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The elite retreat


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The elite retreat

Nancy Bush is a veteran bank analyst.The following does not constitute investment advice, and the views and opinionsexpressed in this piece are those of the author and do not necessarily representthe views of S&P Global Market Intelligence.

There'snot much that's fun to think about these days. There was the depressing spectacleof the circular firing squad in Cleveland — where the bizarre sight of Don Kingpraising the racial outreach of Donald Trump was actually one of the less-surrealevents — and it's still hard for me to see how the Party of Lincoln came to be areality-free zone. Then there are the horrors du jour — the assassinations of policeofficers in Dallas and Baton Rouge and the mowing down of innocents in Nice, France,as only the latest examples of a murderous streak of violence that no security forceanywhere seems to know how to avert. And here in the Southeast (and throughout muchof the nation) there is a summer so relentlessly hot and so dry that I saw one localsign that exactly captured the mood: "Satan called. He wants his weather back."

If therehas been one small source of entertainment this summer, it has been watching theglobal media pundits and various highbrow economists and others fall all over themselvesin trying to retreat from their status as part of the "global elite."While the success of the Leave campaign in the U.K. seems to have been the precipitatingevent — how could it have happened? — the ascent of Trump and his seeming abilityto give Hillary Clinton a run for her money in the U.S. presidential race has sentsome of them (The Economist and the L.A. Times, most notably) utterly over theedge in their predictions of global chaos and American ruin should Trump win. TheL.A. Times even went so far as to predictthe possibility of a military coup against a President Trump, and I would urge theeditor there to buy the CD of the terrific 1964 movie "Seven Days in May"and show it to reporters. (Its message is simple — American coups are really, reallyhard to do.) My own view on the subject is pretty direct — we survived Jimmy Carter,and enough said on that.

So, I'vebeen thinking — what is an "elite," anyway? As one clever Atlanta bankerfriend of mine said, it's anybody who has more than you do. And I think that tosome extent, that statement is true and certainly reflects the growing class divisionin America. I also have to admit that I probably am one of those elites in the eyesof many, given my long tenure on Wall Street, my association with the financialservices industry and my long period of enforced residency in the NYC area. ButI would also point to my heritage and to my family — half of which has a two centuries-longtenure in the Appalachian South — as evidence of a background that was in no wayinformed by association with any elite group. (As one who remembers vividly my grandfatherplowing his fields with mules and my grandmother churning the family's butter, mybackground can perhaps be best described as "red clay Georgia and backwoodsTennessee.")

My yearson Wall Street certainly exposed me to a whole different side of life and gave meentry into a world with which I was not previously familiar — that of hereditarywealth, Ivy League educations and a certainty of the future. I also was very fortunateto have met some of the smartest people around — many of whom shared my own plebeianbeginnings — and we knew ourselves to be some of the luckiest people on Earth tohave been able to lead Wall Street lives. I also found that those two groups — oldmoney and new street smarts — mixed pretty easily and that the equalizing factorswere how hard you worked and how much knowledge you could impart. (And how muchmoney you could make for your clients and your firm, of course.)

Thisall seems to have changed in the years since the Financial Crisis, and the new elitethat has arisen seems to be characterized by a "we know what's best" mentality.They seem to be mostly academics and economists, with a smattering of hedge-fundbillionaires and leaders of international financial institutions thrown in for goodmeasure. And there have been, of course, the financial journalists who have decidedthat their mandate is not merely to report or to opine, but that they must adviseindividuals and governments what they should think and where they have gone terribly,terribly wrong.

Thesefolks just seem to have awakened to the fact — especially in the U.K. — that thehoi polloi really do not care what they think, and they all seem to be shocked —shocked! — at that revelation. While I love the Financial Times of London as a source of (mostly) unbiased reportingand as a source of great book reviews, gardening advice, etc., they do have a fewcolumnists who have mistaken the importance of their platform for the importanceof their own views. Chief among these is Martin Wolf — who after penning columnstitled "Why I believe Britain belongs in Europe" (June 21) and "Howto defeat rightwing populism" (May 24) — wrote the following column on July19: "Global elites must heed the warning of populist rage." Gee — do ya'think?

And ofcourse, the U.S. has its own cadre of economic elite — Paul Krugman comes most readilyto mind — and they seem to be trying to figure out exactly what all this populistpushback means for the future (and for their livelihoods, most likely). Steppingboldly into the breach was that Harvard bull in a china shop, Larry Summers, whowrote in the FT on July 10: "Votersdeserve responsible nationalism not reflex globalism" and went on to say: "Whilethere is a strong case that the U.S. is better off than it would have been if theNorth American Free Trade Agreement had been rejected, the most extravagant predictedbenefits have not materialised … The willingness of people to be intimidated byexperts into supporting cosmopolitan outcomes appears for the moment to have beenexhausted." Needless to say, I almost busted a gut while reading that one,and I wonder if Summers had any idea of the dripping hypocrisy of his words.

As Irecall, Professor Summers, George Soros (who is busily hatching a plan to save Europefor only $33 billion per year), Madame Lagarde, Joseph Stiglitz, Nouriel Roubini,et. al., are regular attendees of that ultimate elite retreat held in January inDavos, Switzerland — a.k.a., the World Economic Forum — and I would love to be afly on the wall at the next one. I would suggest that perhaps it might be wise toshift the venue to a slightly less posh locale, perhaps one where globalizationhas been perceived to have been a problem — say, a place like Cardiff, Wales, orBirmingham, England — and that the partiers forgo the traditional Bollinger andcaviar in favor of less ritzy fare, like pigs in a blanket (love those!) and onecolor or another of Guinness. (Get used to it folks — it's how the other 99% live.)And if I were them, I'd really get off that climate change thing for a while — it'simportant, but it's really not the world's most pressing concern right now.

Yes,the world is reordering itself, and I have not a clue how all of this is going toturn out. I said to a friend a couple of days ago that I did feel that we were livingin an extraordinary time, and that I wondered if our grandparents felt the sameway in the years after the Great Depression as they looked at the changed worldaround them. But then I was reminded that they also had the reassuring voice andsteady hand of Franklin Roosevelt, who — in a supreme irony — came from one of  America's oldest and most elite families, butwho came to be beloved by common people everywhere (and was especially beloved herein Georgia, due to his Warm Springs connection). All I can pray is: God, pleasesend us an elite — of the right kind — of our own.