I often feel alone in my anger about wealth disparity in America. The isolation is particularly pronounced in the early morning when I visit my local Peet’s and see a disheveled homeless man named John asking for money. John suffers from what I’m guessing is schizophrenia, as sometimes he’s coherent and can carry a conversation while at other times he’s talking to himself and shaking uncontrollably. It saddens me that in a supposed city of “angels” where ostentatious displays of wealth are pervasive, so are homeless encampments.
Peter S. Goodman shares my anger, and he lets his revulsion rip in his 406-page book, Davos Man: How the Billionaires Devoured the World. Goodman regards Davos Man as a uniquely greedy species driven by his relentless pursuit of power and an insatiable accumulation of personal wealth. Goodman’s anger makes for a riveting read, as does his dry wit, which deftly borders sarcasm without crossing the line.
As expected from a veteran reporter who covers economics for the New York Times and earlier reported on China for the Washington Post, Davos Man is prodigiously researched and chock full of data and statistics. What sets Goodman apart from most journalists is his compassion and empathy. Many reporters view the disadvantaged and downtrodden as props in a compelling story, but there’s an unmistakable humanity to Goodman. He not only sees and understands human suffering, but he also feels it. As a result, readers get to meet victims of Davos Man’s rapaciousness and plunders who Goodman encountered in his travels through Europe and South America.
According to Goodman, the term “Davos Man” was coined in 2004 by political scientist Samuel Huntington to describe “those so enriched by globalization and so native to its workings that they were effectively stateless, their interests and wealth flowing across borders, their estates and yachts sprinkled across continents their arsenal of lobbyists and accountants straddling jurisdictions, eliminating loyalty to any particular nation.”
What triggered Goodman to write his diatribe about the sanctimonious billionaires who attend the annual World Economic Forum in the Swiss Alps resort of Davos is this statistic: In 2020, while most of the world suffered from the ravages of a pandemic, the collective wealth of billionaires worldwide increased by $3.9 trillion. Meanwhile their philanthropic contributions, the justification for their successful tax avoidance schemes, fell to their lowest level in nearly a decade. As the obscenely rich got even more obscenely rich, some 500 million people descended into poverty. Goodman persuasively proves the correlation.
Goodman attended World Economic Forum seven times. The billionaires use the media ballyhooed event to feign concern for making the world a better place, but Goodman quickly educates that the lofty talk is mostly bullshit.
Take Marc Benioff, founder and CEO of software giant Salesforce and someone I mistakenly believed was one of the few decent CEOs in the Silicon Valley region. Here’s Benioff celebrating himself and his other billionaire CEOs at the WEF, which was held virtually in late January 2021 because of covid.
“In the pandemic, it was CEOs in many, many cases all over the world who were the heroes,” Benioff declared. “They’re the ones who stepped forward with their financial resources and the corporate resources, their employees, their factories, and pivoted rapidly – not for profit, but to save the world.”
Here’s an example of Benioff’s altruism. In 2018, Benioff and Salesforce collectively committed $7 million toward a successful 2018 campaign for a local ballot measure levying new taxes on San Francisco companies like his to curb homelessness. That same year Salesforce recorded more than $13 billion in revenues while paying “the modest sum” (Goodman’s words) of zero in federal taxes.
“Salesforce deployed 14 tax subsidiaries scattered from Singapore to Switzerland, moving its money and assets around in a masterful display of accounting hocus-pocus that made its taxable income vanish,” Goodman explains. “Benioff’s version of compassionate capitalism airbrushed key “stakeholders” out of the picture: The government was missing.”
Goodman cuts down to size Larry Fink, CEO of global money manager BlackRock, who has so successfully cultivated a “socially responsible” investor image that he was rumored to be a candidate for Treasury Secretary in the Biden Administration. It wouldn’t surprise me if Fink has a voodoo doll with Goodman’s face.
In August 2020, Goodman wrote a story for the Times noting that Fink was a vocal proponent of so-called stakeholder capitalism that advocates corporations must place greater emphasis on “progress, people, and the planet” than profits. Goodman’s story noted that BlackRock was squeezing ailing Argentina for repayment on its bonds, undermining Fink’s “I’m not all about money” image. Three days after Goodman’s story ran, BlackRock agreed to settle for fifty-five cents on the dollar.
Then there’s billionaire JP Morgan Chase CEO Jamie Dimon, who famously took a knee in front of a bank branch at the height of the Black Lives Matter movement. Dimon was a champion of Donald Trump’s tax cuts, which were supposed to result in corporations using the saved money to build factories, expand operations, and increase the pay of their workers. Instead, major corporations use their saved tax money to fund share buybacks.
Goodman calls the trickle-down promises of tax cuts a “Cosmic Lie.”
“For more than four decades, humanity has tested the merits of such (tax cuts) assumptions through an elaborate, open-air experiment,” Goodman says. “We have allowed Davos Man to dominate, and the results are in: Cutting taxes on the wealthy has proved disastrous for the vast majority of ordinary people. It has not promoted growth. It has not yielded increased wages for rank-and-file workers. It has largely produced more wealth for the people who already had most of it.”
Goodman takes a few runs at Blackstone Group CEO Stephen Schwarzman, a multibillionaire so despicable that even many of New York’s moneyed elite find him distasteful and a high society embarrassment. That Blackstone, like most private equity firms, makes immense profits raping and pillaging companies, is well known. The global scale of Blackstone’s parasitic operations was news to me. During the pandemic, Blackstone was buying up residential real estate on the cheap throughout Europe, driving up rents and forcing evictions while cutting back on services.
Blackstone’s business practices prompted two lawyers focused on human rights issues to send a letter to Schwarzman personally.
“The financialization of housing is having a grave impact on the enjoyment of the right to adequate housing for millions of people across the world,” the lawyers wrote. “As one of the largest real estate private equity companies in the world, with $136 billion of assets under management, operating in North America, Europe, Asia and Latin America, your practices are significantly contributing to this.”
Where Goodman disappoints is his discussion of Amazon and Jeff Bezos, and that’s because of his politics and blind faith in government. Goodman is sympatico with Senators Bernie Sanders and Elizabeth Warren about imposing a wealth tax. In their minds, simply accumulating great wealth is a sin.
I wouldn’t begrudge Bezos his billions if he built Amazon honestly and ethically. Bezos’s success was predicated on getting substantial state and local tax breaks to open warehouses across the country that studies show didn’t always deliver the promised economic benefits. Regardless, even the low-paying jobs that were created will disappear within a few years because of automation. I argue that no company should ever get tax breaks without iron-clad guarantees of a meaningful return. What needs to be addressed is how billionaires make their money, not taking away their loot after they earn it.
I trust Goodman’s statistics that tax breaks don’t result in trickle down benefits for working people at publicly traded companies, but at smaller or ethically run businesses with a track record of providing meaning advancement for the lowest rung workers I’m not so sure.
Many store managers earning six figure salaries at California-based In-N-Out Burger began their company careers flipping burgers. If Lynsi Snyder, In-N-Out’s thirtysomething billionaire CEO, promised to open more stores and create more jobs in exchange for tax cuts, I’d trust her. Snyder isn’t a pig like Davos Man; she could take the privately held company she controls public and make billions more. She won’t because In-N-Out is committed to very controlled growth. Snyder also turned down a personal invitation from Florida governor Ron DeSantis to relocate to his state, where she could save a bundle on corporate and personal taxes.
As an aside, Snyder is a religious person, while my sense is that spiritualism for Davos Man is looking at their bank statements. When religious people run companies, there’s evidence of a trickle-down ethical effect. Canada’s Reichmann brothers, devout Orthodox Jews, were famed for the integrity of their real estate company’s business practices.
Goodman gives short shrift to U.S. healthcare, particularly nursing homes and emergency room medical staffing where Blackstone has a sizeable presence and a particularly disturbing record, even by the firm’s disgraceful business practices. U.S. healthcare is so corrupt that Bezos and Dimon, along with Warren Buffett, were forced to abandon their attempts to disrupt the industry.
Goodman expresses faith that the Biden Administration can make things fairer and more equitable. Biden’s covid czar until recently was Jeffrey Zients, who had no medical background and made millions wheeling and dealing in healthcare, including acquiring a controversial anesthesia outsourcing firm infamous for surprise billing when he was CEO of a holding company. Goodman gives an undeserved shoutout to Lina Khan, Biden’s 33-year-old FTC chief, who Goodman describes as an “iconoclast and an advocate for returning to deeper-set American traditions.” Khan recently allowed Grand Rapids-based Spectrum Health to take over suburban Detroit-based Beaumont Health, forming the biggest hospital network in Michigan, as well as the state’s biggest employer. Biden earlier publicly urged the FTC to curb hospital mergers.
Another Davos Man shortcoming is Goodman’s failure to acknowledge the role the media, including his publication, legitimizing “stakeholder capitalism” rhetoric and so-called ESG, or socially responsible investing. Bezos’s Amazon and Dimon’s JP Morgan Chase are respectively the 4th and 9th largest holdings in Vanguard’s fund promoting ownership only in socially responsible companies. If “trickle down” tax cuts are a “Cosmic Lie,” then ESG metrics are the “Cosmic Whopper.”
My criticisms aside, Davos Man is a remarkable and must-read book and should serve as a wake-up call as to the financial and economic horrors Benioff, Fink, Dimon, Schwarzman, and Bezos are inflicting on humanity. Goodman strikes me as good people; someone I’d love to meet for coffee at my local Peet’s. Of this I’m certain: Goodman will notice and feel for the homeless people hanging out in front of the store where late model BMWs, Range Rovers, Maseratis, Porsches, Bentleys, and other late model cars are parked in front.