For five days every year, the remote city of Davos, Switzerland is home to a gathering of the ultra-elite of the world’s financial and political supermen and women. The World Economic Forum (WEF) holds conferences and panel discussions with some of the most talked-about authors, speakers, movers and shakers in the worlds of diplomacy, foreign policy, business and finance. Along with super-deluxe accommodations and armies of bodyguards go champagne, canapés and $40 hot dogs.
Every year at Davos, there’s a theme to many of the presentations; last year it was “Mastering the Fourth Industrial Revolution”; in 2015 it was “The New Global Context.” But this year, despite the official theme of “Responsive and Responsible Leadership,” much of the talking will almost certainly be about new American President Donald Trump and populist revolutions that are sweeping the world.
To the gathered crowds, Trump represents a force to be feared — anti-globalism in its true colors. Adding insult to injury is the fact that Trump will not be present at the conference (he has actually never attended it). Trump’s Director of Public Liaison and Intergovernmental Affairs, former hedge fund manager Anthony Scaramucci, will be the administration’s only representative there, in an unofficial capacity.
But otherwise, for the first time practically since the conference was founded in 1971 by business professor Klaus Schwab, the American government will essentially be a no-show, making the event even more of a gathering of the one percent of the one percent — the people who essentially financed the other main candidate in the presidential election, Hillary Clinton (and her eponymous family foundation).
Unlike other gatherings of the world’s elite such as the Bilderberg Group meeting or the Bohemian Grove Club conclaves, which draw protesters and occasional threats of violence, Davos’ remoteness (some attendees arrive by helicopter) combined with a Swiss penchant for protecting people’s privacy means that the conference is fairly open to whoever has the means to get there and the money to stay.
That isn’t to say that security personnel and metal detectors aren’t in evidence. But hotels aren’t cheap; the most affordable accommodations in Davos are roughly $500 per night. The conference itself costs a mind-numbing $50,000 to attend, but surprisingly, at least 2,500 deep-pocketed souls are willing to pony up the money, to the chagrin of locals, some of whom have been forced to sleep in makeshift accommodations in shipping containers this year due to the overflow.
A system of colored badges lets people tell who is who, and access to some of the nightly “soirées” or certain facilities is off-limits except to those who have paid the full admission price.
Of course, attendees are showered with free swag bags by the conference’s organizers, and anyone who is lucky enough to have their boots on the ground in Davos is fairly free to rub shoulders with world-famous CEOs, dignitaries, heads of state and the odd Hollywood star of the moment.
Deals by the dozens are consummated on the sidelines as conference-goers mostly listen to each other’s out-of-touch fears and concerns and echo what they’ve been hearing all year. The press, which is invited for the most part, tends not to be too critical of either the speakers or the conference because the reporters assigned to cover the event don’t want to lose their hard-won access to it.
At the last Davos, the consensus was that Trump was sure to lose the presidential election, but his surprise victory has been a slap in the face of the globalists gathered to make trade deals and talk shop.
This year, attendees include Chinese President Xi Jinping, British Prime Minister Theresa May, Facebook COO Sheryl Sandberg, Formula One driver Nico Rosberg and Academy Award-winning actors Matt Damon and Forest Whitaker. The latter thespian received an award and attempted to speak about finding “common ground” with incoming President Trump.
“Right now, we’re polarized,” said Whitaker. “There’s a lot of people that are doubting that we’re going to move forward in a positive way, but we have to try. And if it doesn’t happen, the people themselves have to stand up and speak — protest, movements, marches, however, to make their voices be heard.”
But others weren’t so sure. Ray Dalio, the American founder of global hedge fund Bridgewater Associates, debated with International Monetary Fund (IMF) Managing Director Christine Lagarde and former President of Harvard University (and Treasury Secretary under Bill Clinton) Larry Summers, both of whom are among the world’s highest-profile globalist personalities.
“I want to be loud and clear: populism scares me. It is the extremes,” Dalio claimed. “If you study the 1930s to understand what the wealth gap was in the 1930s, it rhymes [with what’s happening today]. Populism is not just the belief that there is a wealth gap, although the wealth gap is the highest since the 1930s. In the 1930s, every government that existed practically was populist. So populism by definition is nationalist and protectionist. And it’s also a matter of values. There is a sense of threat, my country is losing its values to [globalism].”
Dalio said he believed, “the number one issue economically as a market participant is how populism manifests itself over the next year or two.”
Lagarde said that while middle classes are growing worldwide, in the developed world — as a group —they’re feeling squeezed economically, and this was driving the surge of populism. “Policymakers need to get the signals now and think what can be done,” she said, “but it needs to be granular; it needs to be regional; it needs to be focused on what will people get out of it, and it probably means more redistribution than we have in place at the moment.”
This Socialist theme of “redistribution” was not limited to Lagarde. Summers accused Trump of making efforts to satisfy voters that were laughably meager. “Our President-elect has made four or five phone calls to four or five companies, largely suspending the rule of law and extorted them into relocating dozens or perhaps even a few hundred jobs into plants in the United States.”
Instead, according to Summers, more steps would be necessary to fight inequality: first, there needed to be “public investment on an adequate scale starting from infrastructure”; second, there needed to be greater investment in education and technology; third, efforts must be focused on “making global integration work for ordinary people,” and lastly, the new administration should be “enabling the dreams of every young American” through the provision of homes and jobs.
“Our broad objective should be to make America greater than ever before,” Summers declared. “That’s very different from making it great again.”
Two Nobel Prize-winning economists, Joseph Stiglitz and Angus Deaton, weighed in on populist sentiment in Europe. Stiglitz said that if the Euro as a currency cannot be made viable, it should be eliminated. Deaton admitted, “Breaking up the European Union would certainly help, even though it would do a lot of other bad stuff. There’s a sense of overreach. There’s the sense that people have very little control of what the EU does.”
The Italian minister of finance and the economy, Pier Carlo Padoan, said that European leaders need to develop a vision to rival the one the populists hold up.
“Europe has not a strategy for this new phase. The problem in Europe is Europe. The challenge Brexit and Trump are posing is that there is a vision. You may agree or disagree with that vision, but there is a challenge that the Brexit is posing and Trump is posing. We don’t have a vision in Europe — not a vision that is comparable in terms of power.”
Shadowy liberal billionaire financier and Democratic donor George Soros spoke about Trump as well. “I’ve described [Trump] as an imposter and con man and would-be dictator, but he is only a would-be dictator,” stated Soros.
“The Constitution and institutions of the United States are strong enough, the division of power is in operation. He would be a dictator if he could get away with it. But he won’t be able to. It is impossible to predict exactly how Trump is going to act because he hasn’t actually thought it through. He didn’t expect to win. He was surprised. He was engaged in building his brand and improving it by his success in attracting crowds. It is really only when he got elected that he started seriously to think about what he is going to do.”
“I personally am convinced that he is going to fail, not because of people like me who would like him to fail, but because the ideas that guide him are inherently self-contradictory. And the contradictions are actually already embodied by his advisors. Right now, uncertainty is at its peak. And actually, uncertainty is the enemy of long-term investment. I don’t think the markets are going to do very well. Right now, they are still celebrating. But when reality comes, it will prevail.”
