Davos Hootenanny

Despite the reformers endless efforts to encircle mankind, some persist beyond the broad extent of the casted net.  In the backwaters of the new Republic, for instance, the distant rumble and flicker of Saturday night hootenannies still befall yonder the mighty oak groves.

 

world-economic-forumPoster announcing Davos hootenanny – few things are worse than a bunch of self-anointed world improvers.

 

In defiance of all things good and proper, the unconsecrated gather under the pale moonlight and jig step to zydeco washboard rhythms while downing tipples of corn syrup and fermented grain.  These knees-ups certify that, even in this era of big government, there remain places in the lower forty-eight where freedom reigns.

Similarly, the backwoods of the old world, rare as they may be, have not been entirely defamed.  Though old world songs are more rigid – and drinks more dry – there are still places where people come together with gusto, and without interference, to dance the polka around the maypole.

Across the planet, no doubt, there are still pockets of liberty where individuals can lawfully expel into toilet bowls that use more than 1.28 gallons per flush.  These places are uniquely exceptional with their own distinct rhyme.  But, in common, they’re all places where the air smells sweet, the water flows clean, and the people can hold their chin up.

Davos, Switzerland, located along Landwasser River, in the Swiss Alps, should be one of those places.  But, alas, it is not.  Sadly, for one week each year, corporate, political and academic reformers debase the wealthy enclave and ski resort for their annual hootenanny…the World Economic Forum.

 

Improving the State of the World

This week the big gathering went down.  Although we didn’t receive an invitation this year – again – we won’t let that stop us from offering some reflections.

The World Economic Forum, you see, is a place where grave and weighty problems are considered.  After all, the forum’s mission for over four decades has been, “improving the state of the world.”  As far as we can tell, the great uplifters are working towards a losing proposition.

Certainly, the clever fellows of Davos have their work cut out for them.  The state of the world’s not well.  Numerous improvements are needed to revive its health. For example, the stock market, that forward looking animal, sees nothing but dark clouds on the horizon.

In fact, $14 trillion in implied wealth has been vaporized from world stock markets over the last seven months.  In spite of our dull senses we can fetch a clue.  If this isn’t an ominous warning sign portending an imminent global recession we don’t know what is.

 

FTSE All WorldFTSE All World Index – to everybody’s vast surprise, the bear strikes – click to enlarge.

 

Thus far, the data rolling in confirms the stock market’s visions of economic inactivity.  In the United States, industrial production and retail sales continue to decline.  Fourth quarter GDP projections are being estimated at a hair above zero.  What’s more, in direct repudiation of the Fed’s recent increase to the federal funds rate, Treasury yields haven’t gone up; rather, they’ve gone down.

But it’s not just the U.S. economy that’s slowing.  This week it was revealed that China’s economy is growing at its slowest pace in 25 years.  So, too, the European economy continues to be mired in migrant gloom.  And in the Middle East, as oil’s dropped below $30 per barrel, things have gotten so bad that sovereign wealth funds are calling in their cash and ducking Davos.

 

Chasing the Wild Goose in Davos

On top of all that, according to William White, former chief economist of the Bank for International Settlements, the world faces a major banking crisis. White told The Telegraph from Davos on the eve of the World Economic Forum:

 

“Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief.

It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something.”

 

william whiteFormer BIS economist William White throwing up his hands …

Photo via: Institute for new Economic Thinking

 

Given all the problems with the world, and all the improvements that must be made, how does a Davos do-gooder discover how to do some good?  Of course, the place they always begin their quest is with a perusal of the World Economic Forum’s agenda.  Here, for your convenience, are some of this year’s choice topics…

Could ‘trust inequality’ explain rising populism?  Globalization is dead: what now?  What’s next for Europe?  How can society better cope with crises?  Could algorithms keep you healthy?  Can we really trust scientists?  Three ways to get inside the heads of millennials.  What is climate change doing to our health?  Why gender equality makes business sense.  Are we ready for a fossil fuel-free future?  And much, much more.

Indeed, there are causes at Davos for meddlers of all stripes.  Leonardo DiCaprio even traversed halfway across the planet to wag his finger at big oil companies for changing the earth’s climate.  “Enough is enough,” declared the Hollywood A-lister.

Ultimately, though, the efforts of the Davos elites to control the world economy are in vain.  For attempting to improve the economy through force never quite works out the way the planners intend.  New complexities arise to make a mockery of their efforts.

 

20150729_roadtoserfdom3They just “know” what’s best for us. How? It is probably Hegel’s Weltgeist whispering into their ears – Marx was afflicted by this special form of mental illness as well.

Image via: General Motors

 

The simple fact is the planners’ solutions to the problems their policies created in the first place result in even greater problems…and even greater solutions.  In short, their cure is worse than the disease.  Nonetheless, they’ll never give up chasing the wild goose.

“I’m here to flatly state: It’s our responsibility, like those who have gone before us, to bend these [technological] changes to the benefit of society,” Vice President Biden said.  “To make sure the digital revolution creates far more winners than losers.”

Alas, we all know what Biden means.  More government.  More control.  Less winners.  More losers.

 

big-government-regulationBiden’s vision: Big government “improving the world” and “creating winners”…

Cartoon by: Eric Allie

 

Chart by: StockCharts

 

Chart and image captions by PT

 

M N. Gordon is the editor and publisher of the Economic Prism.

 

 

 

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