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Michael Freedman

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One Countercyclical Business

1:33 PM, January 29, 2009 | Comments (0)

Spend a day or two here, and it seems that every business, in every sector, in every geographic area, is suffering. There seem to be no safe havens, and few truly countercyclical industries this time around. But I think I may have found one: white-collar...

Wall Street Bigshots: Conspicuous By Their Absence

7:59 PM, January 28, 2009 | Comments (0)

Depression Era Thrift Is Back In Style

5:06 PM, January 26, 2009 | Comments (0)

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Michael Freedman

One of the big themes emerging from the World Economic Forum this year is the reemergence of the state. Wall Street titans are noticeably missing here and forum promoters boast of the record number of heads of state and government in attendance. But if these folks are meant to come up with solutions to the financial mess, one striking problem keeps emerging: they are not trusted by the electorate. Ukraine faces one of the steepest drops in economic growth in all Europe, while its president, Viktor Yushchenko, reportedly suffers from something on the order of a 2 percent approval rating. (He apparently bowed out of coming to Davos at the last minute; draw your own conclusions as to why.) In a panel on the state of Europe, Latvian President Valdis Zatlers said his country is going to go from 12 percent growth in 2007 to a 5 percent drop this year. According to one recent report, "the Latvian government's approval ratings have dropped to 10 percent, the worst in the EU," and Latvians have already taken to the streets in violent protest. The question now, for countries both small and large, is just how much time governments have to start turning things around before things start to turn ugly. Aside from the possibility of more widespread protests, the big fear voiced here in Davos is a turn to populism, protectionism and beggar-thy-neighbor policies, which may have a short term political benefit, but will only worsen the underlying economic problems.

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