There has been much hand wringing here about the specter of protectionism, and in particular about the "Buy American" plan in Barack Obama's $819 billion stimulus package, which passed the House of Representatives this week. The fear is that it will trigger a round of protectionist policies in countries throughout the world, and it only added to the sense of economic gloom that has pervaded this year's forum. But there is one bright spot amid the despair: executives here from the renewable energy sector are confident that business will be just fine. After all, built into the stimulus package are billions of dollars worth of tax credits and incentives for solar, wind and other alternative energy companies.

There were two views on Russian Prime Minister Vladimir Putin's speech at the World Economic Forum Wednesday evening. The first, expressed in this morning's International Herald Tribune, was that Putin "struck a conciliatory tone" with the West, talking about "mutual interests" and "mutual dependencies" rather than pounding the drum against the West. The second is that the speech was essentially a pack of lies coming from a man who has proved time and again that any talk of mutual dependence and foreign investment masked the vast human rights abuses in his own country, a history of pushing foreigners out and his aggression toward neighbors and other world leaders. According to the Financial Times, he "mocked the American delegates" in attendance.

Both views are wrong. If anything, Putin's speech yesterday was surprising because he had an audience of some of the most important people in the world, yet managed to say virtually nothing that hadn't been heard before. He sounded familiar themes about energy security, the need for regional reserve currencies and his desire to build new international structures that are better equipped to deal with the crises like the one now at hand. Indeed, his only tough remark was aimed at Michael Dell, in response to a question from Dell about how his company (and the technology sector more broadly) could help Russia. "We don't need help. We are not invalids," Putin said.

But those who walked away with the view that Putin's tone was either conciliatory or mocking missed the point of the Russian prime minister's speech altogether. What he was stating in bold, sometimes blunt terms, is his view that Russia is a big, confident player in the world and therefore ought to receive respect from other sovereign nations. In this view, what's needed to solve Russia and the world's problems is more cooperation among all the big countries -- Russia included. In other words, as Putin told Dell, Russia does not want "help"; it wants its interests to be understood and taken into account. A simple message, and those who try to read more deeply into it do so at their peril.

See text of Putin's remarks after the jump:

At a large mid-day session hosted by CNBC’s Maria Bartiromo – think of a combination of the old Phil Donahue show and a hanging party – groups of Davosers (Davosites?) sat around tables and tried to affix blame for the debacle. The group was asked to assess questions such as: What was the greatest market failure? And what was the greatest regulatory failure. There was a lot of talk about failed models and regulatory regimes with poor incentives. But there was little talk of who was to blame.

At one point, somebody stood up and said, “It’s intriguing nobody is to blame. In other industries, there are consequences if you make toxic products that hurt people. Policy makers need to make it clear that there are serious consequences for that type of behavior.”

Big applause!

And yet aside from the odd mention of Alan Greenspan and an oblique reference to Robert Rubin, the former Treasury Secretary who became a senior executive at Citigroup, there was little talk of individual players who bore responsibility. Of course, you can make the case that the people who caused the damage have been punished: they didn’t’ get to go to Davos this year. Last year, Davos was thick with investment bankers and hedge fund managers. This year, the only true Wall Street bigshot I’ve seen is Stephen Schwarzman of the Blackstone Group.

As I prepare to head off to Davos tonight, there are two main items on my agenda: (1) find time to get at least 30 minutes on the slopes; and (2) find an optimistic CEO. Last year, given the macroeconomic climate, the crush of activities and the demands of work, (1) was impossible and (2) was a lay-up. It's true that by January 2008, the U.S. financial sector had started to implode and troubles in the housing sector were spreading into the real economy. But the CEOs who showed up at Davos, who were mostly CEOs of multinational firms, were still very much looking on the bright side. The reason: the global growth story was still intact. I remember speaking with the CEO of Caterpillar, Jim Owens, who conceded that sales in the U.S. were soft but was pleased that global sales were booming. Economists and executives alike had bought into the "decoupling" theory -- the notion that the rest of the world could continue growing even if the U.S., the traditional engine of global growth, had gone into idle.

A year later, it's a much different story. It may still be difficult to get away for some schussing. But it may be very difficult to find an optimistic CEO. Caterpillar announced Monday that the deteriorating global economy was forcing it to scale back opeations and reduce employment by 20,000. And I notice that Ownes isn't listed in the preliminary list of Davos Participants.

It's an attitude that would have made World War II–era Britons proud. The economic state of the world has produced a grim new frugality in England, the likes of which haven't been seen since the end of food rationing in 1954. December retail sales showed same-store declines of 3.3 percent in what the British Retail Consortium said was the worst shopping season since it began keeping records in 1983. Sales would have been even more dismal if stores hadn't offered discounts that were the steepest (some slashed prices by 90 percent) and earliest in British retail history, according to a survey by PriceWaterhouseCoopers. In the same month, Britons bought 21 percent fewer cars than in the corresponding period of 2007, slashed their purchases of table water and champagne, and cut back purchases of clothing for the 14th month out of the last 15.

Among the few shops on High Street reporting increases: shoe menders, pawnbrokers and down-market discounters like the Aldi no-frills supermarket chain. The closing weeks of 2008 also saw the bankruptcies or financial collapse of no fewer than 10 big retail chains, from Woolworths to Zavvi, the former Virgin Megastores.

Applications for allotment gardens—small plots of land where city dwellers can grow their own food for a small fee—doubled in 2008 in cities like Warwick. On Amazon's U.K. Web site, bestsellers include "The Thrift Book," "Food for Free" and "The Penguin Handbook of Keeping Poultry and Rabbits on Scraps." Quantcast The shift to thrift is of course natural in hard times, as consumers worry about their jobs and shut their wallets amid the deepening gloom. This time, however, the clampdown on spending appears to be more than a sharp but temporary downturn of the economic cycle. In Britain, the U.S. and other consumer-driven economies, including Spain and Ireland, it seems to herald a much broader shift: the end of a way of life based on freewheeling consumption fueled by easy credit and the wealth effect of ever-rising asset values. Already, once spendthrift Americans have hiked their personal saving rate from near zero, where it's hovered for several years, to almost 3 percent in November. Merrill Lynch chief economist David Rosenberg expects the rate will soon rise to 8 percent and beyond, levels last seen 20 years ago. Just like overleveraged and undercapitalized banks, Rosenberg says, private households are now repairing their own balance sheets by spending less, saving more and paying off their debt. And just as in the financial industry, this is beginning to look less and less like a quick fix—and increasingly like a long-term change of habits.

Read the rest of this article here.

"EVERYTHING MUST GO!" blares a bright yellow sign at the Circuit City store on Broadway and 80th Street in Manhattan. The revolving doors whir with curious customers looking for bargains. As can be inferred from the huddles of dejected employees wearing bright-red Circuit City polos, this store will soon be closing, along with the other 566 outlets of the nation's second-largest electronics retailer, leaving 34,000 people unemployed. Circuit City must liquidate some $1 billion in merchandise by the end of March.

There was a time, not so long ago, that a company like Circuit City would have stuck it out by filing for Chapter 11, which is sort of the corporate world's version of rehab. A Chapter 11 bankruptcy filing gives companies breathing room from creditors in order to regroup and relaunch. Circuit City started down this path in November, but in mid-January it decided that rehab was too tough and threw in the towel. The company's move signals an alarming trend: more firms are deciding to forgo the time-consuming work of restructuring their finances, and instead selling off the inventory and fixtures and folding their tents. Sharper Image, Linens 'n Things, retailer Steve & Barry's, the department store Mervyns. All filed for bankruptcy with the intent of reorganizing. And all have wound up liquidating. "The reason we're seeing liquidation rather than bankruptcy from so many retailers is because people are hopeless," says Dean Baker, codirector of the Center for Economic and Policy Research. "We're still looking at a very bad year in 2009 and probably most of 2010, so it's very difficult to be optimistic about reorganizing and coming out of it stronger."

Read the rest of this story here.

China is the only major economy that is likely to show significant growth this year, because it is the only one that routinely breaks every rule in the economic textbook. There is no truly free market in China, where the state doctors statistics, manipulates the stock markets, fixes prices in key industries, owns many strategic industries outright, and staffs key bank posts with Communist Party members and tells them to whom they should lend, and in what they should invest. In fact, the main reason China is not slowing as fast as the other big five economies is its capacity for what economists ridicule, in normal times, as state meddling: it limited foreign investment in the banking sector and didn't embrace the exotic financial innovations that are the melting core of the global credit crisis.

Why does China's brand of command capitalism work? The question has long intrigued economists, who tend to cast the state as hopelessly stupid, the market as naturally brilliant. Now that the United States and Europe are moving toward state control—by nationalizing the banking and car industries, and imposing heavy new regulation on the financial industry—the question has a new urgency. China, the poorest and most chaotic big economy, looks like the one best positioned to navigate what may be the worst global downturn in seven decades.