Fallout: The Financial Crisis

Seeking economic answers in Davos

Marketplace Staff Jan 29, 2009
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Fallout: The Financial Crisis

Seeking economic answers in Davos

Marketplace Staff Jan 29, 2009
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TEXT OF INTERVIEW

Steve Chiotakis: Well, world and business big wigs are still rubbing elbows over there in Davos, Switzerland. The World Economic Forum continues as participants keep an eye on the U.S. stimulus package making its way through Congress.

Diane Brady is senior editor at BusinessWeek magazine. She joins us now. Diane, how’s the Obama plan playing in Davos?

Diane Brady: Well I think that certainly, people welcome the sense that the U.S. is trying to do something to get out of this mess. But the main discussion in Davos is how do we adjust to a world in which the American consumer is not going to buy things they don’t necessarily need with money they never really had? So that seems to be the motif here, and the general feeling is even with the stimulus package, the U.S. is not going to be the engine of growth for years to come.

Chiotakis: What kinds of questions are swirling around Davos right now, especially as former President Clinton is there, a lot of economic growth in the 90’s during his two terms. What are they going to be asking President Clinton?

Brady: I think there’s a couple of thing. Now Clinton has obviously made his personal mission much more on the philanthropic ends. I think there’s also a sense that Clinton, along with the previous administration, has to answer for some of the policies, the sense that innovation got ahead of regulation and people were asleep at the switch and allowed this to happen. And certainly a lot of the kind of “rah-rah” economy started under Clinton. And one of the things that is happening here, which is different from previous years, is I think there’s been much more of a focus almost away from the U.S. It may be partly because the representation isn’t here. It’s also because China is clearly a much bigger factor and people are trying to contemplate what’s going to happen to Europe, are we going to see growth out of Asia and India. And a lot of it is companies trying to figure out where am I going to make my money in the next decade if I can’t make it the same way I did the previous decade.

Chiotakis: You know, we talked about the muted tone and how there wasn’t the glitz and glamour that usually is Davos, right? How are things going to wind up, do you think, as people exit this economic forum?

Brady: Well, there’s still certainly the parties, but people are steeped in pessimism here, and what they’re really trying to figure out is, what is the way to grow? And there is a sense that government plays a much, much larger role than it ever has in previous years. And so you can’t just look to the private sector anymore — everybody in every country around the world is increasingly dependent on their governments, for bailouts for stimulus to try and get the consumer back. So that’s given the politicians a much bigger role than normal as well.

Chiotakis: Diane Brady with BusinessWeek. Thanks for joining us from Davos.

Brady: Always a pleasure to talk to you, thanks very much.

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