Davos: A Family Reunion for the People who Broke the Modern World

For the past several decades, world leaders, CEOs, tech titans, billionaires, philanthropists, and celebrities have descended upon Davos, Switzerland with the goal of “improving the state of the world.” Anand Giridharadas, author of Winners Take All: The Elite Charade of Changing the World, says they are part of the problem.

Trade wasn’t working for everyone.

Dynamic scheduling, underpaid, contractors, fight minimum wage, more flexible labor, tax cults for the wealthy anti-inheritance taxes, evade existing taxes, rewards offshoring, expresses no loyalty to communities. (5 min)

I don’t think arsonist need to attend at a firefighter’s convention.

Poor people are very accessible. They want someone to bear witness. They don’t have publicists.

You can’t understand inequality without understanding rich people and the systems they use to justify themselves (10 min)

Today’s elites are among the most socially away, yet also predatory

I don’t think we have free markets, we have a capitalism of monopoly, and rent seeking

Jane Meyer’s Dark Money: how we got here.

Business didn’t have power (Nixon started the EPA) and worked to understand it. They used an alliance with evangelicals and philanthropy to build power.

History is life a mob boss: we can do this the easy way or we can do this the hard way.  It can go down like the civil war or women’s suffrage.

82% of new money was in the 1 percent’s hands.

It’s going to require many to become traitor’s to their class.  If Gates devoted as much to pushing an estate tax, he could have a bigger impact.

I think things are changing.  There aren’t going to be as many Goldman Sachs and McKinsey people in the next administration.

Mark Zuckerberg, Let Me Fix That Op-Ed You Wrote

I can tell the people what it is you’re really trying to say.

Mark Zuckerberg has written an op-ed, and I wish he had not.

It was titled “The Facts About Facebook.” I would give that one tweak. I’d call it “Mark’s Facts About Facebook.”

In a piece for The Wall Street Journal timed to the social networking giant’s 15th anniversary, its once-young, now-not-so-young chief executive and founder tried and tried to persuade readers that they shouldn’t be afraid of what he has wrought.

But the post was essentially the greatest hits that we have heard Mr. Zuckerberg sing for a while now. He focused on the enormous advertising system that powers Facebook, while ignoring almost entirely the news from the last disastrous year, including Russian abuse of the platform, sloppy management of data, recent revelations that the company throws some pretty sharp elbows when it needs to, and more. You kind of get why Mr. Zuckerberg would want to forget it all.

Should I be annoyed by this? One person who favors Mr. Zuckerberg told me no, pointing out that the media is irked when he says nothing and even more bothered when he says something, so he cannot win whatever he does.

.. O.K., so instead of just criticizing, I thought I would help him with his piece, given I do this for a living and he does not, by rewriting his work. Here goes:

MARK WROTE: “Facebook turns 15 next month. When I started Facebook, I wasn’t trying to build a global company. I realized you could find almost anything on the internet — music, books, information — except the thing that matters most: people. So I built a service people could use to connect and learn about each other. Over the years, billions have found this useful, and we’ve built more services that people around the world love and use every day. Recently I’ve heard many questions about our business model, so I want to explain the principles of how we operate.”

KARA TRANSLATES: We old now. We big now. It came from my one really good idea: AOL sucked and I could do better and I did. Now the noise has reached me up on Billionaire Mountain, so I am going to have to pretend that I care.

MARK: “I believe everyone should have a voice and be able to connect. If we’re committed to serving everyone, then we need a service that is affordable to everyone. The best way to do that is to offer services for free, which ads enable us to do.”

KARA: No rich person is going to pay too much for this muffler, um, social media service, and poor people aren’t going to pay us at all because they apparently don’t have money. So everyone will have to endure the ads that we shovel out and stop griping, because free ain’t free, people.

How Jeffrey Immelt’s ‘Success Theater’ Masked the Rot at GE

A culture that disdained bad news contributed to overoptimistic forecasts and botched strategies

Jeffrey Immelt, the longtime boss at General Electric Co. , was a polished presenter who held court each year at a waterfront resort off Sarasota, Fla., where industrial executives and Wall Street listened for his outlook on the conglomerate.

“This is a strong, very strong company,” Mr. Immelt said at the event last May.

.. GE’s precipitous fall, following years of treading water while the overall economy grew, was exacerbated, some insiders say, by what they call “success theater.”

Immelt and his top deputies projected an optimism about GE’s business and its future that didn’t always match the reality of its operations or its markets

.. “The history of GE is to selectively only provide positive information,” said Deutsche Bank analyst John Inch, who has a “sell” rating on the stock. “There is a credibility gap between what they say and the reality of what is to come.”

.. “GE itself has never been a culture where people can say, ‘I can’t.’

.. GE once had the highest market value of any U.S. corporation. Its alumni have gone on to run companies such as Boeing and Chrysler.

.. Few knew just how badly ailing the American icon was. Even GE’s board didn’t realize the depth of problems in the biggest division, GE Power, until months after directors had replaced Mr. Immelt

.. A spokesman for the former CEO pointed to his decision to purchase $8 million worth of GE shares in 2016 and 2017. That included 100,000 shares in mid-May at a price roughly twice today’s.

.. But Mr. Immelt didn’t like hearing bad news, said several executives who worked with him, and didn’t like delivering bad news, either. He wanted people to make their sales and financial targets and thought he could make the numbers, too, they said.

.. Over the past three years, GE spent more than $29 billion on share repurchases, at an average price of almost $30, twice the current level. That included billions of dollars spent less than a year before GE suddenly found itself strapped for cash last fall.

.. Trian Fund Management LP, which invested $2.5 billion in GE in 2015, wanted it to buy back even more stock. The activist investor urged the company to borrow $20 billion for repurchases (which it didn’t do), based on a belief that the profits Mr. Immelt was promising would send the stock soaring when they arrived.

.. Instead, at Mr. Immelt’s retirement in August the stock was below its level when he took over 16 years earlier. Including dividends, GE gained 8% with Mr. Immelt at the helm, while the S&P 500 rose 214%. Since he stepped down, the stock has lost about 43%, erasing almost $94 billion in market value

.. Instead of $2 a share GE now projects $1 to $1.07.

.. Several directors discussed in November whether the entire board should be fired

.. Jack Welch, delivered steady profit growth and sent shares soaring in the 1980s and ’90s by striking deals and aggressively slashing costs and jobs. Mr. Welch also built up a huge lending business called GE Capital that for years generated outsize profits—but nearly sank the company during the financial crisis on Mr. Immelt’s watch.

.. Results were strong at two of GE’s big units, aviation and health care (medical equipment).

.. Acquiring companies that help drillers pump and transport fuel, he had GE spend more than $14 billion over 10 years, most of it based on higher oil prices than today’s.

.. Mr. Immelt’s optimism was part of the problem, according to some people close to the situation. They said he told the board that management had identified risks in the power business, yet downplayed them. The probability and risk were way off, one said.

.. Lisa Davis, the U.S. chief of Siemens, said the German company’s executives “have seen this decline coming for the last several years.” So Siemens had reduced its capacity in its power business, she said, while GE bought more.

.. According to former executives, the upgrades meant lower service fees for customers, in exchange for one-time upgrade costs, meaning that future sales were being pulled forward.