Category Archives: World Economic Forum

Everyone Seems to Agree That Globalisation Is a Sin

Fareed Zakaria writes for The Washington Post:

Image result for Everyone Seems to Agree Globalisation Is a SinThe World Economic Forum this year feels like an exercise in ritual self-flagellation, which — as with the old Christian practice of fasting and whipping one’s own body — is supposed to purify the sinful nature of man. The sin, of course, is globalization, which everyone now seems to agree has been lopsided, inequitable and dangerous. In fact, most of the flaws attributed to globalization are actually mistakes in national policy that can be corrected.

It took a Chinese billionaire to speak frankly on this topic. Jack Ma, the founder of the e-commerce giant Alibaba, estimated that over the past three decades the U.S. government spent $14.2 trillion fighting 13 wars. That money could have been invested in America, building infrastructure and creating jobs. “You’re supposed to spend money on your own people,” he said. He pointed out that globalization produced massive profits for the U.S. economy but much of that money ended up on Wall Street. “And what happened? Year 2008. The financial crisis wiped out $19.2 trillion [in the] U.S.A. alone. . . . What if the money [had been] spent on the Midwest of the United States developing the industry there?” he asked. “It’s not [that] the other countries steal jobs from you guys — it is your strategy,” he concluded.

You don’t have to accept Ma’s specifics and statistics to recognize the validity of his general point. Globalization created huge opportunities for growth, many of which were taken by U.S. companies. The global economy is still dominated by large American firms; 134 of Fortune’s Global 500 are American. And if you look at those in cutting-edge industries, the vast majority are American. These companies have benefited enormously by having global supply chains that can source goods and services around the world, either to lower labor costs or to be close to the markets in which they sell. Since 95 percent of the world’s potential consumers live outside the United States, finding ways to sell to them will have to be a core strategy for growth, even for a country with a large domestic economy such as the United States.

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Joe Biden to Davos: The Top 1% Must Pay Its Fair Share or Else…

Jay Yarow reports for CNBC:

Image result for Joe Biden to DavosIn his final speech as vice president, Joe Biden warned that the top 1 percent needed to pay their fair share, or else.

Biden delivered his speech at the World Economic Forum in Davos Switzerland, which is attended by world leaders, top executives, investors and members of the press.

The outgoing vice president started his speech by noting that there is a “palpable sense of uncertainty about the state of the world,” and we need to ask ourselves, “What kind of world are we going to leave for our children?”

The main theme of his speech was that the “liberal international world order” is at risk of collapse, as bad actors like Russia meddle in elections and try to undermine the progressive values of the United States and Europe.

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Davos Elite Seeks Fixes to Defend the System From Populists

Jeff Black and John Follain report for Bloomberg:

Image result for Davos Elite Seeks Fixes to Defend the System From PopulistsThe great and the good of Davos agree they have a problem with populism. Finding a solution is the hard part.

On the second day of the World Economic Forum’s annual meeting in the Swiss Alps, delegates disagreed on how best to address the upending of the western political order, a debate made doubly urgent by the string of elections in Europe this year where anti-establishment parties could gain more ground.

While International Monetary Fund chief Christine Lagarde urged a list of policies from programs to retrain workers to more social spending, others fretted that the turbulence is only starting. Hedge Fund billionaire Ray Dalio warned on a panel chaired by Bloomberg Television’s Francine Lacqua that “we may be at a point where globalization is ending, and provincialization and nationalization is taking hold.”

That leaves technocrats trying to patch together potentially expensive remedies to make the current system of global trade, banking and business links that the Davos club represents acceptable to the public at a time when newcomers like U.S. president elect Donald Trump threaten to dismantle it by scrapping trade deals and introducing tariffs.

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Anthony Scaramucci: Meet Donald Trump’s Emissary to the Superrich

Heater Digby Parton writes for Salon:

Meet Donald Trump's emissary to the superrich: Anthony Scaramucci tells the Davos elite his boss is on their sideA long time ago in an alternate universe far, far away, I wrote a Salon column about how the Republican Party was in trouble because rich gadflies had decided to get personally involved in electoral strategy and that could only spell their doom. These were foolish wealthy donors for the most part, people who believed the size of their bank accounts meant they were renaissance geniuses who can do anything.

Needless to say my prophesy didn’t turn out the way I thought it would. One of those gadflies is going to be inaugurated president of the United States in two days. And it turns out that the central focus of my long-ago column has been named a top adviser to that new president.

His name is Anthony “the Mooch” Scaramucci, and he could be a character out of an Elmore Leonard novel. In fact, in my 2014 article I wrote, “the man’s hijinks make Donald Trump look like a prince by comparison.” (I didn’t know the extent of Trump’s high jinks at the time.) Scaramucci has a big mouth and a big wallet and he has been ostentatiously rubbing elbows with the political elite for quite some time.

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Water and Climate Dominate World Economic Forum Risk Report

Brett Walton reports for Circle of Blue:

Image result for Water and Climate Dominate World Economic Forum Risk ReportEnvironmental risks, steadily rising in importance, are recognized as authentic and relentless obstacles to peace, wealth, and health, according to the World Economic Forum’s global risk report, an annual survey of business, academic, and political leaders.

The report analyzes the strength and likelihood of 30 risks and 13 trends that shape global society. Four of the five environmental risks in the report, all related to climate change and extreme weather, are judged to be large impact and high likelihood threats.

Water crises, deemed a “societal risk” because of their broad reach, ranked third in the high-impact category, the third consecutive year in the top three. Harsh droughts last year in India, South Africa, and Vietnam slashed farm production and cut hydropower generation. Meanwhile, depletion of India’s groundwater reserves could squeeze long-term economic growth and flush rural residents into already jammed cities. These and other environmental threats to social well-being “are more prominent than ever,” the report states.

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World’s Eight Richest People Have Same Wealth as Poorest 50%

Larry Elliott reports for The Guardian:

Image result for World's Eight Richest People Have Same Wealth as Poorest 50%The world’s eight richest billionaires control the same wealth between them as the poorest half of the globe’s population, according to a charity warning of an ever-increasing and dangerous concentration of wealth.

In a report published to coincide with the start of the week-long World Economic Forum in Davos, Switzerland, Oxfam said it was “beyond grotesque” that a handful of rich men headed by the Microsoft founder Bill Gates are worth $426bn (£350bn), equivalent to the wealth of 3.6 billion people.

The development charity called for a new economic model to reverse an inequality trend that it said helped to explain Brexit and Donald Trump’s victory in the US presidential election.

Oxfam blamed rising inequality on aggressive wage restraint, tax dodging and the squeezing of producers by companies, adding that businesses were too focused on delivering ever-higher returns to wealthy owners and top executives.

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Davos Wonders If It’s Part of the Problem

Matthew Campbell and Simon Kennedy report for Bloomberg:

Davos illustration: Alpine disconnectKenneth Rogoff can pinpoint the moment he started to grow concerned Donald Trumpwould be the next U.S. president: It was when Rogoff’s fellow attendees at the World Economic Forum’s annual meeting last January said it could never happen. “A joke I’ve told 1,000 people in the months since leaving Davos is that the conventional wisdom of Davos is always wrong,” says the Harvard professor and former chief economist of the International Monetary Fund. “No matter how improbable, the event most likely to happen is the opposite of whatever the Davos consensus is.”

The repeated failure of business and political elites to predict what’s coming—last year, that included the U.K.’s vote to leave the European Union—doesn’t strike those returning this month to the Swiss Alps as very funny. After a year in which political upsets roiled financial markets and killed off the careers of once-dominant Davos-going politicians, the concern for delegates attending this year’s meeting isn’t that their forecasts are often wrong, but that their worldview is.

In its four decades of existence, the WEF has nurtured a broad consensus in favor of globalization and open markets. At its core is the notion that capital, goods, and people should be able to move freely across borders, a principle that can deliver huge benefits to those with education and money but seems terrifying to those without either. For the 3,000 people who will convene in the small Swiss town from Jan. 17 to 20, the 2017 event could be a moment of reckoning. At speakers’ podiums, coffee bars, and the ubiquitous late-night parties, they’ll be asking themselves whether Davos has become, at best, the world’s most expensive intellectual feedback loop—and, at worst, part of the problem.

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The Long and Painful Journey to World Disorder

Martin Wolf, influential journalist and regular attendee at Bilderberg and Davos, writes for The Financial Times:

It is not true that humanity cannot learn from history. It can and, in the case of the lessons of the dark period between 1914 and 1945, the west did. But it seems to have forgotten those lessons. We are living, once again, in an era of strident nationalism and xenophobia. The hopes of a brave new world of progress, harmony and democracy, raised by the market opening of the 1980s and the collapse of Soviet communism between 1989 and 1991, have turned into ashes.

What lies ahead for the US, creator and guarantor of the postwar liberal order, soon to be governed by a president who repudiates permanent alliances, embraces protectionism and admires despots? What lies ahead for a battered EU, contemplating the rise of “illiberal democracy” in the east, Brexit and the possibility of Marine Le Pen’s election to the French presidency?

What lies ahead now that Vladimir Putin’s irredentist Russia exerts increasing influence on the world and China has announced that Xi Jinping is not first among equals but a “core leader”?

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It Was the Rise of the Davos Class That Sealed America’s Fate

Naomi Klein writes for The Guardian:

Image result for Davos Class[…] Here is what we need to understand: a hell of a lot of people are in pain. Under neoliberal policies of deregulation, privatisation, austerity and corporate trade, their living standards have declined precipitously. They have lost jobs. They have lost pensions. They have lost much of the safety net that used to make these losses less frightening. They see a future for their kids even worse than their precarious present.

At the same time, they have witnessed the rise of the Davos class, a hyper-connected network of banking and tech billionaires, elected leaders who are awfully cosy with those interests, and Hollywood celebrities who make the whole thing seem unbearably glamorous. Success is a party to which they were not invited, and they know in their hearts that this rising wealth and power is somehow directly connected to their growing debts and powerlessness.

For the people who saw security and status as their birthright – and that means white men most of all – these losses are unbearable.

Donald Trump speaks directly to that pain. The Brexit campaign spoke to that pain. So do all of the rising far-right parties in Europe. They answer it with nostalgic nationalism and anger at remote economic bureaucracies – whether Washington, the North American free trade agreement the World Trade Organisation or the EU. And of course, they answer it by bashing immigrants and people of colour, vilifying Muslims, and degrading women. Elite neoliberalism has nothing to offer that pain, because neoliberalism unleashed the Davos class. People such as Hillary and Bill Clinton are the toast of the Davos party. In truth, they threw the party.

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Those Davos Clichés In Full

Gideon Rachman, a regular at Davos and Bilderberg, writes for The Financial Times:

I am often asked what is the “mood” of Davos? I always find this question hard to answer – possibly because it is meaningless. However, after four days in the Congress Centre, or trudging from hotel to hotel, I do have a fairly sure grasp of this year’s preferred clichés at the World Economic Forum.

Favourite cliché question (from a podium)

What keeps you awake at night?

In my case, the answer to this question is either, the cat or the memory of some personal humiliation. But I seem to be unusual in Davos. People here lie awake at night, worrying about Chinese exchange-rate policy or the collapsing oil price.

Favourite cliché question (corridor version)

What are you picking up?

The correct answer to this question is not – “a cheese sandwich” or “a nasty cold”. It is, “I’m picking up a lot of anxiety about Chinese exchange-rate policy”

Favourite analysis cliché

The new normal

The great thing about this phrase is that it can be applied to almost anything – from the economic growth rate in China to bad weather in the United States. If uttered with the right tone of world-weary insight, it sounds strangely wise

Favourite clichéd concept

The fourth industrial revolution

Normally, the chosen theme for the World Economic Forum is forgotten within the first day or so. This year’s however- “the “fourth industrial revolution” – has lasted all the way through until Saturday. This could be because it is a really important concept. Or it could be because Klaus Schwab, the chairman of the forum, has a book out, with that title.

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Davos, Bill Gates and The Revenant of Neoliberalism: Interview with Polly Jones

Afshin Rattansi speaks to Polly Jones, Head of policy and campaigns at Global Justice Now about Philanthrocapitalists in Davos, Global Justice Now’s newest report Gated Development and why we need to look at who aid is really aiding. (Going Underground)

The 1% Economy: Interview with Raymond Offenheiser

Narmeen Sheikh and Amy Goodman talks to Raymond Offenheiser, president of Oxfam America, about a new report from Oxfam on global inequality which finds that the world’s richest 62 billionaires now own as much wealth as half the world. The report is timed to coincide with the meeting of global elites at the World Economic Forum in Davos, Switzerland. Part two of the interview can be viewed here(Democracy Now!)

Richest 62 people as wealthy as half of world’s population, says Oxfam

Larry Elliott reports for The Guardian:

The vast and growing gap between rich and poor has been laid bare in a new Oxfam report showing that the 62 richest billionaires own as much wealth as the poorer half of the world’s population.

Timed to coincide with this week’s gathering of many of the super-rich at the annual World Economic Forum in Davos, the report calls for urgent action to deal with a trend showing that 1% of people own more wealth than the other 99% combined.

Oxfam said that the wealth of the poorest 50% dropped by 41% between 2010 and 2015, despite an increase in the global population of 400m. In the same period, the wealth of the richest 62 people increased by $500bn (£350bn) to $1.76tn.

The charity said that, in 2010, the 388 richest people owned the same wealth as the poorest 50%. This dropped to 80 in 2014 before falling again in 2015.

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As inequality soars, the nervous super rich are already planning their escapes

Alec Hogg reports for The Guardian:

Private jet landing in the AlpsWith growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.

Johnson, who heads the Institute of New Economic Thinking and was previously managing director at Soros, said societies can tolerate income inequality if the income floor is high enough. But with an existing system encouraging chief executives to take decisions solely on their profitability, even in the richest countries inequality is increasing.”‘

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Who are the Davos Class? (Infographic)

Davos: 1700 private jets to fly in 2500 people for forum on “decarbonizing the global economy”

Alanna Petroff reports for CNN Money:

swiss airportBillionaires and world leaders from across the globe are flying en masse to the annual World Economic Forum in Davos, Switzerland — and they insist on traveling in style.

Roughly 1,700 private flights are expected over the course of the week, which is twice as many as normal, according to WINGX Advance, a tracking firm. Traffic is expected to rise 5% compared to last year’s event.

Private jet companies have warned clients to plan ahead, as securing spots for landing, take-off and parking can become a logistical nightmare.’

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New Oxfam report says half of global wealth held by the top 1%

Larry Elliott and Ed Pilkington report for The Guardian:

‘Billionaires and politicians gathering in Switzerland this week will come under pressure to tackle rising inequality after a study found that – on current trends – by next year, 1% of the world’s population will own more wealth than the other 99%.

Ahead of this week’s annual meeting of the World Economic Forum in the ski resort of Davos, the anti-poverty charity Oxfam said it would use its high-profile role at the gathering to demand urgent action to narrow the gap between rich and poor.

The charity’s research, published today, shows that the share of the world’s wealth owned by the best-off 1% has increased from 44% in 2009 to 48% in 2014, while the least well-off 80% currently own just 5.5%.

Oxfam added that on current trends the richest 1% would own more than 50% of the world’s wealth by 2016.’

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Still Report: Davos 2014

Davos: Orgy of Out of Touch Billionaires

Barclays boss: ‘After this generation of bankers, there will be another crash’

Photograph: Justin ThomasFrom The Guardian:

Antony Jenkins, the boss of Barclays, warned yesterday that there would be another financial crisis once the current crop of bankers, who bore the scars of 2008, had retired or died. “I don’t think we’re going to have another crisis like this in the next five years, but we will have another problem when all the people like us … have retired or died.”

Jenkins said the only alternative was “to find a way to box in the animal spirits (of bankers) through profound change”.

As the bonus season begins – and banks such as Barclays seek ways to avoid the EU bonus cap – Jenkins insisted there is now more pay restraint among bankers, but said banks also had a responsibility to shareholders to attract the best employees.

Speaking at Davos on whether the markets are now safe again, he was forced to defend the use of complex financial derivatives, which were described by a fellow speaker as a “net negative to society”. Hedge fund boss Paul Singer, who runs Elliott Associates, said he traded derivatives, but added: “On balance (there is a) net negative to society from this type of invention. The hedging benefits have been exaggerated and are outweighed by growing complexity and leverage.” Jenkins, however, insisted that derivatives helped customers ranging from pension funds to airlines, which use them to hedge fuel costs.

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Oxfam: 85 richest people as wealthy as poorest half of the world

Photograph: Arnd Wiegmann/REUTERSFrom The Guardian:

The world’s wealthiest people aren’t known for travelling by bus, but if they fancied a change of scene then the richest 85 people on the globe – who between them control as much wealth as the poorest half of the global population put together – could squeeze onto a single double-decker.

The extent to which so much global wealth has become corralled by a virtual handful of the so-called ‘global elite’ is exposed in a new report from Oxfam on Monday. It warned that those richest 85 people across the globe share a combined wealth of £1tn, as much as the poorest 3.5 billion of the world’s population.

The wealth of the 1% richest people in the world amounts to $110tn (£60.88tn), or 65 times as much as the poorest half of the world, added the development charity, which fears this concentration of economic resources is threatening political stability and driving up social tensions.

It’s a chilling reminder of the depths of wealth inequality as political leaders and top business people head to the snowy peaks of Davos for this week’s World Economic Forum. Few, if any, will be arriving on anything as common as a bus, with private jets and helicopters pressed into service as many of the world’s most powerful people convene to discuss the state of the global economy over four hectic days of meetings, seminars and parties in the exclusive ski resort.

Winnie Byanyima, the Oxfam executive director who will attend the Davos meetings, said: “It is staggering that in the 21st Century, half of the world’s population – that’s three and a half billion people – own no more than a tiny elite whose numbers could all fit comfortably on a double-decker bus.”

Oxfam also argues that this is no accident either, saying growing inequality has been driven by a “power grab” by wealthy elites, who have co-opted the political process to rig the rules of the economic system in their favour.

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World Economic Forum: Gap between rich and poor the biggest threat to global economy

The World Economic Forum’s Global Risks 2014 reportFrom RT:

Growing income inequality is the biggest risk the world may face within the next 10 years. It has already squeezed the middle class in both developed and emerging economies, the World Economic Forum (WEF) warns.

The report, compiled with the help of over 700 global experts, warns against the chronic gap between the incomes of the richest and poorest people. It’ll become the risk that is “most likely to cause serious damage globally in the coming decade,” the report said.

Extreme weather events such as floods and drought is the second biggest threat to the global economy according to WEF. “This is hardly surprising, given the devastating impacts of having too little water, or too much. While water’s immediate impacts are often local, water security is now recognized as a systemic global risk”, says the report.

Unemployment is another high risk the globe may face, especially among the young, which the report calls the “lost generation”. The competition to find opportunities will increase on a par with rising education costs.

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Exposing the Financial Core of the Transnational Capitalist Class

Shadow Banking: Going After the Banksters. Then and NowFrom Project Censored:

Introduction

In this study, we decided to identify in detail the people on the boards of directors of the top ten asset management firms and the top ten most centralized corporations in the world. Because of overlaps, there is a total of thirteen firms, which collectively have 161 directors on their boards. We think that this group of 161 individuals represents the financial core of the world’s transnational capitalist class. They collectively manage $23.91 trillion in funds and operate in nearly every country in the world. They are the center of the financial capital that powers the global economic system. Western governments and international policy bodies work in the interests of this financial core to protect the free flow of capital investment anywhere in the world.

A Brief History of Research on the American Power Elite

A long tradition of sociological research documents the existence of a dominant ruling class in the United States, whose members set policy and determine national political priorities. The American ruling class is complex and competitive, and perpetuates itself through interacting families of high social standing with similar lifestyles, corporate affiliations, and memberships in elite social clubs and private schools.1

The American ruling class has long been determined to be mostly self-perpetuating,2 maintaining its influence through policy-making institutions such as the National Association of Manufacturers, the US Chamber of Commerce, the Business Council, Business Roundtable, the Conference Board, American Enterprise Institute for Public Policy Research, Council on Foreign Relations, and other business-centered policy groups.3 These associations have long dominated policy decisions within the US government.

In his 1956 book, The Power Elite, C. Wright Mills documented how World War II solidified a trinity of power in the US that comprised corporate, military, and government elites in a centralized power structure motivated by class interests and working in unison through “higher circles” of contact and agreement. Mills described how the power elite were those “who decide whatever is decided” of major consequence.4 These higher-circle decision makers tended to be more concerned with interorganizational relationships and the functioning of the economy as a whole, rather than with advancing their particular corporate interests.5

The higher-circle policy elites (HCPE) are a segment of the American upper class and are the principal decision makers in society. Although these elites display some sense of “we-ness,” they also tend to have continuing disagreements on specific policies and necessary actions in various sociopolitical circumstances.6 These disagreements can block aggressive reactionary responses to social movements and civil unrest, as in the case of the labor movement in the 1930s and the civil rights movement in the 1960s. During these two periods, the more liberal elements of HCPE tended to dominate the decision-making process and supported passing the National Labor Relations and Social Security Acts in 1935, as well as the Civil Rights and Economic Opportunities Acts in 1964. These pieces of national legislation were seen as concessions to the ongoing social movements and civil unrest, and were implemented instead of instituting more repressive policies.

However, during periods of threats from external enemies, as in World Wars I and II, more conservative/reactionary elements of the HCPE successfully pushed their agendas. During and after World War I, the United States instituted repressive responses to social movements, for example through the Palmer Raids and passage of the Espionage Act of 1917 and the Sedition Act of 1918. After World War II, the HCPE allowed and encouraged the McCarthy-era attacks on liberals and radicals and, in 1947, passage of the National Security Act and the anti-labor Taft-Hartley Act. In the past twenty-five years, and especially since the events of 9/11, the HCPE in the US has been united in support of an American empire of military power that maintains a repressive war against resisting groups—typically dubbed “terrorists”—around the world. This war on terror is much more about protecting transnational globalization, the free flow of financial capital, dollar hegemony, and access to oil, than it is repressing terrorism. Increasingly, the North Atlantic Treaty Organization (NATO) is a partner with US global dominance interests.7

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