For years, the World Economic Forum in Davos, Switzerland, has been ranked as the No. 1 gathering place for the smart and the powerful in business, politics, and the media. The annual sessions attract the creme de la creme, all vying to put forth their ideas and burnish their images before an eagerly awaiting world.
Now, it turns out that the WEF has amounted to little more than a glorious public relations exercise for the investment bankers, hedge fund wizards, and insurance gurus who paced the halls of the Swiss city’s fancy hotels, competing to put on the biggest parties to impress prospective clients.
“We gave them a soapbox. It was all political,” confesses Kevin Steinberg, chief operating officer of the WEF.
“They were told that we were in an unstable condition,” adds WEF founder and chairman Klaus Schwab. “But the financial community didn’t listen.”
The tragedy, according to Bloomberg News, was that Davos organizers opted to accept the funding of financial industry barons ($750,000 a year per company) and “let them turn Davos into a rave-up for Wall Street excesses.”
This revelation is just one more example of the failure of the management class to practice responsible stewardship of the companies on whose fate rests the welfare and prosperity of millions of people.
The game that the Davos boys have been playing is all about debt. The greatest debt binge of all has been the sub-prime mortgages into which millions of Americans were lured, it being quite evident that most would be unable to meet their payments when interest rates were ratcheted up.
For a disarming but thoroughly readable assessment of what debt means in our society, one can do no better than turn to Margaret Atwood’s new book, Payback: Debt and the Shadow Side of Wealth. The book is based on her Massey Lectures. They combine personal reminiscences with economic theory, political history, and literary commentary, delivered with the readability of a great novelist.
The organizers of the World Economic Forum could benefit by reading Atwood before the next Davos meeting. They’ve announced the theme of their January 2009 conference will be “Shaping the Post-Crisis World.” Does that mean they expect us to be out of crisis by then?
As far back as 2003, the over-leveraging of the financial system was a serious topic of conversation at Davos. The WEF’s corporate members never had an understanding of how big a problem it was, adds Kevin Steinberg. “We had assembled the world’s greatest economic experts to confer with them, and the financial community was not aware of that expertise.” Most passed up the key sessions.
The Bloomberg report is one of the most devastasting take-downs of hubris and egotism one can read. Basically, the senior executives of the financial world were too busy partying and prepping their sales pitches for big clients to listen to dire warnings.
The first World Economic Forum on Central Asia starts October 30 in Instanbul. It’s advertised as a meeting that will concentrate on how to “overcome the challenges brought about by the recent financial crisis.”
There’s to be no “merry-making,” Schwab promises. Let’s hope not.
The Economics Club of Toronto attracts the heavyweight speakers from politics and business, and so when I heard Gilles Duceppe would be speaking there, I was glad to go along to yesterday’s luncheon.
I had a chance to chat with Mr. Duceppe after his talk. He was warm, persuasive, and friendly. I joked that if he were a federalist, we’d all want to vote for him. His response: “Maybe I should open a franchise in Ontario.”
About 250 people were at the Sheraton Centre to hear him. He said he hadn’t come to tell Canadians how to vote, but then made it clear that he was preaching to both Quebeckers and other Canadians that the Bloc represents the best opportunity to prevent Stephen Harper from getting a majority.
Our outstanding lady of letters, Margaret Atwood, was a guest at the head table and afterwards, told reporters that if she lived in Quebec she’d vote for the Bloc.
“I’m here because Mr. Duceppe understands the contribution that culture makes to our economy. He understands $84-billion, and he understands 1.1 million jobs,” she said.
Duceppe received standing ovations both before and after he spoke, although a few remained in their seats at the end of his talk.
“Quebec is the only place in Canada that can still stop Stephen Harper,” Duceppe declared.
He stressed that the election wasn’t about sovereignty, but added:
“One day or another this problem must be solved. I’m more confident than ever that sovereignty is the best answer for Quebec and for Canada. Then, we’ll be able to go forward as two countries together.”
Duceppe reminded us of Pierre Trudeau’s declaration in 1976 that “separatism is dead.” Two months later, the PQ won its first term of office.
Duceppe talked a lot about culture, recognizing Margaret Atwood’s presence in the room.
“Not only is culture tremendously important to our national identity, but also a huge part of our economy — it’s worth $84 billion to Canada and gives jobs to a million people.” He slammed Stephen Harper’s recent remarks that “ordinary Canadians” aren’t interested in the arts.
“I’m here to defend both Quebec and Canadian cultures,” he said. “We don’t want to live on Planet Hollywood.”
I saw a few notables aorund the room, and had a chance to visit a bit with Judy Rebick, the left-wing activist and feminist who has a new book coming out soon.
In the event that the Conservatives are returned with another minority, she’d like to see an NDP-Liberal-Bloc accord that would keep Harper from forming a government. She points to the NDP-Liberal accord engineered between Bob Rae and David Peterson in Ontario in 1985 that let the Liberals govern even though the Conservatives had won the most seats in that election.
This may sound like grasping at straws, but Mackenzie King used the same tactic once federally. He governed successfully with Progressive party support when the Tories had won the most seats.
I’ll ponder Judy’s idea and maybe write about it next week.