People Of WFIT
Sat January 26, 2013
Predictions, Warnings Round Out World Economic Forum
Originally published on Sat January 26, 2013 6:34 pm
ROBERT SMITH, HOST:
I don't know about you, but there's been something wrong in the United States this week. It felt a little bit - I don't know - more poor, less fabulous. Ah, of course, of course, the rich and powerful folks of the world and the United States are all in Davos, Switzerland, attending the World Economic Forum. That's where the big names in business and politics get together in the Alps.
Of course, I'm not invited, but Andrew Ross Sorkin is. He's the editor at large for The New York Times' DealBook session. It's the last day of Davos, so he's probably sipping champagne right now.
ANDREW ROSS SORKIN: I have a glass of Cristal in one hand and caviar in the other.
SMITH: Of course. Well, one of the hobbies there in the Alps during Davos is to make these grand predictions, like they're all standing around, they're going to parties, so they're like: We know more than the rest of the world. We are going to tell you exactly what's going to happen in the economy. And you wrote a piece this week that said they are wrong.
SORKIN: Davos is traditionally, actually, oddly a confer indicator of what's about to happen. If you go back and look at many of the observations and predictions that have been made over the past decade here in the Alps, they have been wrong. The most famous being Bill Gates back in 2004 when he announced that spam would be eradicated in two years. That has not happened.
SMITH: And, of course, Bill Gates famously in 2003 dismissed Google. Yeah, I'm glad he didn't take investment advice from Davos.
SORKIN: Pretty much. Having said that, when you think about who are the kind of people who should know what's about to happen next in the economy, who should have a better sense in pulse of where the action is, these people should. They are in the boardroom, in the corner offices and in the political appointments, and so at some level gauging the mood. If you believe in the wisdom of crowds, there is a value to speaking to these people, to hearing what they have to say and to being here in the Alps.
SMITH: You're just saying that because you want to go.
SORKIN: You know, you got to justify it somehow.
SMITH: So what are the predictions this year that we will be disproving over years to come?
SORKIN: Well, I would say the biggest takeaway - and again, get out your salt shaker because we don't know if it's going to be true - is this idea that maybe things are actually a lot better than we think. There's so much cash on the sidelines around the globe, people just sitting on their hands, stuffing it under their mattresses. And at some point - and the view is that this point is going to come perhaps in 2013 - they're going to actually get off their hands and actually put that money to work. And that's going to actually lead to a boost in the economy.
SMITH: We should just say just because billionaires in Davos are optimistic and politicians there, maybe the rest of us shouldn't go out and blow our entire emergency fund on corvettes.
SORKIN: I would caution all the listeners on that exact score. You know, the only thing that gives me some pause is having been here for now several years, these same individuals were traditionally pessimistic, especially post-crisis. So to see the shift actually is valuable. Now, again, whether they're right, we just don't know yet.
SMITH: Andrew Ross Sorkin is editor at large of DealBook at The New York Times. Thank you very much.
SORKIN: Thank you. Transcript provided by NPR, Copyright NPR.