DAVOS MAN
In the 13-odd years I have been doing financial writing, I have not once mentioned the World Economic Forum in Davos, Switzerland. A bunch of very high-maintenance people. Anyway, this is a super interesting year to write about Davos, for reasons that should be obvious, so here we go.
Honestly, I have never really had anything against Davos. I figure that if you are a billionaire, you probably think you have life all figured out, so why not carry the message to someone else. I’m probably guilty of it as well to a certain extent (though certainly not a billionaire). We all like to get in other people’s business. I suspect you’d do the same thing in a similar position.
But the contrast between what is going on in Davos and what is happening today in Washington, DC couldn’t be more stark. Now let’s be clear—these people in Davos are full-throated advocates for global trade. Now, it’s not clear if they understand the theory of it, or if they are advocates of it because they stand to benefit from it. Stiglitz has weighed in on the subject (I loathe the man), saying that globalization has gradually eroded the bargaining power of workers. And he is probably right. If you are not just competing with the guy standing next to you, but the guy in China as well, you don’t have a lot of pull.
Anyway, a lot of people are making a big deal of these guys who look like they are out of Inception, in snowsuits standing on rooftops with rifles, and also the drone jammers (yes, there is such a thing). I’ve also learned a little bit about Davos culture in my reading. It’s not hard to figure out why these people are insufferable.
And Amal Clooney. Insufferable surrounds her wherever she goes.
But a lot of what goes on at Davos is people pretending to care about the middle/lower class, when in fact they do not. Nobody is being fooled here. People think that Trump is being disingenuous with his blue collar vibe, but I really think he means it. And his policies do stand to benefit a certain class of people (at the expense of other people).
Again, we could go on and on about how the world has shifted onto the nationalist/globalist axis.
The irony of all of this is that Scaramucci was the most popular guy at the conference. People were hanging on his every word.
Davos seems like the kind of place where if I were invited, I’d wear my best suit, and find out that it was about 3 levels below what everyone else was wearing. Rich people conference? Not the worst idea in the world. Who likes flying Spirit Airlines?
What people object to is the notion that these folks have ideas about how everyone should live their lives. Which is kind of what the Trump phenomenon was all about. Trump isn’t going to tell the guy with Salt Life stickers on the back of his F-150 to eat vegetarian because it reduces his carbon footprint. People have had quite enough of that nonsense. Merkel skipped it. Like I said.
Mod Note (Andy): This post is an adaptation from the January 20th edition of Jared's Daily Dirtnap Newsletter. If you'd like to read more, WSO readers qualify for a $100 discount to his Daily Dirtnap daily market newsletter...just email [email protected] and mention "WSO Monkey Discount". You can follow Jared on twitter at @dailydirtnap.
Agreed, but: 1.) A Syrian with a US green card should be allowed to go home and feed her dog. 2.) Some level of immigration-- I.E. people who earn more than $100K/year-- probably helps the US economy. 3.) Having the president follow judicial orders (and I'm not sure they're being violated) protects everybody's rights.
Davos is full of IYIs. And Trump should be judged by his actions, not his words. But Trump has always had a fundamental lack of restraint or empathy for those he disagrees with or victimizes. That's a fundamental problem for a country's leader.
I'm all for cutting new visas going forward, but the question is what value we place on justice for people who are already here legally. Even if it makes me grit my teeth when I see noncitizens protesting US policy (they have an escape hatch unlike Americans) they've been granted those rights, and we can't take them away. We can just stop new immigration.
I'm with you man. An article I read today described Trump's approach as "firing a blunderbuss." I agree with that assessment. Having said that, I do agree with the ban idea in principle - every nation has a right to enact policies to protect itself - but the approach here was all wrong. People who had already been vetted or had worked with the troops and got approval to come here or people with green cards should not be included. Even people with dual citizenship of western countries should've been excluded, I think.
The current confusion and mess led to courts overturning parts of the order and even DOJ refusing to defend it. That's a lot of political capital gone over something that could have been prevented had they bothered to write one or two more paragraphs.
It does go to show that government is not exactly capable of thinking one step ahead. I would have assumed that they would have known which green card holders from specific countries do pose a risk. Instead, they did not think to ask.
Globalization has increased the bargaining power of laborers via capital flows. The exchange of goods and services (current account) means the exchange of capital (capital account) and necessarily so. Capital moves to where it can find its highest return, i.e., where it is most productive. As capital productivity increases, so does labor productivity and wages. The empirical support for this is beyond dispute and Stiglitz is a dipshit.
This is correct. I think the discussion is better framed when comparing specific groups of laborers like American Rust Belt workers versus Southeast Asian workers. Where do we get the better return?
Sure, you can always cherry pick data. The point, though, is that the American worker, at the margin, has not suffered from free trade. Far from it.
This mess is a perfect example of government incompetence. And democrats and republicans want to give the government even more power? What a joke.
Not going to opine on politics here. But keep reading and watching. And don't let anchors or journalists tell you what to think or believe.
Jared Dillian
"The irony of all of this is that Scaramucci was the most popular guy at the conference. People were hanging on his every word."
Da FUQ? You can't be serious. Good for the Mooch, I guess.
Is he supposed to be smart or just a good marketer?
What is it about Scaramucci that people really like or dislike?
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