EDITORIAL
The Great Davos Echo Chamber
By Anthony Wile - January 24, 2015

We've been covering the Economic Forum in Davos from the standpoint of its "mood" … which is said to be distinctly downbeat this time around. But I want to comment on notable speeches being presented by various august personages.

First up is Bill Gates who according to Business Insider, "delivered another upbeat message on the world with his annual newsletter," at the "hustle of the Conference."

The report, written by Gates and his wife Melinda, who are co-chairs of the Bill & Melinda Gates Foundation, once again argued that the world is a better place than it has even been before, predicting that the next 15 years will see major breakthroughs. Such advancements will mean the lives of people in poor countries will improve faster over this period than at any other time in history, it said.

"These breakthroughs will be driven by innovation in technology – ranging from new vaccines and hardier crops to much cheaper smartphones and tablets – and by innovations that help deliver those things to more people," the report, released Thursday morning to coincide with the Davos event, said.

"It's great that more people in rich countries will be able to watch movies on super hi-resolution screens. It's even better that more parents in poor countries will know their children aren't going to die."

The benefits of mobile banking led many of the headlines when it came to Gates's statements, and Business Insider expanded …

"By 2030, 2 billion people who don't have a bank account today will be storing money and making payment with their phones. And by then, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit to insurance," the report said.

Next up, billionaire Greene who garnered a lot of media attention for his talk "bemoaning jobs" in the US. Here from Bloomberg:

Billionaire Jeff Greene, who amassed a multibillion dollar fortune investing in real estate and betting against subprime mortgage securities, says the U.S. faces a jobs crisis that will cause social unrest and radical politics.

"America's lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence," Greene said in an interview today at the World Economic Forum in Davos, Switzerland. "We need to reinvent our whole system of life."

The 60-year-old founder of Palm Beach, Florida-based Florida Sunshine Investments said his biggest fund was up more than 20 percent last year with bets on Apple Inc. (AAPL), Google Inc. (GOOGL), bank stocks and mortgage-backed securities.

"I'm remarkably long for my level of pessimism," he said. "Our economy is in deep trouble. We need to be honest with ourselves. We've had a realistic level of job destruction, and those jobs aren't coming back."

Greene, who flew his wife, children and two nannies on a private jet plane to Davos for the week, said he's planning a conference in Palm Beach, Florida, at the Tideline Hotel called "Closing the Gap." The event, which he said is scheduled for December, will feature speakers such as economist Nouriel Roubini.

Greene's lavish lifestyle came in for a good deal of negative comment in the alternative media, given the grimness of his presentation and "belt-tightening" message.

The Russians came in for some bashing by the current president of the Ukraine. Petro Poroshenko "painted a picture of his nation being more united than ever before,' but facing terrorist threats just like the rest of the world," according to Deutsche Welle:

Poroshenko drew a connection between a recent attack on a bus in Ukraine near Volnovakha that killed 12 people, the downing of Malaysia Airlines Flight 17 (crashed, likely shot down, in Ukraine last summer), and the attacks in Paris against the offices of satire magazine Charlie Hebdo, saying they were all acts of terror that required global solidarity to fight.

Poroshenko was due to head from Davos to Berlin for four-way talks with Russia, France and Germany. In front of his audience in Davos, Poroshenko held up piece of charred metal that he said was a piece of the bus fired upon in Volnovakha. He placed the blame for that attack on Russia.

Furthermore, Poroshenko said there were over 9,000 Russian troops currently in Ukraine along with 500 armed vehicles and tanks. "If this is not aggression, what is?" Poroshenko asked the crowd assembled in Davos.

Then there was Emma Watson. Time magazine informs us, "Emma Watson Launches New Anti-Sexism Initiative at Davos."

We had to read the headline twice because Ms. Watson has launched her initiative several times to our knowledge. Later on, the article admits it, stating: "Watson first became involved with UN Women last summer and in the fall of 2014 announced the HeForShe campaign in a moving speech that received world-wide attention."

Repetition doesn't seem to dim the excitement, however. Her talk was apparently well received at Davos:

Harry Potter star and UN Women Global Goodwill Ambassador Emma Watson was on hand at the World Economic Forum in Davos on Friday, where UN Women — the United Nations entity dedicated to gender equality and women's empowerment — unveiled the HeForShe IMPACT 10X10X10 pilot initiative.

The new initiative was announced at a press conference attended by UN Secretary-General Ban Ki-moon, several world leaders and Watson. They outlined the HeForShe IMPACT 10X10X10 program, which will be a one-year pilot project geared toward advancing women by working with governments, companies and universities in order to promote change within their respective communities.

"The groundswell of response we have received in support for HeForShe tells us we are tapping into what the world wants: to be a part of change," Watson said at the press conference. "Now we have to channel that energy into purposeful action. The pilot initiative provides that framework. Next we need all country leadership, as well as that of hundreds of universities and corporations to follow HeForShe's IMPACT 10x10x10 so as to bring an end to the persisting inequalities faced by women and girls globally."

Inequality of all kinds – not just gender inequality – is at top of the agenda, according to Pew Research. The polling facility posted this analysis:

A new report from the anti-poverty group Oxfam has helped put inequality back near the top of the global agenda, just in time for the World Economic Forum's annual gathering of global elites in Davos, Switzerland. In particular, one striking claim from the Oxfam report has generated headlines: By next year, the top 1% of the world's population could own more wealth than the other 99%. The Oxfam report – just one of many attempts at measuring worldwide economic disparities – fits into a broader pattern of growing interest in, and concern about, inequality.

Broad Majorities See Inequality as a Problem. It's certainly a topic on the minds of average citizens around the world. In a spring 2014 Pew Research Center survey, majorities in all 44 nations polled described the gap between rich and poor as a big problem for their country, and majorities in 28 nations said it was a very big problem. Concerns about inequality are most common in Africa, although they are widespread in wealthier parts of the world as well, especially in European nations such as Greece (84% very big problem), Spain (74%) and Italy (73%) that were hit hard by the Great Recession.

Inequality is also a high-profile topic in the U.S., where President Obama called for higher taxes on the rich in his State of the Union address. Americans across the ideological spectrum see it as a big problem, including majorities of Democrats (89%), independents (77%) and Republicans (60%) in the spring 2014 poll. However, the view that inequality is a very big problem is much more common among Democrats (59%) and independents (49%) than among Republicans (19%), and there is a big partisan divide over how the issue should be addressed.

Globally, the elites are worried about this issue, too. Pope Francis, the French economist Thomas Piketty, and others have stirred up the global debate on economic fairness over the last year.

Anyone who reads The Daily Bell will find all the above reporting predictable. For me it is at least a little shocking nonetheless. The obviousness is almost grimace-inducing.

Gates, for instance, wants to talk about the inevitable move to a cashless society but neglects to inform people that Kenya's Safari.com – the country's biggest vendor of electronic money – is British owned and operated. The Brits, in other words, are at least to some degree behind this "movement."

Greene wants to lecture people on the necessity of lowering expectations regarding living standards while jetting around the world and trying to sell an apartment for nearly US$200 million.

Emma Watson announces – re-announces – her gender equality campaign even though her success, in fact, must surely outweigh any gender discrimination she may have faced. Nonetheless, she has made this her issue.

Finally, the dominant social theme of economic inequality has been flogged relentlessly this past year, and as Pew explains, it came in for a reprise at Davos.

Ironically, several of the aforementioned problems are caused by the same socio-political elements that underwrite Davos. These problems are in a sense being perpetuated so that the appropriate solutions may be presented.

The solutions, of course, inevitably feature bureaucratic nostrums – the larger the better. In fact, many of the promotions now being presented at Davos are worldwide in nature – that is, they demand a global response. Presumably the ongoing legalization of drugs and its subsequent reregulation will be globally implemented as well.

I should add that I don't want to belittle the problems being presented at Davos, for there are certainly credible issues involved. But from where I'm sitting, Davos is mostly an exercise in justifying increased global activism by all sorts of international players, many of them acting in official and public capacities.

As someone who generally doesn't believe in mercantilist enterprises that use state force to implement private agendas, the spectacle makes me uneasy. There are public problems to be sure. But the solutions ought to be private whenever possible.

Public solutions, in fact, tend to make already intractable problems even worse. And thus the solutions being presented here are recipe for yet more polarization and violence.

Ideas have consequences. The ideas being offered (generally anyway) at Davos may have a negative, even ruinous impact on your family, your security and certainly your pocketbook. We see the signs. This history is likely doomed to repeat.

Posted in EDITORIAL
loading