From Davos: Is sovereign debt the next big crisis?

One of the most frequently cited reasons you hear that attendees come out to Davos is that you can do about one month of meetings in 5 working days. In the ever faster, hyper-productive, blackberrified world, that’s about as compelling an argument as you can have.

For the record, I hate blackberries. They don’t sit well with my underlying sense of balance (or my tendencies towards compulsiveness), and it would make my colleagues utterly miserable. So I don’t do it. Neither does U.S. Congressman Barney Frank, who I met with this morning. He then went further. "I don’t do blackberries, I don’t know CPR, and I can’t put out a fire," he told me. His work is important, but apparently he’s useless in emergencies.

Fortunately, nothing was burning during the CNBC debate this morning. Though Barney did get himself plenty worked up. We got into it a little bit on U.S. military spending, of all things. His top argument for balancing the budget was to slash military expenditures. I managed to get him to admit we needed more funds for cybersecurity. His fallback position was to stop spending for weapons that don’t have enemies. If I could get him to add the caveat, "likely enemies over the next 20 years," I think we’ll have a winner.

I thought the debate itself was well put together. Harvard’s Ken Rogoff probably pulled off the best intervention on the dangers of sovereign debt. He’s utterly sensible and combines gravitas with soft charm. The fellow also does his homework — he mentioned to me his last book took seven years to finish properly. Not so with Lloyd’s chairman Lord Peter Levene, who started off talking about the dangers of government over-regulation. After a few rounds of critique he was left all but admitting it was a straw man … ending instead by saying it was imperative that we leave alone compensation.

Tthe point I tried to hammer home? More than anything else, the world economic forum has been the world’s preeminent pro-globalization shop for the past forty years. The global economy has flourished during this period. Without a doubt, there have also been clear winners and losers. This year, I think we’re seeing a tipping point — both structurally (in terms of the rise of the state) and politically (in terms of rising protectionism). Thirty-seven percent of the audience bought the notion that rising protectionism is the biggest risk out there. Some 50 percent said a sovereign debt crisis. We still need some time to play this out, apparently…

Ian Bremmer will be blogging from Davos this week sending reports and commentary from inside the World Economic Forum.