WTF is the WEF?

Speaker 1

the World Economic Forum getting together for their annual meeting. And if there's one man that I need to talk to about this, it's Phil Magnus who, Phil, do you have the inside scoop? What is the World Economic Forum, the WEF? You just described it perfectly. It's like all the James Bond villains have descended into this mountain layer and they're up to no good. I don't know, more seriously, the World Economic Forum, it's a think tank, but it's not like a typical research institution think tank. In our world, we describe the nonprofit sector as something like the Cato Institute. or where I work, the Independent Institute. These are nonprofit entities that do research on topics of relevance to the public discussion. Davos, the World Economic Forum, does the same thing. But imagine that, although it's heavily intertwined with not only business leadership, but heads of state. government figures and it has been since the very beginning. So it started in 1971, I think was the first meeting and it was basically a sponsored think tank that was a project of the European Commission and several heads of state to bring together the business community. So it's like all the cronies in the same room where government officials and business leaders can work together and figure out how to enrich each other. It does seem like all of the villains from Die Hard get together every year. I wonder if like Transylvania wouldn't have been a better choice. mean, I've never been to Davos before. Is it a ski resort? What's going on there?

Speaker 2

think it's in the Swiss Alps. yeah, guess even there it fits the setting of all of these. you know, like spy movies and stuff where you see the riding the gondola up to the ski resort and then the evil specter leaders are all around a table. So it does have that vibe, although I think it's a bit more innocuous in the sense that it's just a vacation resort. It's a high-end ritzy place. So of course, all the political and business elites are going to go there on their private jets and spend a lot of money and enjoy themselves. So it's a lush conference in that. Yeah, one of the things that is always pointed out is that so many of the people who attend the World Economic Forum are often railing against climate change, carbon emissions, and all of that bad stuff. They're zooming in on a private jet and at a high-end luxury resort. This is not the Holiday Inn at the airport in Dayton. This is meant to schmooze and wine and dine. And I think it's pretty easy to think conspiratorially when you talk about, you know, this is sort of think tank plus, think tank with actual heads of state there. What sort of power do they wield?

Speaker 2

Well, it's not any official policy decisions that are being made there, but it's become an informal forum because if you have all these world leaders in the same room with each other, yes, they're obviously going to talk. And I think what we saw this week in Davos is the very top point of the discussion was Trump's tweeting about tariffs over Greenland and all the turmoil he had caused over the previous week. So yes, if you have the prime minister of Greenland and Norway, who he was also targeting with tariffs, are there in the same room with Donald Trump, obviously those issues are going to be talked about and worked out. Yeah, I saw something on X, which means it must be true. So it must be true. There was some talk about a possible purchase of Greenland for $700 billion. Right. And is that an official estimate? What's going on there? we think about it, you know, we're $39 trillion in the hole in the US national debt. Let's add another $700 billion to that. And the other version I was hearing that they were kind of trying to lure the population of Greenland, because there's 50,000 people that live there, by offering them all like a one-time payment to join the United States. All decreed by the US government. Of course, you know, this is a major appropriation. It would require congressional action if they even got to that phase. So right now, I think it's more in the roof phase, although Trump has hinted that yes, he wants to spend a substantial amount of public resources for Greenland. We don't know the exact details. We also know that Denmark, which currently owns Greenland, is not a willing seller of this. They've communicated that very clearly. And then you just add on top of it, it's not like the U.S. is suddenly excluded from access to Greenland.

Speaker 2

We have existing treaties going back to the World War II era that basically give us the right to station military bases there, wherever we want. So like buying Greenland for 800 billion or a trillion dollars or whatever it ends up being, it's just a vast expense of public resources to essentially get what we already have. access to this icy tip of the continent, this island up in the Arctic, that has some uses for military bases, a lot of the nuclear arsenal that was the main use in the Cold War, because it's close to the Arctic and it's strike capabilities. So I'm not going to deny that there was a military use there and it probably still is the case, but we were already given access to it by previous treaties with Denmark going back to the end of World War II. can't help but notice that the W E F is very close to the W W F. And it's also even closer to W TF, which what the F We're getting mixed martial arts in the White House lawn in a couple months is what it says too. So there seems to be like a theme that's going on here. It just seems like this is another kind of wacky storyline that's kind of come out of nowhere.

Speaker 2

piece of ice for world protection and they won't give it. They have a choice. You can say yes and we will be very appreciative or you can say no and we will Remember the idea that the US would go into Greenland, which we've never had an issue with before and and take it by force which Well, they ran a survey on it last week, it's like 75 % of the American population is adamantly opposed to this. There aren't any other issues on the horizon that you could get 75 % of Americans to agree on, but nobody wants this. And of course, President Trump spoke at the WEF this year. One of the topics that he had brought up was in regards to the word usury. What have happened to usury? So the U.S. government and the Trump administration in particular has been floating this proposal for a couple of weeks now to cap the interest rates that credit card companies can charge on Americans. You you take out a visa or a MasterCard, you sign these, all these forms, and basically what it says is if you don't pay off your bill, your accrued bill for the course of the month on the due date, they start charging you interest on that credit. And it carries over.

Speaker 2

And if you are really late in paying off your bills or you go multiple months with just doing the bare minimum, the rates that start to kick in are traditionally pretty high. It's about 20%, 25%. and it starts to compound. So you can find yourself in a lot of credit card debt if you are not paying off your bill. But we think about it, this is the economic model of the credit card. Because what is the credit card? They're essentially extending you a short-term loan. So when you go to the store out of convenience to purchase something, that's not money out of your bank account. You aren't debiting it, you aren't writing a check or pulling cash out of your wallet. You're taking credit out against the card to get the product now with the promise that you're going to repay it. And to get a company to do that, to even extend you credit, they have to assume some risk. Because what's to stop you? You take out a credit card, you go spend $10,000 on booze and partying or whatever you're going to do, and then you hightail it out of the country and never repay it. Well, the credit card company is still stuck with that bill. So one of their ways to offset that is you have interest penalties if you do not repay it. And the interest penalties allow people that in a lower credit history or maybe are at higher risk of this type of behavior to still nonetheless get the credit card because the sharp penalty is the mechanism of enforcement. They aren't giving a collateral to MasterCard that says if I don't pay my bill, you can come in and seize my television. They're just buying the television. with the promise that they're going to get hit with very high interest rates. Now Trump has come in and he said, we don't like high interest rates. We're going to cap it at 10%. And it sounds like very populist. It sounds like something that people want to, oh, he's fighting for the common man because yeah, 20 % interest rate, that's unfair. But the reality here, it's like a price ceiling. It's a price control.

Speaker 2

It misunderstands what interest rates are. The classical economic definition of an interest rate, it's basically the price that's assessed on having future money right now. So I can use something right now that I don't have and the price should move, it should fluctuate based on assessments of the overall interest market. And when you put a cap on that, It doesn't mean that prices go down on future money. It means that the companies themselves no longer extend credit to high-risk borrowers. If MasterCard and Visa and American Express can't charge that penalty to a high-risk borrow, well, what are they going to do? They're going to say, when that person comes in and applies for a credit card, denied. They'll stamp a denied across it, and then that person has no access whatsoever to credit. Instead, if they need to make a big purchase they can't afford right now, they got to go to a loan shark, a payday loan, an even riskier, higher interest proposition. So yeah, we're in a really strange territory that Trump has chosen to focus on this, and he made it a big part of his Davos speech. Again, I've been seeing a lot more people online come out against usury. usury, guess, is kind of a biblical word. It's a word you would expect to hear kind of at the WEF, where it's kind of like a shady group who's speaking up through time and wanting to impale the userers. It's like nobody expects the Spanish Inquisition, that kind of...

Speaker 1

Yeah, exactly. But I would I always wonder like for those people who are, you know, dead set against it. It's like, well, how many of you have half a million dollars ready to give out to a as a first time home loan or something like that? I mean, what is the incentive to part with money, not get anything back from it on top? do not lend money out of the generosity of their heart. They're in a business here. Now to go back to this term, so usury, it's like an ancient, you know, it's a biblical term, and it referred to, I guess on a moral level, it's a sin. And that is to unfairly charge interest for lending money to a friend or a family member. But it's referring to the personal relationship. It's taking advantage of someone and saying, ha ha, I'm going to lend you money and now I'm going to hold that over you for the rest of time and basically abused the fact that you were in debt to me. So yes, there's a moral element of that, and that's the old medieval-era usury. The modern concept of charging interest, though, is a reflection of economic developments that occurred since the Middle Ages to the present day. It's more of a contractual arrangement. mean, no one is... unaware that when they take it alone that they're signing up for this. So they're misapplying an old term from the medieval clerical era to modern day economic practices that are contractual through formalized institutions. You know, you're sending ships off to the New World. Someone has to pay for that, and there's a huge risk involved. The ship could get wrecked. How do you insure that? There's debt that's taken on to do greater and greater economic activity with higher risk, and a market emerges. So it's no longer just a static state of, lend you money, you pay me back. It's, I assume the risk. Here's the price of that risk. You pay me back. Or there's some sort of a mechanism to cover it if you don't.

Speaker 1

At the WEF, are going to be lot of dealings happening behind the scenes. Obviously, there are lot of discussions that happen and speeches. If you look back at the history of the WEF, it seems like a lot of the craziest notions kind of get the most eyes on it. One thing that I'm sure everybody listening has heard in one form or another, and this came out of the WEF's... a blog post and a video it said, you'll own nothing and you'll be happy. You'll own nothing and be happy. Later.

Speaker 2

The WEF does attract not only government officials, but those that are of a particular technocratic orientation. This is referring to a slogan of people who think that they have, whether it's through advanced AI and computers or modern technology, that they've solved the problem of scarcity just by technocratic planning of the economy. So it's like a haven for central planners to descend and play in their sandbox. And you get these really far-fetched ideas out here missing the entire point that a centralized economy fails because it cannot encompass and match individual preferences to points of knowledge that you need to carry out an exchange. Well, in a technocratic utopia that you fantasize and dream up in your head, we've abolished private property. Doesn't work in practice. It's just another iteration of utopian thinking that we've seen for centuries when people engage in the economic world. What type of idiot would create a system where you have to rent everything? It seems like, it would be kind of an ultra-rich landlord. And government officials that all think of themselves as altruistic and we're in public service. We're acting on behalf of the public, even though a lot of them are just enriching themselves or they like political power. So it's that whole type of a mindset. We stick the DMV in charge of the economy. The DMV people are actors there. They're not probably acting in your best interest.

Speaker 1

Yes, you would think, know, here's an annual meeting where kind of like these ultra rich capitalist landlords get together to rule the world or at least attempt it. You would think like, you know, that's something that, you know, the socialists must hate because, know, this income inequality sort of thing. But then everything that they're recommending has like a socialist tinge to it. It's odd because they have a reputation of being capitalists, as you know. It's big businesses also flying in there to meet with government leaders, but they're actually the types that are advocating for government policies that increase the footprint of the state in everyday economic life. So they're not capitalists at all. They're something else. No, and with that you have something like, quote, the great reset of capitalism, which was pushed not too long ago. Well, again, it's back to this utopian thinking. It's the notion that the actually free market-ish, I say ish because we've never really had kind of a true free market in the 20th century, but the world liberalized. Markets freed up, taxes came down, regulation came down. There were certainly those types of trends playing out even though the state and government expending has been like an upward trajectory since the end of World War II. But nonetheless, you saw elements of market liberalization and that was seen as, know, a good for while it lasted, but then around the early...

Speaker 2

2000s, 2010s, you start seeing lists of grievances about that emerge. And it's like, OK, well, capitalism's allowed a lot of growth, but inequality's gone up, and we left people behind. Or climate change. Climate change is looming over us, and this is a fault of the market economy. So you start getting these utopian ideas, and people person out. There's Klaus Schwab, who was the original organizer of the WVF. He seems to have a thing for this. He's an abstract academic that loves utopian ideas. ideas and the great reset is, well, we can plan. a way that weans the world off of this previous liberal order in the wake of World War II, and we can replace it with something more technocratic that aligns with our utopian vision for society. So this is pie in the sky central planners imagining what they could do. Now the real trick is it sounds all scary. It sounds like this giant conspiracy's afoot. I actually think a lot of these people are just bumbling head in the clouds faculty lounge types that imagine that they could run the place and there's no real mechanism of what they're actually doing. At the end of the day, they're technocrats. They think that they have the underlying theories of how you can allocate resources across society in better ways than the bottom-up decentralized mechanisms of the free market. They say, well, we can do it better from the top down because we know what the world needs.

Speaker 2

And what the world needs also has to be compatible with our climate agenda. It also has to be compatible with our normative vision of fairness, which is, well, it's like a social democratic European welfare state. It seems to always align with this technocratic vision. And it's like, we're going to centrally plan ways to make the world better and reshape it in our vision. Technocrat sounds scientific. It sounds like, this guy must be wearing a lab coat and knows exactly what he's talking about. Do they ever refer to themselves as technocrats? Because anytime that I use it, it's always as a put down. Yeah. I'd really have to look into that. I think they would probably shy away from the term, although you see elements in it and the types of policies that they espouse. So a lot of them are really attracted to AI and computer technology. A lot of them view themselves as experts. So it's this progressive expertise mindset that we have studied engineering and economics and policy and climate science and all this stuff. And we know our knowledge. so therefore we know what's best. It's making the leap between the abstract expertise and a technical issue into public policy. So let's implement it. And there's always this assumption that, well, if the expert knows the issue, they also know what to do about the issue and problems that arise. And yet,

Speaker 2

You know, like the average climate scientist probably has no more particular expertise on how government actually operates and runs and how to navigate corruption, how to navigate unintended consequences than the random person you meet at the gas station attendant. In fact, I'd rather have the gas station attendant probably making policy for me than a climate scientist who imagines they can design society and therefore proceeds ahead with trying to design policy that they don't really understand. And that leads right into one of the other things that have come out, which is net zero. It's interesting. We've been hearing so much about climate change for so long. And then recently, guess, Bill Gates got the memo that's like, yeah, we shouldn't be as worried as we used to be. Like the world's not going to end, even though I've scared so many generations of people into thinking the world is coming to an end. Maybe we'd have to worry about that. But I mean, I would put a lot of the blame on actors like the people that... literal actors, great American actors, but also actors who take part in like things like the WEF. AI celebrities.

Speaker 2

Celebrity spokesman is Greta Thunberg. It's also Hollywood actors that are, you know, just because you're a great actor in a movie doesn't mean that you have some special knowledge of climate change and yet they're out there front and center. So, yeah, so this Net Zero movement really emerged out of Europe over the past 10 or 15 years. And this is the idea that you can balance out emissions. Carbon is bad. Carbon causes climate change. And if we don't do anything about it, you know, all the apocalypse. will happen. So therefore, we need to wean society off of fossil fuels, off of carbon emissions, switch to other energy forms, and bring us into neutrality if we're ever going to beat the problem of climate change. So again, a very technocratic solution, imagined from the top down for society. But it gets into real practical problems, because what it did in Europe is it induced them to start shutting down power plants. Let's go to wind energy or solar energy, which they're part of the grid, but they're not nearly as productive or stable. And stability is the big consistency, because to generate wind energy, you need wind. And sometimes the wind dies down. To generate solar energy, you need light. Sometimes it's overcast. So it becomes harder and harder to store energy. from those stable sources, whereas like a traditional power plant, you just fire it up when you need it and it runs around the clock. So several European countries, they start phasing out their power plants. They cut it down based on calculations they've done that says, if we assume this wind energy, we have enough windmills to make up for the loss of the power plant that we've just shut down, we'll be fine. But Those calculations assume peak production of the new wind or solar sources as a one-for-one trade-off with what they've just shut down. And it turns out that if you fall below that peak production, well, suddenly you don't have any electricity. And then you've got to go ask Putin for resources.

Speaker 2

Russia. They're like, we'll sell you natural gas. So a lot of Europe has kind of stumbled into this mistake because they assumed they could centrally plan net zero in their electricity production. They shut down existing capacity. And then the ideal conditions that they thought they have are not met. And suddenly there's no power. I guess to the question of what sort of role and power does the World Economic Forum hold, mean, they obviously had a big impact on, you know, legislation in all of these countries that, you know, can lead to... Because the politicians are there. You've got the prime ministers and presidents and world leaders that are there. It's not like they've convened a Congress to map out, here we go home to our countries and this is what we're going to implement. But they allow some of these ideas to percolate. And you get eccentric technocrats in the room putting ideas in front of politicians and the business community. And you do so in a circumstance when there is taxpayer money at home to be grabbed that increases my power as a politician or gives me contracts as a titan of industry, well yeah, I'm going to go home and lobby for that. And when you talk about, you know, other ideas that are on the menu in Davos, one thing that is on the menu is this idea of switching away from traditional meat production in a sense, eat the bugs. Which I find interesting because I would love to see like what these very powerful people are actually eating in Davos. I'd love to see those dishes.

Speaker 2

So to eat the bugs is really everyone else should eat the bugs. And this comes, again, part of it is driven by the climate agenda. These people are obsessed, and I'll put it frankly, they're obsessed with cow farts. Cow farts are the most delicious part of the cow. For those of you who are real connoisseurs. And the claim here is because we have a very heavy meat-based diet in large parts of the world, this has artificially increased the cow population because we need hamburgers and steaks and other delicious things that we like to eat. What that means is there's a ranching and farming industry that is very cattle specific. You increase the cow population, they fart more, farts go into the atmosphere and cause global warming. So the narrative here is, hey, we're technocrats, we're going to fix global warming, therefore we have to reduce methane emissions from cows. How do you reduce that? Well, you have to change people's diets. Well, the technocrats will get that, well, maybe, okay, you can't get enough protein if you're just munching lettuce all day, but what's another good source of protein? Bug. In the past I've had grasshopper tacos, which have been fine, you know, it's like, I'll try that. being adventurous. But the idea that I would completely trade out chicken and pork and beef and just eat the bugs because the call came from on high, I'm not gonna do that, sorry.

Speaker 2

That's the whole thing. They've cut out human preferences and our express needs. And here you have a technocrat that's like, well, preferences, that's way at the back of my agenda. I just care about climate change. So I have the solution. I can order it from on high. We'll tax the cows. We'll tax the chickens. And we'll subsidize the grasshopper bars that we're trying to feed people. And it's like, we fixed climate change. but it's completely written out human preferences. It's really difficult to think of these technocrats in a way that is positive. basically what you've kind of like run down is here's an attempt at control. When you're taking away choices, when you're forcing your ideology on other people, you want control. And it's really tough not to see something like that as nefarious, especially when these individuals are getting together in a mountain. There's a mountain layer. I they were getting together in a volcano. If they were getting together in the belly of a volcano to have these meetings, that would be something. I think it's sort of my hope that no matter who our president is, that the United States will always be independent of these forces out there. That, okay, we'll listen to those ideas, but ultimately, we as a country and us as individuals will be able to make the choices that we deem are best for...

Speaker 2

It'd be a great movie.

Speaker 2

Exactly, and that comes again from our democratic constitutionalism. A lot of these ideas that come from the technocrats on high would be deeply unpopular if they were presented to the American public. I mean, there's a way to get yourself voted out of office is to try to decree from on high that hamburgers are banned in the United States and you have to switch to veggie burgers and bugs. Well I gotta say, there's nothing like washing down your bug protein with a cold beverage and happy hour econ playing on the jukebox right now. Phil, thank you so much for this. Absolutely. We'll see you guys next week. you