Barry Ritholtz is skeptical of predictions of a big resurgence in retail sales:

What is the bottom line? We have been adding jobs this year versus the last two years, and we should see some modest improvement in holiday sales. Easy comparables, better weather (plus inflation) suggest an improvement in retail sales versus 2010, consistent with the first 10 months of the year.

Go to the link for the details.

If my favorite metric, the mall parking lot-o-meter, is any gauge, this is the slowest holiday season in my memory. I don’t every recall ever seeing such empty shopping malls at this time of year. Maybe it’s difference elsewhere in the country that it is around here. Maybe the shoppers will pour in later. Maybe the difference will be made up in online or catalogue sales.

And when did we know it? In a diatribe on the complete predictability of things deemed unpredictable, Barry Ritholtz enumerates a list of things that we have known, sometimes for thousands of years:

We’ve known for literally thousands of years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We’ve known for 1,900 years that that rampant inequality destroys societies.

We’ve known for thousands of years that debasing currencies leads to economic collapse.

We’ve known for hundreds of years that the failure to punish financial fraud destroys economies.

We’ve known for hundreds of years that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.

We’ve known for hundreds of years that trust is vital for a healthy economy.

We’ve also known that avarice is damaging (“sinful”) and that it’s intrinsic to human nature. Rather than producing a system in which its effects are limited we elect to assume that some people are immune.

Is the commentariat at Naked Capitalism notably Republican-leaning? That hasn’t been my impression. Interestingly, in this post in which the idea of a “Most Evil Person of the Year” contest is floated a heated debate ensues over whether the shoe-in candidate is President Obama or…President Obama, with dishonorable mentions for Eric Cantor, Mitch McConnell, Tim Geithner, and Jon Corzine.

I think that’s unutterably blinkered. I think that the president, Secretary of the Treasury, House majority leader, and Senate minority leader all have good intentions. Inept, partisan, ideological, perhaps. But evil?

None of them even compares with Nicholas Sarkozy or, more to the point, Silvio Berlusconi. And those are pale, pale indeed by comparison with the vile individuals who’ve killed hundreds or thousands of their own people to keep themselves in power: Moammar Gaddaffi, Bashar al-Assad, Robert Mugabe, Ali Khamenei just to name a few.

What word do you use to describe someone like Kim Jong-il (is there anyone like Kim Jong-il?) who have systematically impoverished and stunted their own countries? “Evil” seems so inadequate. What word describes Joseph Kony?

Mark this day down on your calendars. I agree with Matt Yglesias:

Chris Paul is in the one percent, but he’s also a kid from a working class background who’s spent his entire career being structurally underpaid and victimized by cartels. By contrast, even substantially lower-paid (and there’s lots of room to be both lower-paid than Chris Paul and very highly paid) folks working on Wall Street are making a living in an industry that’s systematically dependent on implicit and explicit government guarantees. Making a living as a patent troll is totally different from making a living as a genuine innovator. Dentists enriching themselves by blocking competition from independent dental hygenists and tooth whiteners aren’t the richest people around, but their income represents a healthy share of ill-gotten gains

After that, of course, he wanders off into the weeds. The key point here is that tax rates are blunt instruments. They don’t make distinctions like the ones that Matt is making above. Trying to jigger the tax code so that it does make such distinctions is a) more likely to benefit the “malefactors of great wealth” than it is the “people who are just paying higher tax rates because of the declining marginal utility of income” and b) creates an industry of people who i) try to influence the writing of the tax code to their benefit and ii) earn big incomes by giving advice on the ins and outs of the tax code. For all of these people the essential structure of the tax code is a matter of life and death. They will defend it with all their might (which is considerable).

While I’m on the subject of making distinctions get a load of Gallup’s findings on what Americans think about who’s rich:

Americans say they would need to earn a median of $150,000 a year to consider themselves rich. However, 30% say less than $100,000 would be enough, including 18% who would consider themselves rich if they made less than $60,000 a year. On the other hand, 15% say they would need to earn at least $1 million per year before thinking of themselves as rich.

or, said another way, the overwhelming preponderance of Americans a) define themselves as “not rich” whatever their incomes are and b) define anybody who makes more than they do as rich. By those standards nearly all physicians and dentists are rich, police officers are rich, plumbers are rich, lots of school teachers are rich. Populism doesn’t consist of taxing the .1% of income earners, those who are truly rich, earning incomes around $2 million a year. It consists of taxing the top three income quintiles more.

If that money were going to be distributed to the needy there might be a point to it. But it won’t. It will be redistributed among the top three income quintiles. That’s lunatic. And creates enough deadweight loss that it reduces the number of jobs that will be created. producing yet more dissatisfaction and envy.

I’ve just published a foreign policy-related post at Outside the Beltway:

How To Worry

The ever-considerate folks at the Council on Foreign Relations have come up with a handy list of things we should be worried about and how much we should be worried about them. The perfect gift for that special someone!

Randall Wray points out the difficulties and contradictions in measuring the scope of the bailout that the financial sector has received over the last four years:

Think about it this way. A half dozen drunken sailors are at the bar, and the bartender refills their shot glasses with whiskey each time a drink is taken. At any instant, the bar-keep has committed only six ounces of booze. That is a useful measure of whiskey outstanding. But it is not useful for telling us how much the drunks drank. Bernanke would like us to believe that if the Fed newly lent a trillion bucks every day for 3 years to all our drunken bankers that we should total that as only a trillion greenbacks committed. Yes, that provides some useful information but it does not really measure the necessary intervention by the Fed into financial markets to save Wall Street.

You can take snapshots, measure the commitments at any given point in time, and identify the highest level of commitment, you can sum up those commitments over some relatively brief period, or you can sum up those commitments over the entire period from 2007 to date. The Fed has inclined towards the first measure when reporting to Congress but that may not really tell the story. The total cumulative commitment was an eye-popping $29 trillion. Details of who, what, and where at the link.

Yves Smith notes the same thing I did yesterday about Jon Corzine’s Congressional testimony:

Now as regular readers know, CEOs morphing suddenly from Masters of the Universe to empty 42 longs who are clueless as far as operational details are concerned was supposed to go the way of the dodo bird with Sarbanes Oxley. Sarbanes Oxley requires key corporate executives, typically at least the CEO and CFO, to certify the adequacy of internal controls. For a financial firm, that has to include risk controls, which were the big point of failure in the crisis and with MF Global. And the beauty of Sarbox is the criminal provisions track the civil, so if a prosecutor were to prevail in a civil suit and thought it had enough dirt to pass the “reasonable doubt” threshold, it could file the related criminal suit.

Knowing violations of Sarbanes Oxley certifications are subject to up to five years in jail; willful violations, up to twenty years. To my knowledge, only one executive has faced charges under Sarbox: HealthSouth’s Robert Scrushy. He won that case, but as someone who followed it off and on in the Birmingham press, it is not a stretch to argue that Scrushy had a position in the Birmingham area that would make him more difficult to prosecute than most CEOs. And it it also pretty typical for it to take a while to perfect cases when using new legal arguments, so losing an early case or two is often part of the learning process.

So a “know nothing” argument would not only be useless in defending against Sarbox charges, it might actually be damaging (“How can you say you know nothing about operations yet sign that certification?”). Note that for financial statements, the usual approach is to shed liability by relying on auditors. But there are no comparable players in the risk modeling/control world. The banks are typically on the bleeding edge in some areas, which often include very profitable new strategies, which works against third party validation.

I can’t help but wonder if while reducing the likelihood of fraud indictments Mr. Corzine’s testimony has increased the likelihood of indictment for Sarbox violations. As noted in comments yesterday something depends on how much grace those in Congress and the Justice Department are inclined to grant a former senator.

When reading Washington Post columnist Eugene Robinson’s take on the unseemly Republican “candidates’” “debate” “moderated” (I’m starting to run out of quotation marks) by Donald Trump:

Romney, Ron Paul, Rick Perry, Jon Huntsman and Michele Bachmann have had the dignity and good judgment to decline participation in what is likely to be an embarrassment for all involved, except Trump, who lives in a world beyond shame. Paul’s campaign noted that the planned event would create an “unwanted, circus-like atmosphere” that is “beneath the office of the presidency.”

Gingrich, apparently lacking dignity and good judgment, will eagerly participate. He will be joined by Rick Santorum, who, let’s face it, has nothing to lose.

So, if the event comes off at all, its attendance is likely to be limited to Newt Gingrich and Rick Santorum.

I could only think of Hunter S. Thompson’s wisecrack “When the going gets weird, the weird turn pro”.

Now to be honest I think that some of the Republicans’ problem is that they have a very unfriendly press. The Democratic Party has no dearth of weirdos. The difference, apparently, is that rather than keeping their crazy relatives in the attic the Republicans put ’em out on the front porch.

However, I read a disquieting statistic the other day: 60% of Republican primary voters are evangelicals. The problem with that, politically, is that only about a quarter of Americans are evangelicals. For good or ill evangelicals do not represent the American mainstream. However, as is the case with many groups with high regional concentration, since everybody they know is an evangelical Christian, they think that they comprise a majority.

My childhood can be divided into two periods. Until I was eight or nine our breakfast diet was pretty typical for kids of the time. The heavily sweetened cereals of today hadn’t been introduced yet. The pre-sweetened cereals were pretty much limited to the newly introduced Sugar Corn Pops, Sugar Smacks, and Sugar Frosted Flakes and their spokesmen were Wild Bill Hickok (as rather unconvincingly portrayed by Guy Madison), Cliffie the Clown, and Tony the Tiger. The selection of breakfast cereals was mostly oatmeal, Hot Ralston, shredded wheat, Grape-Nuts, and the three pre-sweetened cereals mentioned above.

Then my mother discovered Adelle Davis and our lives would never be the same. You could distinguish between the two periods as BAD (before Adelle Davis) and AAD (after Adelle Davis). If she’s before your time, Adelle Davis was a nutrionist and advocate who wrote several best-selling cookbooks, was a nutritionist to the stars in the 1940s, and advocated eliminating additives and sugar from food and using whole grains and fresh fruits and vegetables.

Gone were the BAD white bread, pre-sweetened cereals, and salt. AAD we ate Roman Meal (a mixture of whole wheat and flax seed), steel cut oats, whole grain bread, wheat bran, and Tiger Milk. Tiger Milk was a concoction of skim milk, bran, brewer’s yeast, blackstrap molasses, and I don’t recall what all else. When Adelle Davis prescribed Tiger Milk to W. C. Fields, he proclaimed it “excellent with gin”.

Skippy or Peter Pan peanut butter were replaced by the fresh ground, rather gritty but transfat-free stuff we searched out at healthfood stores.

With a childhood like that and not having children of my own you can see why complaints like this of nutritionally empty breakfast foods targeted at children are foreign to me. Doesn’t everybody eat a mixture of cut wheat and flax seed with blackstrap molasses for breakfast?