Davos applauds while Donald Trump celebrates a “roaring geyser of opportunity.” But in the United States and most of the rest of the world, few people are feeling any spray from a “roaring geyser.” How few? One answer — from the global research firm Edelman Intelligence — came just before this year’s Davos celebration opened.
Edelman last fall surveyed over 34,000 respondents across the world and found a “growing sense of inequity.” In developed nations, details a new Edelman report, less than a third of families see themselves as better off five years from now. Over three-quarters see elites “getting richer while regular people struggle to pay their bills.”
The super rich who fly their private jets into Davos every year and most of the rest of humanity simply live in two extraordinarily different economic universes, the one a world of wealth, the other a world of work. In the world of work, people depend on their sweat and skills to put food on the table and roofs over their heads. If they want to afford more and better, they put in extra hours. They take a second job.
In the world of wealth, the rich don’t have to work ever harder to see their net worth spike. They let their assets do the heavy lifting. Sitting on those assets — their stocks, bonds, real estate, and businesses — brings dividends, interest, rent, and profits. Selling those assets brings capital gains income.
A truly sweet deal. A perpetual wealth-generation machine that swings into motion, as Seagrams heir Edgar Bronfman once related, for anyone who can afford to enter the world of wealth.
“To turn $100 into $110 is work,” observed Bronfman. “To turn $100 million into $110 million is inevitable.”
But added millions only become dependably inevitable when government helpfully greases the skids for wealth’s unfettered accumulation. And governments do that all the time, by everything from taxing the rich at rates that leave them barely inconvenienced to undermining worker rights to bargain collectively for a fair share of the wealth they create.
Donald Trump has done plenty of that greasing — and made himself indispensable to the Davos crowd in the process. The global mega rich once saw Trump as a “great disaster,” and now, says Niall Ferguson of Stanford University’s conservative Hoover Institution, “they’re all a great deal richer than they were back then.” These rich don’t want the Trump boom to end. As Ferguson puts it: “The dirty little secret of Davos 2020 is they all need him to get re-elected.”
Not all the rich, of course, feel that way, and one group of more egalitarian-minded people of means — the U.S.-based Patriotic Millionaires — took their message to Davos Wednesday. In an open letter entitled “Millionaires Against Pitchforks,” the group decried the “epidemic” of tax evasion by the world’s wealthiest and called extreme wealth “a sign of a failing economic system.”
“For that reason,” the Patriotic Millionaires open letter to Davos 2020-goers continued, “we urge you to step forward now — before it’s too late — to demand higher and fairer taxes on millionaires and billionaires within your own countries.”
Added the letter’s 121 signers, a cohort that included a former Unilever CEO and Disney heiress Abigail Disney: “We make this request as members of the most privileged class of human beings ever to walk the Earth.”
