Richest Of The Rich Ponder How To Level The Field
CNBC By Jeff Cox January 21, 2014 6:27 AM
With the global economy slowly getting back on its feet, 2,500 delegates gathered in Davos face a vexing question this week: How to spread the wealth.
As much as any other issue income inequality will tax world leaders in the years ahead.
Aggressive policies from central banks have helped stem the liquidity drain that sent the U.S., Europe, and other countries reeling in the latter part of the last decade. Wall Street banks have come back to life, equity markets have soared and even debt-laden countries like Ireland and Greece are finding their way back into the capital markets.
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But the main problem now will be those left behind.
"The kind of people over there (in Davos), other than the professors, are making a great deal of money more than their predecessors were a generation ago," University of Maryland economist Peter Morici said in an interview. "This is a growing embarrassment. The differences in income between Wall Street and the rest of America are astronomical."
Dangers surrounding income inequality are not lost on those attending the World Economic Forum.
In a survey of members, the issue ranked near the top among global economic concerns.
"It raises concerns about the Great Recession and the squeezing effect it had on the middle classes in developed economies, while globalization has brought about a polarization of incomes in emerging and developing economies," the forum said in a statement. "This is true despite the obvious progress in countries such as Brazil and lower levels of poverty in several developing countries in Asia and Africa."
The negative effects of globalization will be especially problematic this week for its advocates, particularly President Barack Obama, for whom one of the key platform tenets in the 2008 election was a pledge to redistribute income.
"In the United Stated, people in the middle and bottom are shrinking and people on the top are rising. That's not what globalization was supposed to do for them," Morici said. "For President Obama , it's very troubling because he's been a big advocate for globalization."
Recent studies have shown American wealth disparity at its highest level since the Great Depression.
Unemployment in the U.S. has been vexing as well. While the headline rate has dropped to 6.7 percent, that's come as the labor force participation rate has hit a 36-year low.
In Europe, youth unemployment in some areas is around 50 percent and about 12 percent overall in the euro zone.
Concerns over inequality "should act as a wake-up call" to Davos attendees, Philip Jennings, general secretary of the labor group UNI Global Union, told media members last week.
Morici, however, said he doesn't expect much to come it, at least at the four-day World Economic Forum.
"This is the biggest problem of our time," said. "We need to have more balanced growth across the globe."
-By CNBC's Jeff Cox http://finance.yahoo.com/news/richest-rich-ponder-level-field-112719751.html
The Rich & Famous Visit Davos
By CNBC.com Posted by Matt Clinch on 17 January 2014
Many of the world's most influential business leaders, politicians and celebrities descend on the Swiss Alpine resort of Davos this week, where the annual meeting of the World Economic Forum has been held for more than 40 years.
The forum has also drawn its fair share of showbiz celebrities and the glitz didn't stop last year, with Oscar-winning actress Charlize Theron launching her Africa Outreach Project at the event. This year proves to be no different, with famous faces expected from the world of politics, sports, film and technology.
Star of films like "Death Becomes Her" and "The First Wives' Club", Hawn is set to team up with Arianna Huffington, the president of the Huffington Post, for an evening talk on healthier and happier living. The Academy Award-winning actress runs her own charity foundation which offers a research-based training program for educators and children.
He may have calmed the world's markets with his famous pledge to do "whatever it takes" to save the euro, but the president of the European Central Bank is now dealing with the looming specter of weak consumer prices. Fresh from the ECB's latest rate decision, Draghi appears at Davos at a time when the central bank looks increasingly likely to announce further stimulus for the euro zone.
The third child of the British Queen and fifth in line to the throne of the U.K., the Duke of York (or Prince Andrew) is a regular visitor to the World Economic Forum.
His focus in recent years has been assisting the economic success of the U.K, according to his website. Concentrating on education, science and engineering, and entrepreneurship, Prince Andrew will no doubt be in an upbeat mood with economic indicators in the country pointing in the right direction.
Known for his flamboyance, the often controversial Boris Johnson is now in his second term as London mayor.
In November, he was heavily criticized for suggesting some people would not be successful in life because of their low IQs. London now ranks as the top city for foreign real estate investment opportunities, according to a survey released by the Association of Foreign Investors in Real Estate, but price surges have led many to believe there's a housing bubble on the horizon.
The International Monetary Fund's managing director remains a staple for Davos each year and will take the stage at a seminar with central bankers Mark Carney and Haruhiko Kuroda. Lagarde last week indicated the IMF's plans to raise global growth forecasts, amid increased optimism about the world's economic future.
Shares of Yahoo have risen a massive 160 percent since the appointment of Mayer as president and CEO. One of the most anticipated speakers at Davos and now Co-Chair of the World Economic Forum 2014 Meeting. Mayer's due to debate the emerging issues of 2014, and their implications for the global economy.
After her well-received speech at the Consumer Electronics Show in January, CNBC's very own Jim Cramer dubbed her the "heir apparent" to the late Steve Jobs.
Another Davos regular, the JPMorgan CEO last year was one of the many highlights. Dimon gave praise for the Federal Reserve at a seminar in 2013, declaring he thought it "saved the system" on a global scale after the collapse of Lehman Brothers in September 2008.
The "Good Will Hunting" star is speaking at Davos as co-founder of Water.org, a nonprofit organization that has worked to transform communities in Africa, South Asia, and Central America by providing access to safe water, according to its website.
The Academy award-winning actor and philanthropist will discussing innovative community-driven solutions to safe water and sanitation.
Back for another year, Bill Gates, the Microsoft founder, spoke at last year's event on his concerns that austerity measures could clip some public funding for deadly diseases like malaria, tuberculosis and HIV.
"The money that helps out the poorest overwhelmingly comes from government aid budgets", Gates told CNBC at last year's Davos, adding that it was unclear what kind of priority aid will have in future budgets. Gates remains a part-time chairman of Microsoft but his full-time gig is with his charity, the Bill & Melinda Gates Foundation.
No stranger to the annual meeting, Nouriel Roubini, whose nickname is "Dr Doom", surprised market watchers by delivering an upbeat message in his 2014 predictions, expecting economic performance to "pick up modestly" in both advanced economies and emerging markets.
Eric Schmidt, Google's executive chairman, is also making the trip to the alpine resort. Heavy on technology faces this year, Davos will be welcoming Schmidt as well Yahoo's Marissa Mayer and Facebook's Sheryl Sandberg.
There will be much to talk about for Schmidt, with the Google exec telling an audience at the Paley International Council Summit in New York back in November that the company thought about moving its servers out of the U.S. after the NSA debacle.
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