The 40th World Economic Forum (WEF) was held in Davos, Switzerland in January. The WEF is “an independent international organization committed to improving the state of the world” by engaging leaders to shape policy. There are 1,000 business members, plus government, non-governmental, and special interests. Some participants are familiar, such as Condoleezza Rice and Bill Gates, but most are as unknown to us as we are to them. The elite “internationalists” talk about global problems and solutions in rhetoric with a “One World” flavor. A major product of the WEF is a “Global Risks Report.” The theme for the sixth report is “Shared Norms for a New Reality.” It identifies two “cross-cutting” global risks.
One is economic disparity, both within and across countries. Though there have always been disparities, the ability of better and more timely communication has made issues such as health care, illicit trade, migration and immigration, food insecurity, terrorism, and weapons of mass destruction more visible. Population growth, increasing unemployment, and education failures are noted as causing many problems. National solidarity is seen as decreasing, while subgroup identities are becoming stronger and more contentious. “Traditional” forms of association are eroding and trust in institutions is decreasing.
The second risk is global governance. Until recently the “Washington Consensus” was considered the international governing standard. The Washington Consensus was a set of ten free-market policies that were generally pursued by both advanced and emerging countries. Specific policies include reducing government deficits; tax reform, privatization, liberalization and deregulation of trade, and export led economic growth. Unfortunately, this approach is no longer considered the standard.
Negative components of the global governance issue include high debt levels, asset price decreases, savings imbalances, long-term unfunded liabilities, and government bailouts. These are issues that drove November 2010 election results. As a result Republicans now control both the Congressional House of Representatives and the Iowa House. Additionally, both the U.S. and the Iowa Senate almost became Republican controlled. In not only Iowa, but also most of our surrounding states, the Republicans also won the Governors races, campaigning on fiscal responsibility and economic development.
It is apparent that Global Risk Report issues are playing out today – in Iowa. Our families and workers, political and business leaders are uniquely positioned to proactively address these issues. If government policies and business development are positively handled here, we will more broadly influence outcomes and results worldwide than our status as “fly-over” country might indicate. Specifically, Governor Terry Branstad and the Republican controlled House of Representatives are attempting to address these issues. House File 45, the Taxpayers First Act, addresses them in a pro-active, positive way, including pre-school funding, budget cuts, and management of state employees. It is to be hoped that they have the “will” to stand by their decisions. Those who refuse to consider changes, such as unions, demonstrate the fracturing of overall social goals in favor of subgroup identities.
Deborah D. Thornton is a Research Analyst at the Public Interest Institute in Mount Pleasant.