January 23rd, 2012
01:27 AM GMT
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Davos, Switzerland (CNN) – I have arrived in Davos, a few days ahead of the World Economic Forum. Getting here early before the hot air starts rising from the WEF gives me a chance to witness this elite mountain resort without the fuss and to think about what might happen at this year's junket. Writing this I can see the last straggler skiers enjoying this year's superb snow - the best in a decade - which frankly is more than can be said for the prospects for this year's forum. I think this will be one of the most complicated and will produce relatively little by way of initiative and solutions.

It will be "Davos do little."

The sad fact is, for the decision makers coming here, all the necessary decisions and actions are getting nastier, harder and more difficult to take. The same problems they tried to solve in 2009, 2010 and 2011 are still smoldering, while some, like Greece, are at imminent risk of bursting into flames again – for instance, if the banks fail to agree on how much of a haircut (posh way of saying “loss”) they should take.

Incidentally, it would be unkind to remind those coming here that it was at Davos in 2010 that policy makers promised that Greece would never be allowed to default and that the euro crises would soon be solved.

It is a raw truth that during the past three years the low hanging fruit have been picked. Slashing interest rates, bailout of banks, Quantitative Easing (1, 2 & 3), Full Allotment - they have thrown everything at the problem, and things are still pretty dreadful with high unemployment and sluggish growth in the United States and an imminent recession in the eurozone.

These facts make Davos 2012 different from the early years of the crises. In 2009, the fire was well and truly burning; there was a sense of urgency about what could be done. By 2010 the sovereign debt crisis was bubbling up, and the call was, "something had to be done." Even last year, there was still some hope they could get “ahead of the curve.”

Thirteen European summits and several national ratings downgrades later, no one is that naive. What's left in Davos 2012 is the slow, realization of a lot more pain ahead. So in that scenario people will come here to talk and do little. They have no other options.

Take the world's finance minister who is coming here, knowing that governments have stretched their budgets to breaking point. They are cutting back, not spending more. Downgraded European countries have to worry about how they will fund the European Financial Stability Facility sufficiently to create a decent firewall around Italy and Spain to say nothing of the awful arguments awaiting the negotiators finalizing the eurozone's fiscal compact on deficit and debts.

Central bankers will be here, knowing they have to get the printing presses running again and worry about inflation further down the road. Call it QE, Full Allotment or Reduced Reserve Ratios...it’s printing money to keep us going.

And those who come here with the social agenda - to alleviate poverty, disease and despair - will find people nodding in agreement and doing little about it. This year the biggest noise may come from the Occupy Davos protesters living in makeshift igloos outside the Congress Centre.

I still believe there is huge value in the Davos forum: It is the starting point of the year when government leaders, CEOs and the great thinkers take an overview of what needs to be done and start planning how to do it. That won’t happen this year, I am afraid. It’s simply too complicated and difficult.

soundoff (26 Responses)
  1. logos

    With the "1 vs 99 %" and "Occupy Wall Street" realities Davos has become irrelevant, except for being an exclusive club of talkers enjoying a few days of fresh Alpine air.

    January 23, 2012 at 2:10 am |
  2. Josia Nakash

    So refreshing to see some genuine down to earth truthful reporting from the heart. Unfortunately – you are right about Davos. But even more unfortunate is that you don't realize that you have more power to fix things than all the VIP attendees. At the end of the day it will be up to the media to generate a significant shift in our thinking that will be required to lift us out of the crisis.

    Professor Schwab is completely on target as usual about the great transformation up ahead, but what he doesn't understand is that there will be no job creation in the near future. Society is going through a genuine restructuring and the result will be that tens of millions of people will have a lot of free time on their hands. Rather than filling their heads with all the usual things we have to do everything in our power to raise the satisfaction level of the average citizen through a new education.

    The global integral world is not about the transfer of knowledge or merchandise, but is rather an expression of a new social order the world is approaching. The solution is very simple, but also in complete opposition to our egoistic and private development that we were engaged in until now.

    January 23, 2012 at 2:25 am |
  3. Vidar

    One of the best speeches from last was a keynote address by Khan Manka, Jr. where he basically slammed the whole idea of the Davos World Economic Forum...


    January 23, 2012 at 4:20 am |
  4. Mark M

    Spot on. Hu Jintao famously told Bush that his main worry was 'creating 25 million jobs a year'.

    As tech and robotics develop alongside global outsourcing, jobs will continue to vanish. The 21-hour working week may not be such a bad idea after all.

    January 23, 2012 at 6:00 am |
  5. wasso

    What can one expect from a "jokers convention" ? Perhaps a few laughs with the usual anchors from major networks trying to look important !

    January 23, 2012 at 6:36 am |
  6. Anil

    WEF has been a forum for people thinking there are the power centres of the world. its a forum lof the wealthy and powerful, having a ball with all the partying. Since last few years, WEF has been able to influence nothing, nor create prosperity. If WEF coukld not predict and prevent this global meltdown, they obviously are as clueless as the rest. So just faffing around and adding nothing to the solutions of the world. uglys and igloos are all thats left!

    January 23, 2012 at 7:43 am |
  7. Peter

    Davos has become irrelevant. That may seem rather extreme but facts do support it for, as Richard reminds us, in the last meeting they all agreed about Greece and claimed the Eurofail would soon be fixed. Well if something it only got worse.

    So why do they still come there? I guess it is about hobnobbing, socializing, the feeling of belonging to a plush luxurious private club. Throw in beautiful call girls and it becomes a winter resort.


    January 23, 2012 at 11:32 am |
  8. Cunamara

    The rich and powerful like to hobnob with the rich and powerful, not with us "little people." If they wanted to actually save the world economy instead of just their own, they'd do what needs to be done: raise the incomes of the top half of 99% by at least a tenth and twice that for the bottom 50%, so that we can create consumer demand (supply side economics was a sham and has been exhausted of its utility for two decades or more- demand is the driver of economies). This can only be done by the rich agreeing to take less and to share more in the private sector- ahead of governments which are really incapable of managing wealth redistribution, for all the right wing hand-wringing about this- which will result in the rich having a slightly smaller portion of a much bigger pie.

    January 23, 2012 at 2:57 pm |
  9. legemdfunk

    That's the way it's always been, though. All of these forums have been coming up with short- term solutions that screw up further down the road – like printing money. Have we seen any significant post-Bretton Woods economic structural change? Not really.

    January 23, 2012 at 4:11 pm |
  10. coder

    until the people who attend davos actually start thinking of me
    I wont be thinking of them
    I have zero desire for greed, money or power
    I dont want their religious views corrupting the scenery (the religion of money)

    January 23, 2012 at 4:32 pm |
  11. Abraham

    Davos – WEF, IMF, WB are essentially all part of the coterie protecting the interests of the "super-rich". Just consider the people attending... All the billionaires and their puppets. They can fool a few people for some time, but not all the people all the time. It is foolhardy to think that these "crafty" people will come up with anything significant / compassionate for the world at large? Crafty, because on the one end we have greedy-rich who have sucked the juice, profits, livelihood, health, life's-savings, peace, education, environment from ordinary citizens. And, have pushed the ordinary folk to starvation, dependence, loss of self-esteem, ill-health, bankruptcy, robbed them of education and opportunity, sent their loved ones to war and have left them with cheap-junk food and drinks and polluted air and water. On the other, we have the puppets in disguise who have sucked even the hope from the vulnerable and easily trusting voting citizens. Who are they fooling at the WEF. It was definitely exhilarating to watch the several pompous members driving the ultra-luxury cars on the snow tracks. It seemed a bit like, Nero fiddling, while Rome was burning! Sure, there would be plenty of recommendations for bailouts. Take the had earned money of the poor taxpayer, and pump it into the corporations, so that they could continue their loot, increase prices of products and services, layoff / fire employees, recruit temps, pay themselves billions in bonuses and throw crumbs in the name of philanthropy and feudalistic charity. The air has nearly completely been sucked out. And, every time it is the ordinary citizen who has to take the brunt. The underlying cause is the unbridled greed of individuals and corporates.... simple as that. It is time to set up a WGF – world greed forum, without the guise of doing good for the world. And, it should be held in the refugee camps of Tanzania, Sudan and Kenya. The very same people should share a few days with the children dying of starvation, malnutrition and abject poverty. At least then, we can hope that the eyes of these people living in their fortified castles, will open to compassion. Greed is the problem. While the ordinary folk are struggling to just exist, the corporates and billionaires are reeking in bloodied-billions of profits, income and bonuses. Wonder whether Warren Buffet would ever attend any of these forum meetings! He has got it right. If nations do not recognize the need to grow rich across the spectrum of society, things are only going to get worse. Squeezing every drop from the bottom is only a recipe for strife. And, the time is near, as the bottom is completely dried out. WEF is just a retreat for the neo-royalty to hobnob with their lords.... nothing more. Never has public sentiment been more bitter against the wealthy. Earlier, the world appreciated and looked up to those who created wealth, because they created wealth for all. Today, greed has blinded the wealthy. They have lost their way and conscience. All they can think of now, is layoffs, firing, withdrawing benefits and wage-cuts for employees. Time to rethink the legacy these people will leave behind.

    January 23, 2012 at 10:17 pm |
  12. RogerE

    I think that Abraham is 99% correct. Greed and lack of compassion is the vast majority of the problem. What seems to be missing to me is the relative common sense fact that if the poor and middle classes were better off to any degree, the rich would be the ones to benefit. The idiotic notion of Reagan's trickledown economics is still being espoused by conservatives all over the world. The reality of economics is that wealth is derived from one method and one method only. It is taken small piece by small piece from the masses and is funneled to the wealthy in increasingly large numbers. We can all be poor but you cannot be rich without millions and billions of gullible consumers and workers slaving away making junk that we then pay for in a degraded environment and a hollow, unfulfilling life. In the end as much as I hate to say it, the real blame lies with the people. As the Arab Spring has shown, the only real way for things to change is for the majority to rebel. In this case it is rebelling against the corporation and to stop buying their products. The trap that we are caught in is that if we do that then jobs will be lost as the corporation fails. The only power we then really have is at the ballot box, if we are lucky enough to live in a country where there is one. Problem number two is that we have to choose between two political ideologies that are completely opposite from each other and make no sense in the real world. There are simple solutions out there but we either cannot see, or are not being allowed to see, the forest for the trees. Talk fest like this will never solve anything because the deck is stacked and these people see no real incentive to make a difference. The only way that anything can really be changed is to change the entire financial and economic models that we have been hooked on for the past 500 years, and particularly since the industrial revolution. There is a way forward but it will only take a total calamity before people will even consider revolutionary change. It will have to be forced upon us rather than for us to agree upon the obvious. The way things are going I don't think that the calamity is too far away. The only way to get past it will be the cooperation of the 99% as in reality the wealthy are only wealthy because of what 99.9% has given them. It can be taken away in an instant as can be seen by what happened to Saddam Hussein and Muammar Gaddafi. The rich and powerful are only there because the masses give them riches and power. When we figure out this fundamental truth the world will be a better place.

    January 23, 2012 at 11:12 pm |
  13. peterr54

    You know as well as anyone that Davos Do-Little is merely an opportunity for the 1% to wallow in self pity, to seek "safety in numbers" to offset their fear of the burgeoning OWS anger, but mostly it is a chance to discretely confer with their Swiss bank managers about safeguarding their personal wealth.

    The JP Morgan/Goldman Sachs complots to manipulate the real gold and silver markets, to ward off the imminent implosion of these money makers version of wealth creation and distribution, will soon melt like the Davos snow in the Arab Spring's sun.

    Enjoy the food , wine and alpine air while you can.

    January 24, 2012 at 12:13 am |
  14. Manny Blando

    A week or two ago I woke up with an inspiration... a really common simplistic bunch of ideas that has to do with using today's economic morass to build a more inclusive world market. I tried to capture the same in a simple article, but I am at a loss as to where to pitch these idea to be heard. Maybe if you took a look and read past my naivete, you'd know where to get it appreciated. Davos seems to be a good forum! Thank you. http://www.zumodrive.com/share/frVQYTZiM2

    January 24, 2012 at 3:22 am |
  15. Floyd Burgoz

    Davos is nothing more than a fashion show of who's who of the social elite. I have never been able to believe that a room full of inflated ego's would be able to come up with a consensus on anything but the food and drink menu. Beyond that it is a waste of time to even listen to the televised outcome on the progress of this years initiatives. But in all fairness, has any of the past initiatives ever been implemented?

    January 24, 2012 at 3:37 am |
  16. Floyd Burgoz

    Well said RodgerE...

    January 24, 2012 at 7:26 am |
  17. power4things

    What's to discuss? I think these guys now have gotten everything they want.

    January 24, 2012 at 7:29 am |
  18. Marco Hsiao

    "the future is being shaped in the streets of Cairo or protest camps of Wall Street." In my opinion this is an obvious mistake, because the US media report the US fairly but report foreign countries always focus on diaster, unrest and killing. It conducts to produce this mistake, it is misleading the strategy.

    The future is being shaped in East Asia. Europe's fortune bases on evilest trade and invasion. Ten millions of African black slaves were made, 1/3 of them were tortured to die in Europe's ships, but lies are spoken continually! The immoral Europe also cruelly invaded Africa and some Asian countries to steal resources. But apology and compensation are not done. The Europe could be said as dirtiest continent on violating human right and violating morality.

    Europe is on debt crisis but East Asia is on progress and growing. East Asia is moving to become the new world center, the future dominant power is rising brilliantly; many people still ignore the world has changed.

    January 24, 2012 at 9:58 am |
  19. MLQ

    Beautiful landscape! It looks like a place for holiday! I wouldn't believe that there is an economic forum, but tks to RQ I observed that! :-)

    January 24, 2012 at 11:15 am |
  20. pototoy

    Who exactly is paying for all that fanfare? Swiss banks, or the Davis tourism city council?

    January 24, 2012 at 11:19 am |
  21. Hunter

    In the 21st Century, our world is yet again in a self generated crisis. Whom, do you believe is the cause is insignificant to the solutions to the 'economic' greed; AND the sufferings it causes. Is there a quick fix and a ready made solution? A socialist/ capitalist/ communist model has proven in the last century to supply mixed results. The answer is unfortunately, no. There have always been the 'haves' and the 'have not' in this world; however, does it 'have' to remain that way?

    Looking at the commonality every one shares: WE are born. We learn. We die. That is the state we all must accept; We a learning to ... . Fill in the blank(s), left by the ones before us; in the hopes of a better future, for the ones yet to come.

    What if the world we live in had this simplistic idea (WE are born. We learn. We die.)? How would it be structured? Where would it start? Imagine .... .

    Playing the blame game; OR, the haves, not willing to give to the have not's – to balance the harmonies of this world will not come over night. Much blood and sufferings will occur, before the ones that are left standing realize this fact: WE are born. We learn. We die. Question remains, will this carnage leave a world where the future of humanity can exist; without the cycle emerging again, in another form of 'Master and Slave'?

    January 25, 2012 at 7:54 pm |
  22. sameh

    oh my god these Childrens bewitches miracles


    January 26, 2012 at 4:36 am |
  23. Leroy

    The living on borrowed money, turning a blind eye to corruption, winking at avarice, tolerating incompetent government and being non productive by moving our industry off-shore has damned us to what is to come.

    January 26, 2012 at 10:58 pm |
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