Eliot Spitzer wrote recently about how sur­prised he was to read that Richard Posner no longer believes that free mar­kets are capa­ble or com­pe­tent to deter­mine CEO salaries and mutual-​fund fees:

Posner con­cluded that while judges shouldn’t directly review cor­po­rate salaries, evi­dence of unrea­son­able com­pen­sa­tion could be evi­dence of a breach of fidu­ciary duty. Yes, these are legal words, but they reveal a remark­able conclusion—courts should take a hard look at private-​compensation issues—and demon­strate how far, and rapidly, the world has shifted. The two issues Judge Posner examined—setting CEO com­pen­sa­tion at major com­pa­nies and deter­min­ing the fees to be paid to mutual fund-​management com­pa­nies on the base of tril­lions of dol­lars of mutual-​fund investments—are cen­tral to the gov­er­nance of our finan­cial system. It is remark­able that a leader in Chicago School thought would acknowl­edge that the market is so broken that it can’t be prop­erly trusted on those two crit­i­cal issues. Yet that is exactly what Judge Posner has concluded.

What Spitzer doesn’t tell you is how much better it gets.

From “Spitzer, Linked to a Sex Ring as a Client, Gives an Apology,” New York Times, A18:

By 10:30 on Monday morn­ing, it was clear in Albany that some­thing was wrong. Mr. Spitzer’s office abruptly can­celed a speech to a family plan­ning con­fer­ence, about a half-​hour before he was sched­uled to ascend the podium.