Craig Copetas

Klaus Schwab tried to warn them, but the CEOs wouldn’t listen, said Craig Copetas. Schwab is the chief organizer of the World Economic Forum in Davos, Switzerland, where the global business elite gathers each year to think big thoughts, schmooze, and make deals. In recent years, Schwab tried to engage delegates on questions of “asset-price bubbles in housing, stocks, and other financial instruments.” But when he raised those issues, Schwab says, delegates “treated him like ‘Cassandra.’” Having paid up to $750,000 to attend, they figured they could set their own agenda. Schwab eventually resorted to attention-getting “stunts,” such as the 2004 panel that asked “whether extraterrestrials had taken control of Wall Street.” More serious panels focused on the U.S. housing market and the “cascading loss of confidence” that threatened financial markets. But the CEOs preferred “racing Audis on the ice of a nearby lake and attending snow-polo matches.” It was, says Schwab, “denial, total psychological denial.” You would think next year’s conference will be much more sober. But British hedge fund manager William Browder, a Davos regular, is skeptical. “Moderation,” he says, “is something the private sector doesn’t do very well.”