How Inequality Hurts

The Global Wealthy Ride to Our Rescue

At Davos last week, the world’s rich and powerful took a crack at problem solving. But they came up short. The main reason: They are the problem.

By Sam Pizzigati

Russian Prime Minister Vladimir Putin delivered the opening keynote address last week at the annual World Economic Forum high in Davos, Switzerland, before an elite gathering that included a record 1,400 CEOs from around the world and over 40 heads of state.

Putin fit right in. His remarks would strike all the right notes — and anticipate the themes that would bounce around throughout the forum’s five days.

Only “mutual trust,” Putin would assert, can bring the world out of global economic meltdown, along, of course, with an ongoing commitment to making the world safe for big-time investors.

“We are convinced that those who create attractive conditions for global investment today,” Putin declared, “will become the leaders in restoring the world economy.”

And creating those “attractive conditions,” Putin would explain to a reporter who asked him “if the shrinking number of billionaires was a positive to be taken from the credit crisis,” means keeping the world a place where grand fortunes can continue to accumulate.

Putin has had run-ins, over the years, with several Russian super-rich “oligarchs.” At Davos, he vigorously protested his image in the West as a “billionaire slayer.”

“It was never my goal to stamp out billionaires,” Putin pronounced, adding that should anyone, acting within the law, gain a billion or two, then “God bless him.”

The Russian prime would not entertain, even for a moment, the possibility that the chase after billion-dollar fortunes may have somehow contributed to the global economic meltdown. Neither would any other mover and shaker at Davos.

The forum’s endless panels and speeches systematically ignored the impact of grand accumulations of private wealth on the world economy. One session did promise a look at “Hard Lessons about Global Imbalances,” but the “imbalances” in question turned out to revolve around currency reserves, not top-heavy concentrations of income and wealth.

Forum organizers titled another session “Threats to Society.” Did inequality count as a “threat”? Not quite. The panel looked instead at “illegal drugs and counterfeit goods,” the global increase in “illicit activities and transnational crime.”

This studied silence on the concentration of the world’s wealth should hardly qualify as any sort of surprise. That wealth, after all, has been concentrating in the pockets of the same wealthy who drop in on Davos every year. These exalted souls could hardly be expected to acknowledge the consequences of their own fortunes — and how they’ve amassed them.

But those consequences remain the biggest hurdle to global economic recovery. A world where wealth has tilted overwhelmingly to the top, where average people must go deep into debt to get by, where grand fortunes translate into the political power that stymies needed reforms, will forever be unstable.

At Davos, the rich and their retainers did their best to fudge that reality. They worked hard to strike a sober, problem-solving pose. They spent less on parties. One top global public relations executive, Howard Rubenstein, even suggested that business leaders should pay, out of their own pockets, for the half-hour helicopter ride from the Zurich airport to the Davos snowy slopes.

“They should avoid anything that appears super fancy or super rich,” the PR expert explained, “or thumbing their noses at taxpayers during a time of austerity.”

On that score, the world’s bankers and corporate leaders succeeded last week. But they still face a more daunting task: reclaiming their credibility in a world no longer so easily vowed by riches and those who hold them.  

“The wealth creators of recent years,” summed up two British journalists covering the Davos scene, Ashley Seager and Larry Elliott, “have suddenly become the wealth destroyers.”

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.

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