It's easy to save the world when you've already taken care of yourself. But, we rely on these mavericks -- the wealthy who realize they can make a difference -- to do what we cannot on our own. So, it comes as a relief that Bill Gates, founder of Microsoft (MSFT) believes executive compensation is still too high.

It's a murky topic, and some forms of regulation, Gates believes, won't help. In a discussion on philanthropy at the 92nd Street Y in Manhattan, where many of the people Gates criticized send their kids for early education, the former CEO and still rich guy cites the $1 million executive salary cap required by law in 1993 as a big mistake. While compensation has to be controlled, he believes this measure backfired and thinks that other, similar efforts are doomed to fail now.

On Thursday morning, European Union regulators announced the launch of an antitrust probe into U.S. software maker Oracle's (NASDAQ: ORCL) takeover of Sun Microsystems. The regulatory group believes that the deal could lead to higher prices and limited choice for database software. Approval from this group is considered the main stumbling block for the deal, which has cleared the Department of Justice in the United States.

The final decision has a deadline of 90 days, or January 19, 2009. By this date, the European Commission can decide to clear or to block the deal. More often than not, the Commission will force companies to make changes that would eliminate any concerns over antitrust regulations.

Beige book weakness, nationwide. Holiday retail sales tepid at best (so far). Business investment lackluster. And Friday yet another employment situation report from the good statisticians at the U.S. Department of Labor. Consensus: the U.S. economy probably shed another 300,000 jobs in November.

A decade of descent

One can't say we weren't warned about the recession that we're now in - - not with the increased concentration of wealth and concomitant increase in poverty, lack of job creation, and wage stagnation that accompanied the recent economic expansion, to go along with excessive leverage, system-wide.

New York Times (NYSE: NYT) columnist and Nobel Prize-winning economist Paul Krugman provides a little perspective on how we got here and also offers some hope, regarding these trying economic times.

On the signals, or signs, some in economics, corporate, and public policy circles are suggesting that we didn't have any signs of economic trouble ahead. "Why weren't we warned?"

Ah, but you were warned, Krugman said. And these warnings were ignored. Item: Clear signs of a housing bubble, after the dot-com bubble a decade earlier. Item: The implosion, and required dissolving of Long Term Capital Management in 1998 - - just one hedge fund, but one that nevertheless temporarily paralyzed credit markets, globally. Item: The near-universal belief in the market's ability to self-correct, self-police, and if need be, self-punish transgressors, when there was little case precedent to hold that mistaken notion. In sum, there were plenty of warnings, Krugman argues.

During the recent testimony by Fed Chairman Ben Bernanke, Treasury Secretary Hank Paulson and SEC Chairman Christopher Cox, it has become increasingly clear that the Federal Reserve will be forced at least in the near term to extend a financial lifeline to any and all U.S. financial entities that are too big to fail. This refers to entities whose failure cold endanger the U.S. economy and in some cases the global financial markets.

I have learned during my investment career to watch what the Fed does much more than what it says. This has been demonstrated by Chairman Bernanke's extension of the discount window to Fannie Mae and Freddie Mac in recent days despite initial indications by Secretary Paulson to the contrary. Hawkish talk remains just that, not action.

The discount window was initially intended only for regulated banks to prevent a meltdown of the financial system from bank failures. In return for this financial insurance, banks are regulated, including the charging of fees. One can debate the alternatives to such an arrangement. However, this regulatory framework will probably be with us for the foreseeable future.

German Chancellor Angela Merkel said continental Europe should take the lead in financial market reform because the "Anglo-Saxon" model of regulation had failed, The Financial Times reported Wednesday.

Merkel, speaking before her meeting with U.S. President Bush and ahead of next month's G-8 leading industrialized nations economic summit, called for a European credit ratings agency to counter-balance Moody's and Standard & Poor's (NYSE: MHP), adding that despite the progress Europe has made with the euro, the financial regulatory framework is still "a strongly Anglo-Saxon dominated system."

Reforms sought by Berlin will include a ban on agency ratings for products they helped to create, new capital adequacy ratios for banks, and the prevention of bank sale of products they don't understand.

London-based economist Mark Chandler told BloggingStocks Wednesday he agrees with Merkel on the need for both financial market reform and a Europe-based counterweight to complement the largely U.S.-based regulatory framework, but is slightly surprised by Merkel's rhetoric.

Former Fed Chairman Paul Volcker gave testimony today before a Joint Economic Committee of Congress. He addressed the current financial and economic environment and the role of the Federal Reserve.

He discussed how the financial market environment has changed considerably since his tenure as Fed Chairman in the early and mid 1980's. He pointed out that financial institutions like investment banks and hedge funds, whose failure can have tremendous effects on the financial system, are lightly regulated. "Systemically important investment-banking institutions should be regulated and supervised" in a similar manner to commercial banks.

Chairman Volcker stressed the need to update the entire regulatory framework, saying "It's not simply a matter of inexperience or technical failures." He also discussed the need to update regulations on a global basis because of the increasing coordination between world central banks.

In March of this year, the office of New York Attorney General Andrew M. Cuomo entered into investigation of questionable practices involving institutions of higher learning and possible manipulations of lists of student loan issuers. The claim is that several well known schools and others are allegedly taking "incentives" from lenders for providing them preferential treatment.

Ellen Frishberg, director of student financial services at Johns Hopkins University, indicated that in her opinion the investigations of lender listing practices are something akin to a witch hunt. She maintained that some schools might be unfairly targeted for investigation by virtue of having put the work into screening to create lists of quality lenders. Frishberg made clear that Hopkins has indeed received solicitations for preferred list placement, which reveals the truth of the problem, but said that Hopkins turns a deaf ear to enticements of this kind.

In an article from The Baltimore Sun she stated, "We have ethics here." Since the time Ms. Frishberg issued that statement, she has resigned from her position with the university after investigation concluded she received some $67,000 in assorted grants and payments from companies she had coincidentally chosen to endorse. So much for ethics.

Well, it looks like the UK's Financial Services Authority is not a fan of private equity. The government agency is concerned that a mega deal will inevitably implode – leaving governments with the tab. Another concern: private equity transactions often lead to layoffs.

As a result, expect more scrutiny from the UK.

This is certainly big news for US private equity players. After all, it is getting tougher to find good deals here. So, why not move overseas? In fact, Europe is certainly ripe for restructuring.

But David Bonderman, who heads the Texas Pacific Group, is not happy about the UK's stance. While he admits there could be problems – it is still not inevitable. He also complained that private equity is being "demonized."

OK, maybe it is. But, Mr. Bonderman is making huge amounts of money from his deals. So, can't he take some criticism? Might it be possible that private equity firms are doing bad deals?

Actually, as private equity firms grow in size, there is a need to get more politically savvy – especially in light of the Dems sweep of the Congress. There is also an investigation – by the Justice Department – of possible antitrust violations of private equity firms.

No doubt, Bonderman is brilliant when it comes to structuring deals. But he definitely needs to get some better coaching when it comes to dealing with US and foreign governments.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Financial Statements.

"I think eBay is great!" one Louisiana state senator told the New York Times. Another smiled broadly while voting for Louisiana Senate Bill 642, which exempted eBay and other internet businesses from law requiring licenses for auctioneers. It's just one indication of eBay's powerful lobbyists, working hard from California to Baton Rouge to make sure its sellers don't have to follow rules meant for pawn brokers, ticket scalpers and auction houses (despite its description of its services as "auctions").

The company, protecting its $500 million in quarterly listing fees, is acting in what the Times calls a "savvy, resourceful," "remarkably successful," "grass roots" and "not shy" manner to stop adverse legislation. Interestingly, the company uses email missives much like the one Meg Whitman sent on Friday, but on a more localized level, to engage its users in the fight against restrictive legislation.

Still more intriguing is the company's stance on legislation meant to reduce fraud on its site; according to the Times, eBay opposes anti-fraud regulations as the company "sees its online community as self-regulating."