Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, the
Speaker 1: pandemic has been pretty good for a small group of people, billionaires.
Speaker 1: According to the World Bank, the world's wealthiest accumulated at
Speaker 1: four point one trillion dollars during the pandemic. Well, at
Speaker 1: the same time, one million people around the world fell
Speaker 1: into extreme poverty. About two thousand, seven hundred and fifty billionaires.
Speaker 1: They now control about three point five percent of the
Speaker 1: world's wealth. So very time we read for us to
Speaker 1: be joined by Peter S. Goodman. He's global economics correspondent
Speaker 1: at the New York Times. He's also the author of
Speaker 1: davos Man, How the Billionaires Devoured the World. It's a
Speaker 1: new book that came out earlier this month. Peter, great
Speaker 1: to have you with us. How are you great to
Speaker 1: be here? Thanks for having me guys, Yeah, we're delighted
Speaker 1: to chat with you. There's a lot to get to
Speaker 1: We got quite a bit of time. Um, but I
Speaker 1: want to start with the title here. So what is
Speaker 1: it davos Man. Well, davos Man is his term coined
Speaker 1: by the political scientist Samuel Huntington's back in two thousand four,
Speaker 1: he was using it to describe people who go to
Speaker 1: the World Economic Forum in Davos, Switzerland, This glittering gathering
Speaker 1: of the world's most powerful people, the billionaire class, heads
Speaker 1: of state, a few celebrities wandering around now and again.
Speaker 1: I'm using it to describe not only forum participants and billionaires,
Speaker 1: but a special kind of billionaire who would have us
Speaker 1: believe that their interests are our interests collectively. And that's
Speaker 1: this idea that if we organize our economies and our
Speaker 1: societies around sending more wealth to the people who already
Speaker 1: have most of it, the magic of trickle down economics
Speaker 1: will take care of the rest and we will all prosper.
Speaker 1: We've been running an open air experiment in this idea
Speaker 1: that I refer to as the cosmic lie for the
Speaker 1: last half century, and the results are not at all pretty.
Speaker 1: This is an idea that Davos man uses really to
Speaker 1: protect himself against democracies trying to redistribute the wealth in
Speaker 1: a fair way. Well, you choose five of these Davos
Speaker 1: meant to to highlight throughout the book. Jeff Bezos, Stephen Schwartzman,
Speaker 1: Larry Think, Jamie Diamond, Mark, Benny Off names that our
Speaker 1: audience is certainly familiar with. Why these five folks, and
Speaker 1: look and they're all men. Yeah, well, look, in reality,
Speaker 1: Davos man is mostly male, mostly American, mostly white. There
Speaker 1: are lots of exceptions, but that's that's the rule. Um.
Speaker 1: You know. Look, I could have picked almost anybody within
Speaker 1: the billionaire class who goes to Davos and come up
Speaker 1: with largely the same book. I take these guys because
Speaker 1: you know, it's a cross section of finance and tech. Uh.
Speaker 1: And two of them, Benny Off and Larry Fink in particular,
Speaker 1: are champions of this idea, stakeholder capitalism, you know, much heralded,
Speaker 1: much celebrated by much of the business press, this notion
Speaker 1: that Milton Freedman is um is over and that companies
Speaker 1: are no longer just organized to return profit to shareholders.
Speaker 1: Now they're catering to what they all stakeholders, that's labor,
Speaker 1: local communities, social aims. And you know, I argue in
Speaker 1: the book that the pandemic was really the first big
Speaker 1: test of stakeholder capitalism in the In the summer of
Speaker 1: nineteen a bunch of CEOs coalescing at the Business Roundtable
Speaker 1: then headed by Jamie Diamond, actually signed off on this
Speaker 1: new statement of a purpose of a corporation. And I argue,
Speaker 1: and I think the pandemic makes pretty clear that they
Speaker 1: used this pledge of stakeholder capitalism as a way to say,
Speaker 1: you know, we've got this. You don't need to tax us,
Speaker 1: you don't need to regulate us. We you can outsource
Speaker 1: to us with confidence. Uh, the solving of the world's
Speaker 1: biggest problems like climate change, like gender and racial inequality,
Speaker 1: and the pandemic has shown that that was really a
Speaker 1: crude exercise in public relations. You know, Peter, It's really
Speaker 1: interesting because it's just coming off a conversation we just
Speaker 1: had about E s G investing, which we talked about
Speaker 1: a lot here at Bloomberg. And there's so much money
Speaker 1: going into I'm sure you know, into the world of
Speaker 1: E s G to the point where it's becoming, you know,
Speaker 1: a very significant percentage of overall assets that are out there. Um,
Speaker 1: how do we kind of change this? Because I think
Speaker 1: there's a lot of investors who think they're doing good
Speaker 1: by tapping into E s G and yet it kind
Speaker 1: of is many would argue it's not. I mean, we
Speaker 1: need more transparency, like there's Look, there's nothing wrong with
Speaker 1: the idea of stakeholder capitalism or e s G. Right.
Speaker 1: I mean, if companies want to actually try to solve
Speaker 1: social aims and they're being transparent about that, and some
Speaker 1: investors don't want to ride on that particular boat, they
Speaker 1: don't have to put their money there, that's fine. But
Speaker 1: we need a way to actually test these claims instead
Speaker 1: of just you know, taking it. I mean, I mean here,
Speaker 1: you know, take a guy like Mark Manyo, who's the
Speaker 1: guy who does a lot of philanthropy. This is the
Speaker 1: CEO of Salesforce, big Silicon Valley tech company. He actually
Speaker 1: says at Davo's last year virtual gathering because they couldn't
Speaker 1: meet because of the pandemic, CEOs are the real heroes
Speaker 1: of the pandemic. I mean he's not talking about frontline
Speaker 1: medical workers. He's not talking about parents dealing with kids
Speaker 1: cooped up dealing with business learning, or essential workers delivering
Speaker 1: our food CEO. And he says, uh, you know, it
Speaker 1: was the CEOs of companies who gave us vaccines and
Speaker 1: credits that staved off bankruptcy, right, right, specifically said the
Speaker 1: government didn't save you, we save You were talking about
Speaker 1: how Mark Bennioff of Salesforce UH last year at the
Speaker 1: Virtual Davos event, talked about how the CEOs the were
Speaker 1: the real heroes. Um, and you write about that in
Speaker 1: your book. You also you engaged with with Mark Bennioff
Speaker 1: for this book. You spoke to him, UM, And I
Speaker 1: know I'm wondering what the productive conversation is around that,
Speaker 1: Like what did he tell you when you when faced
Speaker 1: with your criticism. Yeah, he seemed to be into the
Speaker 1: back and forth, which I think is an indicator of
Speaker 1: how you know, these guys use their participation in what
Speaker 1: they call multi stakeholder dialogues. They love to go to
Speaker 1: Davos and engage in these earnest conversations about climate change
Speaker 1: and race in class, and and they just don't like
Speaker 1: to actually do anything. They're not into sacrifice. They're into
Speaker 1: finding wind wind solutions to every problem and using Davos
Speaker 1: to to you know, signal their virtues. So Benny Off
Speaker 1: will talk openly about anything. I mean, I've been to
Speaker 1: Davos and seeing CEOs like benning Off go off and
Speaker 1: simulate the Syrian refugee experience. You know, they'll be blindfolded
Speaker 1: and let around in the dark while people are shouting
Speaker 1: at them in a language they don't understand, demanding papers.
Speaker 1: And then they all congratulate themselves to their empathy and
Speaker 1: they go off and eat truffles and drink champagne and
Speaker 1: a banquet, you know, hosted by some global bank. Benny
Speaker 1: Off was was very willing to get into it. But
Speaker 1: the status quo reigns with Davos man. How do we
Speaker 1: work through this? Tim and I talked about this a
Speaker 1: lot Peter about I certainly feel fortunate, but I am
Speaker 1: the granddaughter of immigrants who came with nothing, you know,
Speaker 1: and I've seen or heard about parents going through the depression,
Speaker 1: Like how do I But I've worked really hard to
Speaker 1: achieve a certain amount, and you know, not on the
Speaker 1: level of billionaires. I understand that, but I feel very torn. Certainly, Um,
Speaker 1: there are people who are just in the equity market.
Speaker 1: So therefore o n case who have benefited during this pandemic.
Speaker 1: We're not billionaires, but we have benefited. Others have not.
Speaker 1: So what's the productive Like Tim talks about, what's the
Speaker 1: productive conversation that we need to be having Is it
Speaker 1: with lawmakers? Is it with CEOs? With it? You know,
Speaker 1: we do this at Bloomberg. We have these conversations and
Speaker 1: get to some uncomfortable areas. So how do we get
Speaker 1: to a better point here, or what's what is it
Speaker 1: that we need to be asking of these CEOs. You know,
Speaker 1: we don't really need anything radical, uh, And we don't
Speaker 1: really need to ask much of the CEOs. I mean,
Speaker 1: they can go on and maximize profits and look for
Speaker 1: innovation and ruther companies. That's all good and well. I
Speaker 1: mean I'm not I'm not suggesting that we ought to
Speaker 1: expect that they're going to be what they tell us
Speaker 1: they are, these like agents of social progress, their CEOs,
Speaker 1: let them bring your companies. Those of us who are
Speaker 1: living in democracy ought to be demanding the things that
Speaker 1: we used to have. Progressive taxation, labor power so that
Speaker 1: workers can actually get a commensurate share of the games,
Speaker 1: and we need any trust enforcement. And this is not
Speaker 1: some sort of radical agenda. This is like what we
Speaker 1: had in the years after the Second World War to
Speaker 1: till the mid nineties seventies. And you know, we could
Speaker 1: do that again. It's it's not easy because davos Man
Speaker 1: has formidable apparatus that he uses to fight off any
Speaker 1: attempts to redistribution, any any attempts had changed. But that's
Speaker 1: you know, that's a proven solution, uh, in terms of,
Speaker 1: you know, generating economic games that are helpful to more people.
Speaker 1: What about a wealth tax, Peter, What has your reporting
Speaker 1: told you about the efficacy of a wealth tax? I mean,
Speaker 1: we've got to have a wealth tax, and anything short
Speaker 1: of a wealth tax just simply isn't fair, And then
Speaker 1: most people feel like the game is working. I mean,
Speaker 1: Jeff Bezos, his income is eighty three thousand dollars a year.
Speaker 1: That's a salary from Amazon on He's paid about as
Speaker 1: much as a public school teacher in California. If we
Speaker 1: tax income, then we live in a world where Jeff
Speaker 1: Bezos Steve Schwartzman, who's also a main character in my focus,
Speaker 1: worth thirty five billion dollars. That these guys are gonna
Speaker 1: be paying less in their income and wealth to the
Speaker 1: government than the people who are scrubbing their toilets. And
Speaker 1: the result of that isn't simply that we can't finance
Speaker 1: government programs that it turns out we actually need, especially
Speaker 1: in an emergency like a pandemic. It's also that we
Speaker 1: then live in a democracy where large numbers of people
Speaker 1: have legitimately concluded that their needs and interests, their ability
Speaker 1: to support their families just doesn't count very much for
Speaker 1: the for the powers to be. And you can draw
Speaker 1: a direct line between that and the rage that we
Speaker 1: feel in American life into the January six insurrection, the
Speaker 1: fact that huge numbers of people won't take these COVID vaccines.
Speaker 1: I mean, a lot of this is just foundationally. The
Speaker 1: people don't believe in the system, and not because they're crazy.
Speaker 1: I'm not condoning where they go with their conspiracy theories
Speaker 1: and their asis tropes, but they're They're vulnerable to political
Speaker 1: opportunists who will cater to their worst instincts. And unless
Speaker 1: we deal with inequality, we're stuck with that. So should
Speaker 1: we say, well, see what's hard is we talked about
Speaker 1: wealth versus income, right, and so how do we really
Speaker 1: shore up and is there the political will I guess
Speaker 1: as as well to shore up the income for most
Speaker 1: Americans so that we can reduce some of these gaps
Speaker 1: that are out there. Well, if there is political will,
Speaker 1: the problem is that we don't have a democracy in
Speaker 1: terms of who's got to seat at the table. I mean,
Speaker 1: valvos Man hires lobbyists the way most of us hire
Speaker 1: one accountant to do our taxes. If we can even
Speaker 1: afford that davos Man has rigged the game through you know,
Speaker 1: threats to ballot access through deregulation, such that davos Man's
Speaker 1: votes count at the table much more than everybody else.
Speaker 1: So it's I'm not saying it's like easy to do
Speaker 1: a wealth taxed. Lots of people have tried it and
Speaker 1: it hasn't happened, but it actually pulls pretty well. And
Speaker 1: when people are educated about how the tax system works,
Speaker 1: and let's face it, it's not, by accident incredibly complicated,
Speaker 1: which makes it, you know, right for manipulation by people
Speaker 1: who actually can hire lawyers and accountants and lobbyists to
Speaker 1: help them through it. When people are informed, they see
Speaker 1: the inequity in the current system where the billionaires are
Speaker 1: just paying much less as a share of their wealth
Speaker 1: than everybody else. So what would you say to somebody says, okay,
Speaker 1: wait a second, someone like Jeff Bezos, he pulled himself
Speaker 1: up by his bootstraps. He created Amazon, on his own.
Speaker 1: He deserves to have as much money as Amazon has
Speaker 1: made him. Jeff Bezos does deserve to be very wealthy.
Speaker 1: He had a fantastic idea. He's revolutionized commerce. I mean,
Speaker 1: where would we be without e commerce in the midst
Speaker 1: of the pandemic. I'm not here to demonize people like
Speaker 1: Jeff Bezos, but Jeff Bezos is a beneficiary of infrastructure.
Speaker 1: Right he uses roads paid for about tax payer, the
Speaker 1: smart people working at his company or ed vacated in
Speaker 1: schools that are financed by the taxpayer. And Jeff Bezos
Speaker 1: is a beneficiary of trade deals that have been shaped
Speaker 1: by lobbyists over time to return wealth mostly to people
Speaker 1: like Jeff Bezos. Moreover, you know, he's making all this
Speaker 1: wealth not just while his warehouse workers aren't prospering, but
Speaker 1: because they're not prospering. Most of his warehouse workers have
Speaker 1: no pandemic protection in the first wave of the pandemic.
Speaker 1: I'm just saying he's got to pay his fair share
Speaker 1: while he's rightfully capitalizing on a great idea. And we
Speaker 1: would love to put you in a roundtable with all
Speaker 1: these guys and just continue that discussion. Peter Goodman, good Yeah,
Speaker 1: we'll work on that. Peter Goodman, global economic correspondent New
Speaker 1: York to at the New York Times, on the phone
Speaker 1: from New York City, his new book, davos Man, How
Speaker 1: the Billionaires Devoured the World. It's all relevant to the
Speaker 1: broader conversation that we've been having over the last couple
Speaker 1: of years. Yeah. I really enjoyed it. Really good book. Um,
Speaker 1: and not just saying that because he was my old
Speaker 1: editor by the way, at hupost. Just a little