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Dissension, desperation, and a deep foreboding doom at Davos

February 9, 2009

Recently, the World Economic Forum (WEF) had its annual meeting in Davos, Switzerland. The WEF is significant in that it brings together political and economic elites from around the world including heads of state, corporate mis-leaders, economists, media opinion shapers, and even self-important celebrities like Bono.

In short, Davos is where the masters of the universe gather to talk about and plan the fate of the world.

This year, the mood at the WEF was not exactly upbeat, to say the least….

As one Business Week reporter described it,

Fear stalks the halls of the World Economic Forum in 2009. The tone is negative and the attitude is nasty, what with all the finger-pointing, nation-bashing, and fear-mongering going on in the public sessions and in private conversations. Globalization is taking a hit, the US is getting mauled, bankers are being eviscerated, politicians are being criticized, free market capitalism is being jeered, and business people are getting more and more paranoid as they exchange personal stories of revenues in free-fall across the globe.

The reasons for this of course are the global financial crisis and broader recession/depression. Or, as the opening session at Davos suggested, the world is in a “transformational crisis.”

One of the most conspicuous things about Davos this year was who wasn’t there. Namely, absent were top US leaders such as Barack Obama, Joseph Biden, or even officials like Timothy Geithner and Larry Summers who were touted as attending.

This absence has much to do with the fact that the current global crisis originated in America with the US housing, mortgage, and Wall Street collapses. The USA was thus the recipient of some deserved criticism at Davos. Indeed, this crisis is understood by some as not only a consequence of American-style free market deregulation policies but also, more fundamentally, as a repudiation of the American Neoliberal model of capitalism itself.

Moreover, the impact of this “transformational crisis” is not limited to the USA but also reverberates around the world. As Vladimir Putin put it at Davos, the world faces its “first truly global economic crisis” in the form of a capitalist “perfect storm,” the true magnitude of which has yet to be fully seen.

The following links do provide some snapshots of the general contours of this capitalist crisis, as it is unleashed upon the world:

Mayor Bloomberg’s grim doomsday budget cuts 23,000 city jobs

Vanishing jobs devastate Oregon

California Crisis Deepens: Are Other States To Follow?

46 Of 50 States Could File Bankruptcy In 2009-2010

Global jobs crisis deepens: US sheds 600,000 jobs in January

Global Financial Crisis Fells Iceland Government: Protests in Reykjavik, Other Capitals Grow as Savings and Jobs Vanish

Global financial crisis sparks unrest

Unions shut down France: Millions march for economic justice

Workers rebel in East Europe

IMF expects global economy to come to “virtual halt” in 2009

2 Comments leave one →
  1. February 10, 2009 2:50 pm

    Great post. “Deregulation,” I just hate that word. What bothers me more is that no one in leadership has said anything about “saving” money. If we keep spending what we don’t have, where does this lead to in the future? Does anyone actually own anything anymore that they’re not paying off? I would hate to agree with Putin, but it seems like we are pretty much headed that way — full throttle.

  2. February 13, 2009 1:44 am

    Hi MM:

    As I understand it, the US government is trying to stimulate consumer spending rather than savings. Whether this will work is a different issue.

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