I’m in a fairly remarkable session: a huge room filled with hundreds of WEFers around tables to brainstorm economic uncertainty and decide what the problem is (and we should be worried that debating the problem vs. the solution is probably the biggest reason to worry).
The format is working well, bringing out the essential ideas of the smart people (me not included) here. And, again, we perhaps should worry that there are so many ideas about what’s wrong. At my table, I heard fear of the inability and ignorance of decision makers to figure out what’s wrong: kneejer political reactions and the risk of protectionism. I heard that economic models don’t work — as one person said, maybe the $100 bbl of oil we fear is really a $60 bbl, given the fall of the dollar. There was a lot of talk about instant information among customers and debate over the benefit and danger of that. I heard about the unwillingless of companies and governments to acknowledge and manage to the realization that they are part of a global economy and one person blamed the buzzwording of globalization. Problems from other tables: talent; the environment; energy, short-sighted thinking (said one: it’s too late to talk about 2008); a lack of U.S. leadership.
Now we’re asked to vote, with little gadgets, for the single greatest threat: recession, income inequalities, rise in energy and commodity prices, global credit crunch, mismanagement of the current crisis, a collapse of confidence, protectionism, overreaction to the threat of recession, lack of coordinated response and leadership. Winners (if you want to call it that): recession, mismanagement, lack of coordinated response followed closely by lack of confidence. The bottom: greater income inequalities. That will be a controversial choice.