The Decline of Davos

When I try to bring up a mental image of Davos Man these days, I envisage a bruised and beaten Danny Aiello at the end of Leon (aka The Professional), telling Natalie Portman that he’s the best place for her to keep her money: "Like a bank, you know,

except better than a bank,

because, you know,

banks always get knocked off."

John Gapper, today, says that the Satyam fraud "may take some of the gloss away from the India/Davos axis"; the fact is that the entire schmooztastic gabfest has lost most of its gloss over the past 12 months. Since Davos is dedicated primarily to extolling the wonders of globalization, I wonder what it will be like this year.

Much of the present economic nightmare can be blamed on globalization, I think: it was the global liquidity glut, and the concomitant demand for a bit of extra yield on fixed-income assets, which encouraged the lax subprime underwriting which etc etc. If the world hadn’t been perfectly happy to throw trillions of dollars a year into America bottomless appetite for capital, the bubble would never have happened, and neither would the subsequent bust.

What’s more, the financial crisis has actually helped the world’s not-rich, by bringing down food prices, commodity prices, and inflation, much more than any high-concept "creative capitalism" or the suchlike has ever done.

Of course, it’s easy to forget such concerns when you’re whizzing down a black run in Klosters or hitching a ride on a Google founder’s private jet. But Davos needs to preserve its relevance, otherwise it will wither away, an artifact of the bubble years. And it’s not obvious how it can do that.