BEVERLY HILLS, CALIFORNIA – The Milken Global Conference, put on by the institute of convicted junk bond salesman and great manager of his own reputation Michael Milken, is basically Davos for people who don’t like snow. It’s a place where everyone’s lanyard has the name of a bank, hedge fund, or private equity firm on it. It’s a place where a panel on “Kitchen Table Economics” features remarks from the president of the U.S. Chamber of Commerce. I remember the first time I went, when I saw former Sen. Evan Bayh (D-IN) lament that “elites in our country tend to be in an echo chamber.” Honey, it’s Palmolive, and you’re soaking in it.
I tend to go to this conference as a cultural anthropologist, watching how people interact and what they say. But this year, the common spaces were smaller and the velvet ropes more prevalent. Most attendees were spending their time talking on their phones or gathered in huddled conversations at the Starbucks across the street from the Beverly Hilton, striking a pose of not caring a lot about the conference they’re at. I sat in on a panel with Tim Scott, a sitting U.S. senator and chair of the Senate Banking Committee, that had maybe 30 people in attendance.
When the Milken leading lights do emerge, they want you to know that they’re excited: about the future of AI and technology, and about the prospect of getting your money to pay for the build-out. Larry Fink, CEO of top asset manager BlackRock, was positively giddy about acquiring more and more retirement assets to invest in the AI revolution, boasting about a recent move for workers in Saudi Arabia to a defined contribution, 401(k)-style plan. “These are going to be our investors in the future,” he sighed. “Having your money in a bank account is one of the worst financial decisions of a lifetime.”
Fink and his fellow panelist, Brookfield CEO Bruce Flatt, were more concerned with selling ordinary savers on the benefits of handing over their money than what AI might actually do for human beings. Milken himself, who was moderating, stepped up to tout with thin evidence that AI had four times the accuracy on medical diagnoses as human doctors. (Just today, the state of Pennsylvania sued Character.AI for practicing medicine on state residents without a license.)
Reality repeatedly failed to intrude on the situation, as it has in equity markets. Despite two months of war and the blockage of one of the world’s most important waterways for global shipping, the Strait of Hormuz, the Dow Jones Industrial Average has gone up. Nobody wants to worry their beautiful minds about the significant potential damage to the global economy from a bumbling war of choice. Their spirits are too bright with thoughts of bubbles.
On a panel about mergers and acquisitions, a managing director at the investment bank Jefferies wearily insisted that she didn’t want to talk about AI, and proceeded to do so for 15 minutes. “Most people who pitch me on it don’t know what they’re talking about,” she said. “I believe it will do incredible things for business. But if you wanted me to make a bet on them now, I don’t know if I could do that.” Sounds like a ringing endorsement!
The rest of the panel similarly thrilled to the concept of AI while admitting that most of the companies would sink, and it’s probably better to just invest in sure things anyway. To some that meant Google, to others the basics. “Construction companies, energy, metals,” said Alan Tannenbaum, CEO of BMO Capital Markets. “Picking winners and losers in AI is difficult. Who’s going to build a data center? That’s not that hard.”
Except if the energy needed to power the data center is stuck in the Strait of Hormuz, and the helium and other components needed to produce the semiconductors that fill the data center are stuck as well. There’s just this magical thinking from the very type of people assembled at Milken that everything will work out fine.
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Finally, someone was confronted with the facts of a war that was barely talked about elsewhere: Ken Griffin, CEO of hedge fund Citadel. CNBC anchor Sara Eisen asked him why the market was so optimistic amid its spread. Griffin, a major GOP donor, said that the U.S. was “shielded” from the price of energy spiking, and that we should thank God for the person who invented fracking that made the country energy-independent, though “the name eludes me at this moment.”
There was an amazing caveat to Griffin’s happy talk about U.S. independence: The country is shielded, but consumers are not. Pressed again, Griffin finally gave the game away. “We can withstand the energy shock. Many other developing nations cannot. That risks materially reducing global GDP and will have knock-on effects if the stalemate persists.” Even then, he tried to look on the bright side, asking Eisen what she paid for eggs in New York. “They’ve come down a bit. Do you buy your own eggs?” she asked Griffin. The pause was priceless. “In a typical week, no, but I have been spotted at Target shopping for groceries.”
Most of the rest of Griffin’s remarks were reserved for whining about Zohran Mamdani staging a video in front of his soon-to-be-taxed $238 million Manhattan pied-à-terre, and that he’ll “double down” on Miami as a result. He seriously compared having a video shot outside a home he wasn’t in to various Trump assassination attempts. But the real talk on Iran—that it’s likely to trigger a global recession—was the news for an elite set that didn’t want to hear it. They wanted to imagine great productivity gains (and job losses) from AI. They wanted to propound on teachers unions being the problem with education, equipped with one talking point about Mississippi reintroducing phonics into their elementary school curriculum and having good results. They wanted to “Lead in a New Era,” as the theme of the conference went.
Glenn Youngkin, the private equity manager and former governor of Virginia, bristled at an extended talk about the war on a panel with guy-who-thinks-he’s-running-for-president Rahm Emanuel. “We have talked about this issue for 23 minutes,” he said, “but the biggest issue for people are whether they can pay their bills.” That he didn’t see these two things as one and the same is an example of the self-delusion at work here.
Emanuel summed up the event, and the awareness people participating in it have that such a gathering is perceived as universally odious, when he was asked by The Wall Street Journal’s Gerard Baker if he would be a 2028 candidate. “If I’m going to announce,” Emanuel said, “it won’t be at the Milken Conference.” Everyone laughed, because nobody would be stupid enough to think catering to the rich at an investor conference would make any political sense, said the guy on the panel entitled “The Future of US Politics.”
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