For the last several years, the World Economic Forum (WEF) has published an annual report on global risk, as part of the run-up to the storied annual meeting in Davos. The 50-page report makes for gloomy reading: it is a dense collection of some of the major threats to the world’s security — from asset price collapse to weapons of mass destruction — and the interconnections between them. And they’re all carefully mapped in terms of their perceived likelihood and perceived economic impact.

You’ve got hand it to WEF: their report is thorough and sobering, and makes a great reference tool for later in the year. Last year’s report said that “there is a rising risk of sovereign defaults,” and that proved more accurate and expensive than anyone wished.

Yet for all its insistence on a big-picture, global perspective, the WEF risk report can seem internally contradictory or just hollow, as if pieces of cloth were produced in separate quarters with no one sewing them into a coherent quilt. And so, for those who want the big picture to be even bigger, here are three-and-a-half major questions raised, but not answered by the WEF risk report.

Why do global institutions break down? The WEF is very worried about the failure of “global governance.” This is unsurprising, since the WEF is very similar in outlook to other global-reach institutions, like the IMF, World Bank, United Nations, etc. The report finds “a growing sense of paralysis in responding to global challenges,” and cites as examples ineffective UN climate change negotiations; the stalled Doha round of trade talks; lack of progress on some UN Millennium Development goals; the ineffectiveness of Security Council reform and moves to curb nuclear proliferation.

Yet the WEF is much less clear about what is causing these institutions to fail. It is temperamentally prone to blame individual nations, and in some instances (such as nuclear proliferation), that may well be appropriate. But what about trade and currency policy? The report acknowledges that enforced economic globalization in emerging markets might harm employment and “potentially threaten social stability.” Why, then, should emerging nations want to inflict political and economic damage on themselves that their more enlightened developed brethren would never accept? Another way of saying this: maybe global governance isn’t working because the cures global institutions offer (and sometimes enforce) are often worse than the disease.

How can they be fixed? (Half question.) Reading the report, you get the strong sense of a circular argument along these lines: “My tools are broken. How will I fix them? I will use my tools!” About as close as the WEF gets to a solution for broken global governance is “a well-informed and well-mobilized public opinion sharing norms and values of global citizenship.” Yes, well … good luck with that.

Where does inequality come from? This year’s report makes a big deal about “economic disparity,” which it helpfully defines as “wealth and income disparities, both within countries and between countries.” We used to call this “inequality.” The WEF report rightly points to OECD data indicating real income growth of the top income quintiles in wealthy countries (Finland, Sweden, the United Kingdom, Germany, Italy and the United States) was twice as large as that of the bottom quintiles between the mid-1980s to mid-2000s. The poor may not be getting poorer, but the rich are getting richer at a much faster pace than everyone else. That situation is not only immoral, but dangerous, as it can lead to open conflict between nations and internal political turmoil.

For all the doom and gloom associated with the broader economy—historic unemployment in the United States, debt woes and mandated austerity in Europe—it’s been a remarkably positive year for the stock market. As we enter the last week of 2010, the S&P 500 index is up nearly 13 percent for the year. That’s far from a record (1954 witnessed a breakneck 45 percent rise), but at least the index this year climbed above the level hit before Lehman Brothers declared bankruptcy in September, 2008. The stock comeback story is not unique to America, either; this week, Korea’s stocks hit their highest level in more than three years.

At one time, the gurgling stock market would have been a fairly reliable predictor for a healthy economy in the near future—and who knows, that may still be the case. More bearish observers point to artificial stimulants, like an unsustainable commodity bubble and the Fed’s quantitative easing policy.

Regardless, a lot of equity holders will be popping Champagne (or prosecco) this week. Our chart below shows the top ten performers in the S&P 500 for the year—so what does it tell us? Well, the best-performing stock of the year is Cummins Inc., an Indiana-based company that makes power generators and diesel engines. Not surprisingly, its strong market performance this year is based on healthy sales abroad, particularly in emerging markets enjoying the rise in commodity prices. Another top performer has been AIG, the once-mighty insurer which lost nearly all of its value in 2009 but has made a strong comeback thanks to a massive taxpayer bailout. Two other financial firms that also flirted with the abyss made the top ten.

Looking at much of the rest of the list, you’d be forgiven for thinking we are living through a second dot-com boom. It includes Web-accelerator Akamai, veteran travel site priceline.com, enterprise software firm salesforce.com, and telecom service provider Qwest Communications. One Web star that didn’t make the list is Netflix, which is up an astonishing 233 percent this year. If Netflix can sustain growth like that in 2011, it will likely make the chart next year, because this month it was added to the S&P 500.

Perhaps it was inevitable. In the hundreds of thousands of secret diplomatic cables revealed by the WikiLeaks Web site this month, a previously overlooked cache deal specifically with U.S. surveillance of a land almost as secretive as North Korea: the North Pole or simply, as it is known in State Department communiqués, NP. The following are excerpts, obtained exclusively by Reuters, of cable traffic concerning the North Pole. While we recognize that making such messages public runs the risk of harming delicate diplomatic relations with the North Pole, we believe that substantial public interest in North Pole activities justifies their publication. Where necessary, Reuters has redacted details that might inadvertently reveal the sources and methods used to gather information.

7/20/08: “Details of NP economic base remain sketchy: no estimates of GDP; exports believed substantially higher than imports, suggests Chinese-style currency manipulation. Dictator-style government structure: unelected ruling family led by strongman CLAUS, peasant-worker class, no active political parties. Economic sources have called into question NP productivity, noting minimal transportation activity—measured in sleigh miles per 1000 citizens—for most of the year. Regular late-year surges are presumably designed to meet annual or five-year-plan quotas.”

11/30/08: “Questions surfacing about NP information dynamics. Data mining of U.S. Postal Service records indicates large number of letters entering NP region every year, concentrated at year-end. Yet few if any NP letters enter the U.S.; no direct mail; no business-to-business correspondence. Fits smuggling pattern; need to cross-reference with export/import figures, which seem to move in opposite direction.”

3/2/09: “Interview with NP defector indicates idiosyncratic livestock usage. Unlike most Scandinavian countries, NP reindeer not cultivated for consumption but as part of labor force. Defector indicates division in reindeer ranks, some invited to ‘join in reindeer games,’ presumably membership in party close to ruling family. Seeking contacts among dissenting reindeer.”

7/2/09: “New confidential source [REDACTED] divulging large-scale NP data acquisition project. Huge databases being amassed, records kept on millions of Americans, physically entered into computer files, codenamed NAUT/NICE. Privacy implications rival Chinese Internet abuse. Requesting CIA assistance for satellite surveillance.”

12/1/09: “TOP SECRET. [Confidential Department agent] has made initial contact with man identifying himself as CLAUS. Physical description matches file records: large build; white hair; bushy beard; jolly in demeanor. Claims he can explain methodology of NAUT/NICE database. Developing.”

By James Ledbetter

You hear a lot these days about how much businesses dislike “uncertainty.” It’s too hard, goes the refrain, to figure out how financial reform is going to play out, or how much heath care reform is going to cost. Better to play it safe and not hire anyone.

But at least today’s businesses are reasonably assured of a stable calendar. During the latter years of Franklin Roosevelt’s administration, this was not the case.  In August of 1939, President Roosevelt was taking a brief summer fishing trip on Campobello Island in New Brunswick, Canada, just over the border from southeastern Maine.  A handful of journalists were gathered in the living room of the red cottage that had belonged to the president’s mother. After some discussion of the tensions in Europe—this was August 14, less than three weeks before the German invasion of Poland—FDR said to the newsmen: “Oh! I will give you a story I had entirely forgotten. I have been having from a great many people, for the last six years, complaints that Thanksgiving Day came too close to Christmas. Now this sounds silly.” But the president went on to explain that the tradition that had begun with Abraham Lincoln of annually celebrating Thanksgiving on the last Thursday in November created a time window between Labor Day and Thanksgiving that was too long without a holiday, and a time window between Thanksgiving and Christmas that was too short.

The first issue the President had already fixed, by making Columbus Day a national holiday in 1937. To address the second one, he would simply move Thanksgiving to an earlier date. “The stores and people who work, retail people, etc. are very anxious to have [Thanksgiving] set forward,” he explained. And 1939 provided an ideal opportunity for shifting what FDR labeled “a perfectly movable feast.” There were five Thursdays in November that year, and so moving Thanksgiving from the 30th to the 23rd would make it not much earlier than it had been the previous year (the 24th), and yet give the retailers the extra week between Thanksgiving and Christmas they were clamoring for.

In keeping with the light, summer mood, there was only one question from the press: “This year, Mr. President?” The answer was quick: “This year, yes,” and then the President went back to arguing that there is “nothing sacred about” the date of the celebration, noting that “in the early days of the Republic, it was held sometime in October.”

The seeming spontaneity of the announcement belied the fact that the remarks had been scripted for FDR a week before. One of his aides, Lowell Mellett, a former Scripps-Howard newsman who would go on to head the movie division of the Office of War Information, had in fact provided the President with different versions of how he might present his plan to the public.  Moreover, as FDR indicated in his press conference, the issue had come up before. In 1933 and 1934, November also had five Thursdays, and a diverse group of merchants had conducted a public campaign to have the date changed; the most prominent push had come from the National Retail Dry Goods Association. But the administration was far too busy trying to implement the National Industrial Recovery Act, and rebuffed requests to change the date.

By James Ledbetter

During his presidency, George W. Bush was not known as an overly reflective man, or as someone with a powerful thirst for economic knowledge (despite being the only president with a Harvard MBA). It is thus unsurprising that his memoir is not overly reflective about the causes of the financial meltdown that closed out his presidency, nor even very generous with details about what it was like to preside over. Anyone who opens his new memoir, “Decision Points,” intent on unearthing Bush’s heretofore buried financial insights will be disappointed.

Still, there is some value in glimpsing how Bush perceives the crisis, in part because his economic perspective is so widely shared in the newly resurgent Republican Party. In the chapter devoted to the financial crisis, Bush paints an economic picture using almost exclusively his favorite primary color: tax cuts. Tax cuts, in his view, got America out of the recession that began shortly after he took office. Tax cuts provided another critical boost in 2007. Tax cuts are beautiful because they take money out of the government’s hands and place it into citizens’ hands; that is all Bush knows, and all he thinks he needs to know, about the economy.

Just about everything else can be delegated, which is to say ignored until it explodes. As he recounts the reasons why the financial system fell apart — the complexity of Wall Street’s mechanics, the booming housing market, overleveraging — he says the system was “fated to collapse,” but admits that he didn’t see it at the time. (In another section, he claims he did see the problem of overleveraging at Fannie Mae and Freddie Mac, but that his reform efforts were blocked by Democrats.) His curiosity did not increase very quickly; Bush professes to have been “surprised by the sudden crisis” when Bear Stearns was sold at a forced bargain price in March 2008. He clearly had no idea what caused the problems at American International Group in September of that year.

More telling is his admission that when Federal Reserve Chairman Ben Bernanke told him the crisis could be the worst since the Great Depression his reaction was that he would rather be Franklin D. Roosevelt than Herbert C. Hoover. Yet his refusal to even consider that his administration’s, or the Fed’s, policies might have contributed to the crisis is distinctly Hooverian. About as close as Bush gets to anything approaching taking responsibility is an admission that “my administration and the regulators underestimated the extent of the risks taken by Wall Street.”

As for the height of the crisis, Bush is hardly the first official to say that government intervention — including the Troubled Asset Relief Program, the rescue of Bear Stearns and bailouts of Fannie Mae, Freddie Mac and AIG — offends his free market sensibility, but had to be done to prevent bigger disasters. Indeed it is striking, and perhaps a boon, that the former president who writes so repeatedly and weightily about the need to stand up for principles in places like Iraq and Afghanistan could so willingly toss them aside when it came to financial rescue. This only reinforces, however, the impression the book conveys that Bush has few economic principles aside from the belief in lower taxes.

There is one other section of the memoir with economic implications, in which Bush discusses his failed attempt to reform Social Security. It may surprise some that he calls this “one of the greatest disappointments of my presidency.” Bush deserves credit for calling attention to the looming insolvency of this entitlement program, as well as the unequal ways that it is administered. Yet he seems unwilling to accept that the bipartisan rejection of his plan stemmed not merely from political pandering — there was plenty of that — but from the fact that his proposed cure was quite possibly worse than the disease.

The debut of Conan on TBS won its time slot against more established late-night comedy shows. But can the former Tonight Show host keep up the momentum? Reuters is keeping daily track of how O’Brien performs against his rivals; tune in every day for an update.

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Felix Salmon has written extensively about the ongoing mortgage crisis, from the problems with mortgage bonds to the impact of foreclosures on bank stocks. Here is a new video in which Felix offers a potential solution, in the form of principal reduction.

Posted by James Ledbetter.

Here’s a video of Reuters correspondent Mark Hosenball giving an overview of his investigation into why Republican donors are shunning Delaware Senate nominee Christine O’Donnell.