U.S. criticized for role in global crisis at economic forum
'Blind pursuit of profit' and 'a lack of self-discipline' cited as reasons for turmoil
Last Updated: Wednesday, January 28, 2009 | 9:25 PM ET
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The relentless pursuit of profit has been a key factor leading to the worst global financial crisis since Great Depression, Russian Prime Minister Vladimir Putin told attendees at the World Economic Forum in Switzerland on Wednesday.
Putin, who called the ongoing crisis a "perfect storm" that was wreaking destruction on all corners of the global economy, refrained from blaming the United States directly but pointedly noted that just a year ago in Davos, U.S. delegates emphasized the country's fundamental economic stability.
"Today, investment banks — the pride of Wall Street — have virtually ceased to exist," Putin told the more than 2,500 business and political leaders who are attending the five-day meeting in the Swiss Alps.
Chinese Premier Wen Jiabao also criticized the United States and Western financial institutions at the meeting on Wednesday.
Wen cited "an unsustainable model" of low savings and high consumption, a "blind pursuit of profit" and "a lack of self-discipline" among financial institutions, as well as a failure of regulators to keep up with new financial instruments.
'Depressed and traumatized'
People are "depressed and traumatized," Rupert Murdoch, chief executive of global media conglomerate News Corp., said at the first full day of the forum. He noted that worldwide, some "$50 trillion of personal wealth" had vanished since the crisis worsened with the Sept. 15 collapse of U.S. investment bank Lehman Brothers.
"The size of the problem confronting us today is larger than in the 1930s," billionaire philanthropist and investor George Soros said.
Economist Stephen Roach gave a grim forecast for the global economic outlook, saying growth worldwide in 2009 was only likely to be about 2.5 per cent — what the Morgan Stanley Asia chairman and longtime Davos attendee termed a "near recession."
The head of the forum, Klaus Schwab, has called for unity among companies and governments to steer a path out of the global financial crisis.
"We need a well-functioning financial community, we should not forget. Otherwise we don't have a well-functioning economy," Schwab said.
Profit, once the hallowed byproduct of capitalism, was the bogeyman of Davos 2009.
"Today, people from every corner of the globe ask how it was possible that decisions could be taken, led by greed or incompetence or with no effective oversight, decisions that had terrible consequences, not only for the global economy but also for real people who have lost their pensions, their homes, their jobs," Schwab said. "They may not understand what went wrong, but they are clear that their leaders have let them down."
Though capitalism still had its supporters, participants debated ways to make it more responsible and the role of government in easing the way toward recovery.
Underscoring the sober mood of the year's theme "shaping the post-crisis world," some of the glitz has been scaled back, and previous celebrity guests such as Angelina Jolie, Sharon Stone and Bono are not attending.
With files from the Associated PressShare Tools
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