Stephen Adler is Business Week’s editor-in-chief and he has these observations about Davos:
The key messages that seemed to flow from four days of speeches, panels, “bilaterals” (i.e., chatting with someone), cocktail parties, and press briefings were these:
1. Everyone stupidly failed to see the financial calamity coming except roughly four economists who now must be heeded in everything they say and all they predict.
2. The private sector has ruined the global economy and can no longer be trusted.
3. Government is ascendant, with regulation closest to godliness.
4. These conclusions are correct and will stand the test of time…
The conventional wisdom at Davos in 2007 was that private equity and hedge fund managers were the new power players and therefore knew more than everyone else. The conventional wisdom in 2008 was that sovereign wealth funds were ascendant and would be exerting enormous influence over global businesses…
Those who predicted collapse are now doubling down and predicting deeper collapse. Their reasoning turned out to be right in 2008. But investing and team sports remind us that last year’s winners are often this year’s losers. Just ask commodities investors or New York Giants fans.
Predictions are often a fool’s game, but it’s a near certainty that the government is going to use this occasion of woe to extend its influence, probably with as many harmful unintended consequences as in its last foray of this magnitude.