Kristin Parker, archivist at the museum

I expect the Asian region including China to continue serving the role of growth engine for the world economy. For China’s market, there’s a possibility of a correction, but the long-term outlook is still bright…

Despite the fact that markets have risen well off their lows, I think we’re in a bull market I expect to go on. It’s a multiyear bull market. I don’t think it’s over yet.

The relative growth being seen in some emerging markets is going to look particularly attractive against the low growth in the West. I particularly like emerging markets that can be driven very much by domestic demand, by the internal dynamics of their economy.

—Anthony Bolton: via Bloomberg

Some of our competitors have 30 million unique users a month, and you would think that any business that has 30 million unique users would be the happiest in the world. But they’re not. They’re worried.

—Matt Kelly, Associate Editor of the Daily Mirror and mirror.co.uk