Davos Goes Green: The Latest Empty Gesture
A Disturbing Pattern
While it may not do much for the environment, the Davos limo decision is a good metaphor for governmental responses to the banking crisis. A year ago, the forum was dominated by political leaders: many of the world's top bankers begged off, noting that they were looking for work or desperately trying to hold on to their jobs. Citigroup's (PCO) Vikram Pandit, for example, skipped out on the summit, claiming "other commitments." Given worldwide anger at the banking industry, the decision to avoid facing the music was understandable.
Oh, what a difference a year makes. On the surface, the Davos forum's decree sounds like a repudiation of the excesses that led to the current economic crisis: Professor Klaus Schwab, the forum's founder and executive chairman, recently said that conference participants will "rethink our values . . . redesign our processes . . . and rebuild our institutions." He goes on to note that the forum will also address the crisis in Haiti and promote "corporate global citizenship."
But the bankers don't seem to be on the same page. Despite outrage over bonuses and revived profits, business leaders seem eager to regain their place at the head of the pack. In The New York Times, Schwab spoke of the changes since 2009, noting that, "Business leaders were under shock and passive . . . This year, they want to be integrated again."
Part of that transition back into the driver's seat will involve pushing aside the bears who were the stars of last year's conference. These pessimists, most notably Nouriel Roubini, are cautioning that the current recovery is tenuous, and that there will be an economic slowdown in the second half of 2010. But, as was the case before the recession, investors aren't eager to hear bad news, and it already seems like Roubini -- along with fellow bears George Soros and Joseph Stiglitz -- is preaching to an audience that has its hands clasped firmly over its ears.
One of the most popular phrases of the last year was that one should "never waste a good crisis." But, with unemployment rates on the rise in most states and profits on the rise on Wall Street, it seems like we have done just that. And, much like Davos' halfhearted green initiatives, business regulation may be just strong enough to annoy the elites while being far too weak to enact any real change.