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Davos 2015: Less Innovation, More Regulation, More Unrest. Run Away!
Freshly Exhumed writes: Growing income inequality was one of the top four issues at the 2015 World Economic Forum meeting in Davos, Switzerland, ranking alongside European adoption of quantitative easing and geopolitical concerns. Felix Salmon, senior editor at Fusion, said there was a consensus that global inequality is getting worse, fueling overriding pessimism at the gathering. The result, he said, could be that the next big revolution will be in regulation rather than innovation. With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people's mind, the world's super rich are already preparing for the consequences. At a packed session, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. "I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway," he said. Looking at studies like NASA's HANDY and by KPMG, the UK Government Office of Science, and others, Dr Nafeez Ahmed, executive director of the Institute for Policy Research & Development, warns that the convergence of food, water and energy crises could create a "perfect storm" within about fifteen years.
Now that they've got theirs, it's fine if regulations hold back everyone else.
The rich and powerful run the world. They don't. They react to the world just like everyone else. These guys all have to react to the free market to keep their money. They aren't in the driver's seats and they never were.
And they do not even control their own assets, those are managed by other people. And when they go to enact their ideas it often ends up like Virgin Galactic.
Davos is a solipsist beauty show.
I'm not introducing a class-warfare argument, I'm dismissing the idea of class entirely as a component of change.
Smart phones, YouTube, Amber Alerts, standardized tests, vaccines, real-time communications, drunk driving laws, civil rights (or whatever your random list of important things in the last 50 years) --- name one that came from a wealthy pompous guy? Maybe some BECAME wealthy pompous guys as a RESULT, but they were not wealthy pompous guys at the time.
Priest: "Universe from nothing, no laws of physics, sped up time"+ huge discrepancies. Creationism? No. Big Bang Theory
A bunch of rich people with no real military protecting them will be like ripe fruit for the picking (as they have been over and over and over for centuries).
They would really be much better served by being in a functioning healthy country. Give up 10% of their money to taxes and spread it around the population and they will be immeasurably safer.
But I think their greed just gets the better of them. As it has over and over and over for centuries.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
BBC had an interesting factoid on where "the 1%" live and what it takes to be in the 1%. It seems it takes a net worth of around $800K to be in the richest 1% of the world's population and a net worth of only $77K to be in the top 10%. The research was done by Credit Suisse and interpreted and reported by Oxfam with the Beeb boiling it down to the linked factoid.
Put your pitchforks and torches away mates unless you want to stab yourself with your own pitchfork and then burn down your own castle. "They" is us. Yep, there are a few people with more but a whole lot more people with a whole lot less. And I bet you didn't even know you were "rich."
Cheers,
Dave
They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.
Ben
If you think the Democrats would cause any significant problems for their super rich patrons, you are a fool. Both parties are puppets that dance to the tune their pipers play, and we pay the price.
A wealth manager for very wealthy makes a distinction between top 1% and top 0.5% (8 million according to IRS and 15 million according to the Feds). The top 0.5% is reached only by people with inherited wealth, or very lucky people who get to top 5% by smartness and hardwork, and end up in 0.5% due to good fortune, or stock options. Professionals, doctors, lawyers, accountants are very unlikely to reach top 0.5%, and increasing not even likely to reach top 1%. He used to see very successful professionals retiring in top 1%. But no longer.
He calculates that a person starting at low end of 1% by income for that age group, and staying at the same band (99% dividing line by income) all his/her working life will NOT end up in top 1% by financial wealth. A persons starting in the low end of 1% by wealth, will stay there if he/she draws the same amount of money our 1% by income professional, and might go up in scale.
In USA money earned by blood, sweat, tears and brains (wages, earned income) is taxed at much higher rate than money earned by money (capital gains, carried interest, qualified dividends, etc). This is the root cause of the inequality. For 30 years, since Reagan, the US Govt has been coddling the super rich by funneling all tax relief to them. They turned their back to the USA, invested all the savings in low wage countries to maximize their profits.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
I think the problem is you can't pack up a whole economy and move it.
If your wealth is dependent on the US domestic economy and it tanks because of civil unrest, a lot of wealthy people will be unwealthy before they can even reconsider relocating.
There's also the question of "what is money?" and are you really rich still if you have to convert your money to another currency with a different local buying power, especially if your native currency dives or is sinking when you try to convert it.
There's also the question of competition for safe overseas havens; if the availability is limited, you're now competing with just the rich, so unless you're elite rich, you may lose out altogether.
And what kind of haven are you expecting? A self-sustaining kind of pre-20th century British estate of farms and light industry? At the end of the day it sounds like a mash-up of a Ralph Lauren ad with survivalism.
Regulation IS the problem. Had we done the principled thing and let AIG and Goldman burn when the time came it would have taken lots of big finance with it. There would have been plenty of churn as far as just who the 1% are. I would even guess some of them would have been left with less than nothing.
Oh but they would still have all kinds of physical property and hard assets. Yes but assets sometimes have a funny way of turning into liabilities when you don't have the case flow to manage them properly. Just imagine if you can't pay your home owners policy on your Mansion you can still get sued when someone breaks their leg while trespassing.
These guys are where they are entirely because of governments and regulation. Income inequality is greater than what existed in the gilded age! These levels of inequality are made possible by regulation and free market impediments, not for lack of them.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
If you think the Democrats would cause any significant problems for their super rich patrons, you are a fool.
Except the last time the Dems controlled congress, they passed a health care reform law that transferred billions of dollars from the rich to the poor. They also tried to raise capital gains taxes, which would hit the super rich hard.
Both parties are puppets that dance to the tune their pipers play, and we pay the price.
The parties have clearly different agendas. I know it is popular on Slashdot to say we are all just helpless sheep, controlled by the strings pulled by the "Super Rich" Illuminati or Elders of Zion, or whatever, but that is nonsense.