January 24, 2020


The annual meeting of the World Economic Forum (WEF) kicked off on Tuesday in the ski town of Davos… Greta Thunberg and U.S. President Donald Trump dominated as they both attempted to frame arguments around climate change… Trump backed a tree planting initiative and dismissed the ‘perennial prophets of doom’ on climate change.’” Reuters

“U.S. Treasury Secretary Steven Mnuchin told Greta Thunberg on Thursday she should study economics, a jibe which prompted the climate activist to say she did not need a degree to know the world was not meeting its climate targets.” Reuters

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From the Left

The left applauds the focus on climate change and economic inequality, but worries that attendees will not match their words with actions.

“For companies to convince people around the world, especially the young, that capitalism is viable, business leaders need to show that they’re making hard decisions… Already there are concerns that new lower estimates for global growth by the I.M.F. could undermine some corporate commitment to climate-change initiatives… In its embrace of both Mr. Trump and Ms. Thunberg, the Davos set seems to want it all: lower taxes and a climate-friendly agenda. But that dance is increasingly straining the patience, and trust, of the rest of the world.”
Kevin J. Delaney, New York Times

“Without some way of distinguishing real change from cheap talk, cynics will continue to see [the WEF] as a grand exercise in hypocrisy. Or, perhaps, an excuse for governments not to do their job, because, hey, I was at Davos and the private sector told me they’ve got it all taken care of. The remaking of capitalism is an important and fragile undertaking, because it is hard to be the nice guy if your competitor is still playing by the old rules. That’s why, without some carrots and sticks, stakeholder capitalism will always be at risk of being a fad, an appeasement, as opposed to the deeper transformation it might become.”
Tim Wu, New York Times

“It’s hard to see how [the current] pace of earnings growth — and the return from stocks by extension — is sustainable if companies decide that shareholders are no longer their only concern. Sure, some efforts to broaden the base of stakeholders may contribute to future growth, or at least not detract from it. Germany, for example, has a decades-old tradition of co-determination in which workers are represented on corporate boards, and German companies have generated higher earnings growth than their U.S. counterparts since Germany enacted co-determination in 1976…

“But the scale of the problems contemplated at Davos this week is likely to require more drastic intervention… There will be no shortage of observers calling the gathering at Davos an empty gesture this week, but the billionaires are right about one thing: Ignoring inequality and climate change is no longer an option. Now let’s see who’s willing to pay for it.
Nir Kaisser, Bloomberg Opinion

The harsher critics posit that, “Quite often, and certainly when Trump first entered the White House, the tension between him and the Davos crowd was pitched as a great first-principles clash between reactionary nationalism and multicultural globalism. But in truth, this was largely a war between intellectual fads — one that hid a far more important commonality between Trump and the Davos set. Namely, both sides share a basic assumption that business leaders and wealthy investors (which of course includes the Davos elites themselves) are the most important and valuable participants in economic life…

“The Davos crowd may grate at Trump's nationalist rhetoric; they may be horrified by his reactionary cultural stances; they may even disagree with him on climate change. But at the end of the day, they know who will defend their place atop the mountain.”
Jeff Spross, The Week

Regarding the Treasury Secretary’s comment about Greta Thumberg, “A good question for Mnuchin and other Republican Party policymakers probably is: Why don’t you listen to what economists have to say about climate change… For economists, the gold standard of climate policy continues to be the idea of taxing carbon dioxide emissions. That was the point of a January 2019 letter signed by thousands of PhD-wielding economists, including more than two dozen Nobel laureates, all four living former Federal Reserve chairs, and Treasury secretaries and Council of Economic Advisers chairs from both parties…

“If you are going to run around the world lecturing people about the need to take economics classes, you should familiarize yourself with the baseline consensus in the economics profession…

“It would genuinely be an incredibly constructive step for Mnuchin and other GOP leaders to do what they’re suggesting Thunberg to do — listen to economists and espouse moderately aggressive, market-oriented solutions to the climate problem… instead, the current government is doing less than nothing to reduce emissions, even as it smugly lectures others about the need to listen to experts.”
Matthew Yglesias, Vox

From the Right

The right accuses Davos attendees of hypocrisy and criticizes Thunberg’s policy suggestions.

The right accuses Davos attendees of hypocrisy and criticizes Thunberg’s policy suggestions.

“Marie Antoinette and her friends dressing up as shepherdesses to celebrate the simple life has nothing on the more than 100 billionaires descending, often by private jet, on an exclusive Swiss ski resort for four days of ostentatious hand-wringing about the problems of the poor and the dangers of climate change. This year an earnest young aide at registration told me that, to reduce the event’s carbon footprint, no paper maps of the town were being distributed; one could almost feel the waves of relief from the nearby Alpine glaciers at this sign of green progress…

“If the WEF has a single guiding vision, it is the belief that technocratic competence plus a modicum of goodwill can find win-win solutions to the increasingly complex problems of our time. This has been true for many disputes between nations; it has been true for disputes between business and civil society. Over the decades, the WEF has sought with some success to be a place where these conversations take place. But does that logic still hold? All the panels in the world can’t stitch up the rift between the U.S. and China, integrate Mr. Putin’s Russia into the West, or even deter Turkey from acting on its neo-Ottoman aspirations.”
Walter Russell Mead, Wall Street Journal

Despite the attendees’ professed support for liberal causes, “‘The dirty little secret of Davos 2020 is they all need [Trump] to get re-elected,’ [Niall] Ferguson, Senior Fellow at Stanford University’s Hoover Institution, told Yahoo Finance’s Alexis Christophorus, when asked if wealthy attendees are begrudgingly rooting for President Donald Trump. ‘Nobody wants to say that out loud.’...

“Ferguson said the attitude marks an about-face since the last time he attended Davos in 2016. ‘Almost nobody gave him a chance of winning the nomination, much less the presidency. And then the following year, they were all in a state of trauma because he won against their expectations, and they thought that was going to be a great disaster as a result, and they’re all a great deal richer than they were back then.’”
Alexis Keenan, Yahoo Finance

“By the time Trump took to the podium to declare the U.S. economy ‘stronger than ever before,’ he had already secured at least one significant international accomplishment: The United States and France agreed to a cease-fire in their negotiations over taxing American digital companies…

“Now other countries will need to think twice about attempting to undermine international negotiations with their own tech taxes. This dilution of tensions this week is a huge win for America. Tech companies will be safe from France’s discriminatory tax for at least the rest of the year, while the industries that would have been impacted by a 100% tax on French imports can also breathe a sigh of relief.”
Mattie Duppler, Washington Examiner

Regarding Thunberg’s policy suggestions, “What [she] is counseling—real zero, i.e. an immediate end to the use of all fossil fuels—would, if enacted, destroy the world’s economy overnight. What Thunberg doesn’t seem to grasp is that a significant portion of that energy goes toward things we would miss rather desperately, things like food, heat, light, etc…

“Just to pick one obvious example at random from the seemingly endless pile, trucks are used to transport food from places like California’s central valley to store shelves in San Francisco and Los Angeles. What happens when there is suddenly no more diesel fuel for those trucks? You simply can’t cut off the transportation of food with no alternative on hand… What happens to the electricity that powers homes and industries (and electric cars) when power plants suddenly can’t purchase natural gas to power the turbines? About a third of US electricity generation is powered by natural gas (as of 2018).”
John Sexton, Hot Air

Dated But Relevant: “Greta Thunberg is the leading edge of a youth movement against climate change — including a global ‘climate strike’ last week — that is being promoted and celebrated by adults who find it useful for their own purposes… [but] There’s a reason that we don’t look to teenagers for guidance on fraught issues of public policy. With very rare exceptions — think, say, the philosopher John Stuart Mill, who was a child prodigy — kids have nothing interesting to say to us. They just repeat back what they’ve been told by adults, with less nuance and maturity.”
Rich Lowry, National Review

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