They may be rich, but they’re not stupid….
Today’s billionaires are feeling the heat. This past week, seventy billionaires made their way to the Swiss mega-resort town of Davos to strategize the 2012 global economy. Every year at this time, the money elite take their place at the top of the eco-pyramid for an “I’m Richer Than You” power fest in the snow-capped Swiss Alps. It’s the Oscars for the world’s super-rich. Only the prize is being there and perhaps garnering the best party invites.
Just a few Gordon Gekko-George Doubleya years ago, Davos was the bastion for the “have most and want more” privileged elite. A playground for the world’s wealthiest bankers and moguls to stroke each other’s egos, strut their material boy stuff across the tarmac and break out the $10,000 champagne. Well, they might be sipping champers behind closed doors, but this year’s mega-moguls care. They really do. About what you might ask? Money..? Well yes, natch. But that’s not all. They care about you, me and Occupy too.
2012 has ushered in a whole new era in international finance, as the upwardly gilded tell an angry world, “Don’t hate me because I am filthy rich. It’s not my fault!”
Well, the truth is it’s not their fault that the world is in economic chaos. Mostly at least….They didn’t cause the chaos. They aren’t even the 1% or the .01%. They are the .001% and control much of the world’s largesse. They can’t help it if they are good at accumulating billions. We each have our talents. For some people like George Soros, everything they touch is gold. (No pun intended.) They didn’t fell the world; they didn’t destroy the economy. All they did was make money the old-fashioned way: through investment and speculation.
As strange as it might sound, the world’s richest have been trying to prove for the past few years they are not the world’s greediest. Ever since Bill Gates announced he would step down from his Microsoft throne and join forces with folksy Warren Buffett to donate billions to social problems, the money world has paid attention. All of that, however, was before the financial crisis melted away fifty years of civilized prosperity. The crisis brought with it greater social problems than we have seen in decades: increased homelessness, joblessness, widespread hunger, violence and that scary “R” word: “revolution.”
Occupy Your Mind
Perhaps some of the world’s richest read their history books and feel a tinge of tightness around their necks at the thought of public antipathy. The twentieth century brought with it the Russian Revolution, the spread of communism, fascism, Nazi Germany, Middle East turmoil and two World Wars…much of it was caused by economic hardship and inequity. Nothing will make human beings angrier than hunger. Watching loved ones starve, losing one’s home and long-term unemployment can transform anger into rage. We need only to remember the recent Arab Spring and closer to home Occupy Wall Street.
The Occupy movement has quieted lately, mostly finding its voice on WBAI in New York and across the web waves. But if you think it’s gone – think again. Warm weather, continued economic challenges and a contentious American election will oil the gears for what is sure to become “the American Spring.” Mark my words: Occupy will return to center stage and this time it will be bigger than before. Why? Because nothing has changed. In the minds of those who call themselves the 99%, the rich are getting richer and the poor are getting poorer. OccupyWEF has set-up camp in “igloos” on the outskirts of Davos and the B people (billionaires) have noticed.
An Indian real-estate magnate said, “Many who will be in Davos are the people being blamed for economic inequalities…I hope it’s not just about glamour and people having a big party.” It is fairly certain the WEF crowd hosts a few good bashes, even if the per person meal ticket is greater than the average American family’s monthly food budget. Yet common sentiment among the moguls is that the wealth divide is a discussion worth having. A gazillionaire software maker warned that ignoring the problem would make matters worse. “If we don’t take cognizance of it and try to solve this problem, it can create a chaotic upheaval globally.” Another mogul urged business and political leaders to focus on “a more just distribution of wealth” to stabilize the global economy.
Let Them Eat Cake
The Arab Spring and Occupy Movement that followed have indeed changed the conversation about the perils of the wealth divide. In the State of the Union address, President Obama spoke of the need to create a better economic system where all Americans get a “fair deal…and everybody plays by the same rules.” “These growing inequalities are not acceptable,” warned another mogul. “The rich have done much better than the poor, and that creates problems.” Perhaps they are worried about their own necks- literally- but the world’s .001% ironically seem to be more enlightened about the dangers of inequity than their Big Banking peers.
The usually smart Jamie Dimon, CEO of JPMorgan Chase told a December 2011 investor conference, “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it.” The New York Times reported that same month that the Fed gave JPM $30 billion to absorb Bear Stearns, “in addition to the $29.5 billion in assets purchased by the Fed from Bear to assist in the buyout by JPMorgan.” That’s sixty billion big ones and that doesn’t include subsidies to acquire bucket shop mortgage lender Washington Mutual or the near zero percent access to capital and credit for all big banks.
Dimon whose government subsidy entitled him to a $23million salary and bonus may not understand the outrage over playing by different rules, but everyone else does. Denis O’Brien a telecom billionaire summed up the 99’s anger against Dimon’s peers, “They believe the financial community has behaved abominably, and some of them have.” While it may not be reasonable or rational to fault the world’s rich, most people agree the global economic turmoil can be sourced directly to America’s mortgage banking collapse.
Forward thinking Klaus Schwab, founder of the World Economic Forum, declared he is “a deep believer” in free markets, but added that “free markets have to serve society.” Schwab claimed that the wealth divide reveals a “lack of inclusiveness in the capitalist system.” The scholar said simply: “We have sinned.”
To right those great wrongs he invited all attendees as well as OccupyWEF to brainstorm solutions. “Everybody who could make a constructive proposal is very welcome. We need new ideas.” The Irish billionaire O’Brien came up with one solution, “Corporations need to engage in giving a chunk of their profits to social issues.” The billionaire businessmen at this year’s Davos are emerging with a new operating strategy for the world’s 1%: With great privilege comes great responsibility.