Peering Behind The Davos Curtain

Theodore Roosevelt Malloch CEO, Roosevelt Group
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Did you get your invitation to Davos this year? Thomas Mann, the German Nobel laureate and author of The Magic Mountain, made Davos famous for its mystical and curative powers. For him, it was a sanatorium to overcome the disease and psychological stress and damage inflicted by modern life. In some ways it remains so.

Today Davos is synonymous with a different kind of cult. It is the cult of business celebrity; elites from every avenue of life, every industry, every country, leaders and lots of wannabes, will do anything to be seen there, especially during the last week of January, when the World Economic Forum conducts its annual meeting. It is also the place where Bill Clinton decided, “he could do this, too” and commenced his own boondoggle — The Clinton Global Initiative.

At Davos, they pay over seventy thousand dollars just to be invited; over a million to join. Is it worth it? It has become the hub of political, economic, cultural, and every other kind of power imagined by postmodern man. In fact, it is about the emergence of what the ringmaster at Davos calls “Davos-Man,” a kind ofubermensch that can transform the world. Nietzsche would be proud.

This wasn’t always the case. After World War II the German part of Switzerland in the far eastern part of the land and up in the rugged mountains was underdeveloped. Skiing, new hotels, and better train service brought in more tourists, but it wasn’t until a nutty professor of business policy brought his European Management Forum there in 1971 that it started to take off.

In its own words the WEF is on a mission: the World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional, and industry agendas. Over the course of its history, the World Economic Forum has achieved a limited record of accomplishment in advancing progress on some key issues of global concern. It has also placed itself as the epicenter of globalism — a new ideology.

The WEF logo itself puts the organization in the center of the globe’s sphere; and Professor Klaus Schwab is the “Wizard” of this “Oz,” behind the curtain, who makes the whole thing run — just as in the movie.

Every year now, for decades, high in the wintry alpine resort of Davos-Klosters, Switzerland, the world’s elite convenes under the auspices of the toney World Economic Forum. They have what is termed “convening power.” It’s all over the news for about a week. But not much is really known about the organization, or its leader — the convener. Everyone sips schnapps and talks about the future of the globe under the banner “Rethink, Redesign, Rebuild.” The Re-word is always the operative phrase! Be sure to use it in every sentence and you can pass Go and hear some swami on new ageism or join Angelie Jolie in a wooden hot tub.

True, Davos can be cynical and trite, and the best thing to be said for it is perhaps that it does not believe the answer to the world’s problems is more Marx. But they at times come close. Davos phrases abound: Rethink economics, redesign governance, put (European) values back in business, promote financial literacy, the future of this and that, risk abatement, go on and on … Frankly, while the WEF is full of suggestions, most of them are half-baked.

Here is a sample insight from Davos: “At times of panic credit markets have a tendency to freeze.” Here is another: “The bubble forms when expectations exceed reality.” Cue the applause from the civics class.

The WEF applauded the public rescue of banking and government-inspired guarantees (bailouts), and their mantra has been “print more money” and, when in doubt, “strengthen regulatory measures.” We also need much more “coordination” to defeat systemic risk, according to the Davos line. Did Keynes really get it right? Is Big Government good government? Do markets always fail when left to their own devices? These questions are verboten in Davos—  for the hallmark of all believers here gathered is that government is the solution — perhaps assisted by some special council, formed of course by “FOK” — friends of Klaus (Schwab).

Davos wants to tame the “animal spirits” of the market, which are not good and must be brought to heel. Their authority on this is none less than the turncoat, George Soros, a former robber baron and green mailer who saw the light. Stakeholder capitalism enters left stage, with improved statistics, and a Sarkozy–style Commission on Measurement of Economic Performance and Social Progress. We can modernize accounting and have a perfect “global solution” — a super-International Monetary Fund. At Davos it is always a globalist solution. Besides dumping the dollar, the world must also have “international consensus” since the United States has been so naughty and learning to share power and give up control can be difficult. But it is necessary.

For Davos-Man (and occasionally now a woman or two), an all-powerful global central bank will run money, ignoring notions of national interest; but like gun ownership, the spread of capital will also need to be controlled. We will also need a Tobin carbon tax collected by the UN. Bill Gates’ version of so-called “creative capitalism” flies well here, and he goes to Davos every year — where he preaches that we must all “give back” and invest entirely on a social basis. His zeal is perennially featured now that he’s retired from bad old Microsoft and made his monopolist fortune.

Ironically, in the end at Davos — powerful and lucre filled as it is — money is the great taboo; it’s what leads to subprime lending and to bad capitalism. Realizing that the love of money is the “root of all evil,” a “competent global economic citizenry” must fight the inherent flaws of capitalism. If we don’t fight capitalism, we are warned, we could end up with Chinese-style authoritarianism.

At Davos, it’s repeatedly said, we can’t do “business as usual” any longer, and most certainly America, who started all this money madness and interventionism, cannot dictate since the United States is no longer a “hegemon.” A thin veil of anti-Americanism lurks behind almost all the content at Davos. It is a cabal of multilateralism with a nutty professor as its progenitor.

It’s interesting to note that, through all the sermonizing and flagellation at Davos, short shrift is given to the classical virtues and market-based solutions. Instead, the underlying credo here is the need for more confidence in global government, since finance is an imperfect tool for managing risk in an uncertain world.

I went to Davos as a special guest of Herr Dr. Schwab for the first time in 1988 and then served on its executive board. It was fascinating and certainly involved many leaders and business types, mostly from Europe and especially the Third World. Some were on the make and others on the take. Schwab invented a real shakedown. Of the rich and famous.

Now, I was warned that Schwab used people, ran through directors like water, and was a first-class name-dropper. Some said there had been no substance in his doings, just frills — a media fest. He was a pompous windbag to others..

In checking him out I found out some things I didn’t like. He was German (born in Ravensburg, 1938 where Hitler had come to power), not Swiss, reportedly with strong ties to those who fled to Switzerland. Like Waldheim, he had Nazi-youth in his resume and tried to hide it. Davos has always been known as a place for the rich and the sick; that much is well established. Apparently not much has changed!

Did you know that the Nazi Party in Switzerland was headquartered there? In 1936 a famous assassination of Wilhelm Gustloff, the top Nazi in all of Switzerland by a Yugoslavian Jew named David Frankfurter was in all the international headlines and made the Nazi machine irate. The Nazi connection in Davos is noteworthy given the now-established Swiss complicity in the German war effort, hidden accounts, stolen goods, holocaust victims and the anti-Zionism that continues to this day. The World Economic Forum even in recent years has itself called for the boycott of Israel (before it retracted it). Schwab was also in total cahoots with the Swiss government. In fact, the Swiss Federal Council paid many of his bills.

Why? Because the undisclosed WEF strategy was to get people to Switzerland to invest there, to bank there, and to use its central location and supposedneutrality. It is all a clever public relations tool or ploy for the Swiss and a cash cow for WEF. The colorful Mayor of London, Boris Johnson, called Davos “an orgy of the audacious.” That it may be but its lack of transparency and nexus for the flow of deals, cartels, and brokering makes it the world’s ultimate bazaar.

Theodore Roosevelt Malloch’s new memoir, Davos, Aspen & Yale: My Life Behind the Elite Curtain as a Global Sherpa was released in January, 2016.