Post-David Depression

Davos' executive leaders were euphorics this year on the return to economic growth, abundant profits and escalation of the compensation of executive directors. Economists reminded them that this growth is not sustainable, and it has never been comprehensive; but in a world where greed is always good, such arguments had very little effect.

I have attended the annual World Economic Forum conference in Davos, Switzerland, where the so-called world elite joins to discuss world problems since 1995. I've never been less inspired than this year.

The world is plagued by the most difficult problems. Inequality is growing, especially in developed economies. The industrial revolution, despite its potential, also carries serious risks for privacy, job security and democracy challenges that are caused by the increasing monopoly power of few data giants from America and China, including Facebook and Google. Climate change poses an existential threat to the entire world economy as we know it.

Perhaps more discouraging than these problems, however, are the reactions to them. To be clear, these in Davos, business leaders from around the world start almost all their speeches with confirmation of the importance of values. Their activities, they claim, are aimed not only at maximized profits for shareholders, but also at creating a better future for their workers, for communities in which they work and for the world in general. They can speak of the dangers posed by climate change and inequality.

But by the end of their speeches this year, any illusions that had remained over the values they motivate were shattered. The risks these directors seemed most concerned about stem from the populist response to the kind of globalisation they have helped form and from which they have greatly benefited.

It is no surprise, these economic elites do not fully understand the size at which the system has failed for large parts of the population in Europe and the United States, leaving the income of most households in stagnation and bringing the share of work revenues to a substantial decline. In the US, life expectancy at birth has declined for the second year in a row; among those with only middle education, the decline has continued for an even longer period.

None of the American executive directors, whose speeches I heard, mentioned the fanatism, mystgy or racism of US President Donald Trump, who was present at the meeting. No one mentioned the endless stream of ignorant statements, open lies, and hasty actions that have eroded the credibility of the US president and, therefore, the US in the world. No one has mentioned abandoning the systems of clarification of truth itself or truth itself.

Moreover, none of the titans of American corporations mentioned reducing financing from his administration for science, such an important thing for strengthening the comparable advantage of the American economy for supporting the growth of the standard of living.

No one mentioned the inspection by the international institutions' Trump administration, or attacks on local media and justice systems, which constitute an attack on the control and balance system that is at the heart of US democracy.

No, executive directors in Davos are dropping fiscal legislation that recently adopted Trump and the Republicans of Congress, which will carry hundreds of billion dollars to large corporations and wealthy people who own or direct them as Trump themselves. They are not concerned about the fact that the same legislation will bring a tax increase for most of the middle class when it is implemented in all a group whose assets have been on the decline for the last 30 years.

Even in their narrow materialistic world, where growth is of greater importance than anything else, Trump's fiscal legislation cannot be celebrated. After all, it lowers taxes on real estate speculation a activity that has produced sustainable prosperity anywhere, but has contributed to increased inequality everywhere.

The legislation also imposes a tax on universities such as Harvard and Princeton sources of numerous ideas and innovations and will bring lower expenses to the local level of education and infrastructure. The Trump administration is obviously willing to ignore the obvious fact that, in the twenty-one century, success requires more investment in education.

For executive directors in Davos, it seems that lowering taxes for the rich and their corporations, in addition to disarray, is the answer to every problem in the country. The economics of the points flowing downward, they claim, will ensure that, in the final instance, the entire population will benefit economically. And the good hearts of executive directors seem to be enough to ensure that the environment will be protected, even without rules.

History's lectures, however, are clear. The economics of the dots flowing down doesn't work. And a key reason why the environment is in such dire conditions is that corporations have not respected their social responsibilities. Without efficient adjustments and a real price paid for pollution, there is no reason to believe that they will behave differently than they have been brought in.

Davos' executive directors were euphorics about returning to economic growth, increasing profits and compensation for them. Economists reminded them that this growth is not sustainable and has never been comprehensive. But such arguments have little influence in a world where materialism is king.

So forget the banalisms on values recited by executive directors in the opening paragraphs of their speeches. They don't have the sincerity of the character played by Michael Douglas in 1987. Wall Street, but the message hasn't changed: “Babazia is a good thing.” What makes me depressed is that, although this message is clearly false, many of those in power believe it is true. /Project Syndicate/Reporter. al