This week, the world’s elites met in Davos, Switzerland, for the 54th World Economic Forum (WEF). If this is news to you, welcome to a pretty large club. In a relatively short period of time, the WEF has gone from a much-ballyhooed event to one that struggles to get ink in the media, let alone any sort of interest from the general public. To that end, I have not fielded a single question or had any sort of discussion about it, not one.
To the dispassionate observer, as most people are, it was almost as though it didn’t happen. I mean, a ‘who’s who’ of global political and business leaders descend on a hamlet in the Alps to discuss any number of meaty topics, and the rest of the world shrugs its shoulders? How now brown cow?
In a lot of ways, the WEF has long been an affair where the world’s movers & shakers go to see and be seen. If you aren’t at Davos, or didn’t send your people, you really aren’t terribly important, are you? At least not to the anointed class you aren’t. After all, it is where they go to shape the world for the hordes of the unwashed.
But, if the WEF is really that important, why has the hoi polloi lost interest? Why is it this newsletter/blog is the first many of you have read about it?
The easy answer is much of what happens in Davos stays in Davos. It is sort of like Vegas in that regard, only with words and sophisticated arguments instead of booze. Further, it increasingly seems WEF attendees are more concerned with impressing one another than anything else. At least that is how I see things from the outside, the way outside, looking in.
To be certain, this always has, and always will, be the case. Further, it isn’t just the folks in Davos. Regardless of their station in life and where they live, most people desire to ‘chin’ to the proverbial bar with their peer group. It doesn’t even matter what the definition of success is, folks want to attain it.
Often, when and if they don’t, the remainder of the group will ostracize them. This is the genesis of ‘groupthink,’ when everyone adheres to a so-called ‘party line’ in order to maintain their position within the party. It doesn’t matter how ridiculous it might be, think North Korea’s Juche theory. You simply have to tell the lie long enough and loud enough until it becomes the truth, at least to the group.
Consider this telling passage from Kimberley A. Strassel’s WSJ column: ‘Potomac Watch: The Them vs. Us Election,’ which you can find here:
“Among the elite, 74% say their finances are getting better, compared with 20% of the rest of voters. (The share is 88% among elites who are Ivy League graduates.) The elite give President Biden an 84% approval rate, compared with 40% from non-elites. And their complete faith in fellow elites extends beyond Mr. Biden. Large majorities of them have a favorable view of university professors (89%), journalists (79%), lawyers and union leaders (78%) and even members of Congress (67%). Two-thirds say they’d prefer a candidate who said teachers and educational professionals, not parents, should decide what children are taught.’
‘More striking is the elite view on bedrock American principles, central to the biggest fights of today. Nearly 50% of elites believe the U.S. provides “too much individual freedom’ compared with nearly 60% of voters who believe there is too much “government control.” Seventy-seven percent of elites support “strict rationing of gas, meat and electricity” to fight climate change, vs. 28% of everyone else. More than two-thirds of elite Ivy graduates favor banning things like gasoline-powered cars and stoves and inessential air travel in the name of the environment. More than 70% of average voters say they’d be unwilling to pay more than $100 a year in taxes or costs for the climate compared with 70% of elites who said they’d pay from $250 up to “whatever it takes.”
You can find the survey from which Strassel borrowed heavily here. It is an extremely interesting, and short, read. Further, it helps explain President Trump’s continued popularity with a huge swath of the American public.
Despite Trump’s apparent wealth, or appearance thereof, and Ivy League education, John and Jane Q. Public don’t associate him with the other elitists. What’s more, other elites don’t appear to want much to do with the man. They never really have. After all, how many people in the Social Register would be boorish enough to put their name on the side of a casino? Especially one in, shudder, Atlantic City? I declare, it is enough to give one the vapors.
Basically, Donald Trump is the embodiment of a large portion of the public’s dissatisfaction with its traditional ruling class. As a result, millions of Americans give his, shall we call it, brash personality a pass when they probably wouldn’t suffer similar people in their daily lives. That is how he continues to have such a chokehold on the Republican Party, as his landslide victory in this week’s Iowa Caucuses clearly demonstrated.
The crazy thing about it is who would have believed, as recently as 10-years ago, the Republicans would have been the ‘anti-establishment’ party? Let alone that Donald Trump would be its standard bearer? It is as though we have fallen through the looking glass.
So, going back to Davos and the WEF, one wonders how much progress they made on helping families in Tulsa put food on the table? Or assistance for the multitudes who are suffering with ever higher rents because housing has become so unaffordable? What about all the children coming through K-12 with no marketable skills for the 21st Century economy? Or hope for untold millions of lives being wasted by the opioid crisis, which the powers that be appear content to let fester?
The list goes on and on. Davos? All that power and money meeting in luxury and privilege in Switzerland this week? What is the old phrase? Let them eat cake?
Yeah, that about sums it up. And you know what? The good folks in Iowa served up President Trump with the biggest slice.
Have a great weekend.
Thank you for your continued support. As always, I hope this newsletter finds you and your family well. May your blessings outweigh your sorrows on this any every day. Also, please be sure to tune into our podcast, Trading Perspectives, which is available on every platform.
John Norris
Chief Economist
Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as well as those of our Investment Committee, is subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.