The Davos plutocrats warm up to Trump

Andrew Ross Sorkin, The New York Times

Posted at Jan 21 2020 08:53 AM

A sign is pictured at the Congress Center ahead of the World Economic Forum (WEF) annual meeting in Davos, Switzerland Jan. 20, 2020. Denis Balibouse, Reuters

DAVOS, Switzerland -- The last time President Donald Trump arrived at the World Economic Forum’s annual meeting, his trip was treated with deep skepticism, if not disdain, by the business and political leaders who gather once a year in this ski town in the Swiss Alps. It was 2018 and even with his newly enacted tax cuts, his populist, anti-globalist rhetoric and Twitter outbursts were more than enough to make the event’s collection of plutocrats uneasy.

This time is likely to be different.

With the stock market at record highs, two trade deals announced and the possibility that Trump may be in office for another four years, there is an increasing sense that he will be accepted, if not embraced (although some attendees may roll their eyes behind his back) when he arrives Tuesday, even as he faces an impeachment trial.

As anathema as it may be to some participants, Trump may be the new Davos Man.

The Davos forum, marking its 50th year, has always sought to foster a sense of multilateral unity. But Trump, along with his counterpart in Britain, Prime Minister Boris Johnson, is seemingly moving the world into a tariff based, decoupled universe, based on bilateral negotiations and diplomacy by tweet.

To the surprise of many Davos regulars, the economic results have yet to prove as disastrous as they expected — and, at least in the short term, have seemingly proven to be quite positive. (The long-term effects, of course, are still unknown.)

Even Trump’s most ardent detractors acknowledge that an acceptance of the president is settling in among the Davos crowd.

“We are all adjusting to his abnormal behavior,” said the investor Anthony Scaramucci, Trump’s onetime spokesman turned enemy who has been a Davos regular for over a decade and hosts a wine tasting party that has become a hot ticket for the boldfaced names. “The economic strength helps their cognitive dissonance,” he said.

Just last week, a lineup of some executives who will attend the Davos forum were in the audience at the White House when Trump signed the initial China trade deal. They more than politely applauded.

“Will you say, ‘Thank you, Mr. President’ at least? Huh?” Trump asked Mary Erdoes, the chief executive of JPMorgan’s asset and wealth management division and a Davos regular, along with Jamie Dimon, the bank’s CEO. “They just announced earnings, and they were incredible,” Trump said about JPMorgan. “They were very substantial. I made a lot of bankers look very good. But you’re doing a great job. Say hello to Jamie.”

Stephen Schwarzman, the co-founder of Blackstone, who often gets calls from global CEOs seeking advice on how to manage relations with Trump because of his close relationship with him, said there has been a shift among the C-suite crowd.

“The attitude of the business community toward the Trump Administration appears quite positive,” said Schwarzman, who runs one of the world’s biggest investment funds. Among the reasons for the warm feelings, he said, are the strength of the economy, trade deals with China, Mexico and Canada, the tax bill and the elimination of regulations.

Still, if there is one topic expected to dominate the week here besides Trump himself, it will be an issue that he and the Davos community vehemently disagree about: climate change

Just last week, Satya Nadella, the chief executive of Microsoft — and a Davos participant — announced the company would be carbon negative by 2030, and by 2050 it would seek to remove all of the carbon it has ever emitted since its founding in 1975. The World Economic Forum itself announced the meeting would be carbon neutral after it bought carbon credits to offset carbon emission from the event.

Of course, Trump doesn’t believe in climate change and pulled out of the Paris Climate Agreement to the horror of most of the executives and attendees of Davos.

He is likely to hear criticism from activists like Greta Thunberg, the teenage phenom who has become a global icon for the climate. And he may get some nudging from CEOs, but, unlike the activists, they will be unlikely to confront him publicly out of fear that he might turn on them or their companies.

“The Davos crowd are well respected followers of fashion and love whomever is in power,” said Jeffrey Sonnenfeld, the senior associate dean at the Yale School of Management and an expert on corporate leadership. “They celebrate when the people are rich and powerful.”

Sonnenfeld pointed out that, despite the stock market runup, only “12 percent anticipate economic conditions will improve over the next 6 months, up from just 4 percent in the third quarter,” according to The Conference Board’s most recent survey of chief executives.

While the business community has come to accept Trump — one executive described the view by saying “life is relative” — Sonnenfeld noted that a poll he conducted three weeks ago found that 56 percent of CEOs favored the president’s impeachment and removal from office.

Trump may find himself flattered by the Davos audience. Whether it is genuine flattery or something else remains an open question. Whatever the answer, Scaramucci is convinced it is all self-interested: “The unspeakable truth is that CEOs and their staff are horrified.”


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