Allianz CEO: Disconnect between regular people and political establishment is a danger

“And remember, this year a lot of people are going to vote, so we need to make sure that they vote for the right things and are not just venting anger.”

Yes, there is a serious divergence but we wonder what exactly the CEO of Allianz, Oliver Bäte would prescribe to remedy this given his statement that he and his cohorts at Davos need to make sure that the hoi polloi “vote for the right things”. It sounds to us that his issue is not so much with the disconnect between people and the old political establishment but that regular people are rejecting the old order en masse. Herr Bäte sees what we also see, the rise of an informed middle class and he is concerned. The Internet has opened the gates. Everyday people have become more sophisticated and as such they are restless when the old order refuses to acknowledge that times are changing.

That change is coming from a coalition of the “working”, middle, and upper middle classes throws the Davos folks for a loop. It shouldn’t since many of the people running the show in Davos come from such backgrounds. But memories are short and priorities change when one gets to sit at the crony table.

One thing we often hear is that the powers that be are concerned with the people’s lack of trust in their governments. The implication being that the people are at fault, not the governments for this disconnect.

However if governments lose the trust of their people they need to figure out why, and quick. To ignore such a situation is historically unwise. Yet, many of the people sitting on panels in Switzerland this week talking about the future of the world continue to think that the people need to bend to their will, their worldview and not in any way the other way around. This is foolish.

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In fairness, in addition to saying that people need to “vote for the right things”, Oliver Bäte did also say;

(From CNBC)

“You’ve seen recent elections in the Netherlands, you’ve seen it in France, and societies are polarizing because our leaders are not addressing the needs of the people,”

OK, so which is it?

There is a sense among the people in the informed middle class that Davosman holds them in contempt, that Davosman sees them as something to be managed and barely tolerated. Quaint notions of inherent human dignity, no matter one’s position in the crony hierarchy, only get in the way of moving the world “forward” as Davosman sees fit. The informed middle classes are considered retrograde in their political disposition, whereas Davosman (in his own mind) constitutes a vanguard of top down progress. You think you own your country? You think your taxes are too high? You think your priorities should be addressed? Ha. You can stuff it. Davosman is in control, and always will be.

But again, this is an unwise disposition historically speaking. Orders like the one we are witness to right now tend to collapse if they do not adjust. Right now the old order thinks it can continue to ride things out. It thinks that the current crony system, which has always bailed them out and which has always insulated them will continue to do so.

That was the great lesson of the Crash of 2008 for Davosman. The world can go to hell, but they, because they are connected across political and financial networks need not worry. But this is only partly true today. The connected are subject to much more risk now than 15 years ago.

If Davosman continues to dismiss the informed middle class, the people driving what some call “populism” around the world, the result could be ugliness for not just the non-cronies this time, but for the cronies too as fundamental societal structures, important societal structures, start to look antiquated in the eyes of, first the populists, and then in the eyes of Davosman. That would be a very dangerous thing for everyone.