with Paulina Firozi
“I like a lot more stuff than I don’t like,” Goldman Sachs CEO Lloyd Blankfein said Wednesday in a CNBC interview at the World Economic Forum. “I’ve really liked what he’s done for the economy, and I think he’s gone out of his way to be very, very supportive of the system. And I don’t want to be antagonistic to them. And frankly, I want to honor that.”
Indeed, industry-leading financiers mostly held their tongues in the wake of Trump’s comments, first reported two weeks ago by The Washington Post, smearing immigrants from “shithole” countries such as Haiti and those in Africa. Blankfein kept his criticism oblique, in a tweet:
It was a different story a year ago, when the president issued a travel ban aimed at seven Muslim-majority countries just after taking office. Then, Wall Street chiefs made their objections explicit. “For us to be successful, our men and women must reflect the diversity of the communities and cultures in which we operate,” Blankfein said in a voice mail sent to employees at the time. “We must attract, retain and motivate people from many backgrounds and perspectives.”
And JPMorgan Chase CEO Jamie Dimon told employees in a memo that the company’s leaders “understand that our country, economy and well-being are strengthened by the rich diversity of the world around us, where we are dedicated to serving customers and communities in more than 100 countries every day.”
Dimon has steered clear of the firestorm over Trump’s recent remarks. And in Davos on Wednesday, he joined the parade of bank executives predicting boom times thanks to Trump-led moves out of Washington. “I think it's possible you're going to hit 4 percent sometime this year,” he told CNBC. “I promise you, we are going to be sitting here in a year and you all will be worrying about inflation and wages going up too high.”
In fairness, the travel ban demanded a response because it presented an imminent threat to the status of employees from the targeted countries. But big-bank CEOs and corporate chiefs across a range of sectors also took the opportunity to speak up against a set of values they believed to be under assault.
In that, multinational business leaders stood arm-in-arm with heads of state who spent last year’s Davos gathering worrying about what Trump’s rise to power would mean for the international order. The moves he has made since to goose corporate profits have laid bare where the interests of captains of industry diverge from those of some world leaders.
Blankfein and Dimon aren't the only ones. From my colleague Heather Long: “As Bank of America chief executive Brian Moynihan travels the world in 2018, he says he keeps hearing the same thing over and over: Foreign businesses want to pump money into the United States again after [Trump’s] tax cuts. Like the White House, he thinks the positive bounce from the tax bill could be far bigger than most experts predict. There's growing cohesion among executives — cutting across industry and even geography — that Trump's tax plan is going to deliver massive new investment in the United States, which should, in turn, boost growth and employment …
'I think we’re going to find a very big positive surprise,' said [Blackstone chief executive Steve Schwarzman], who chaired Trump’s advisory council, the Strategy and Policy Forum, before it disbanded in August after the president's comments about the white supremacist rally in Charlottesville. ‘There are companies all around the world who are looking at the U.S. now and saying, ‘This is the place to be in the developed world.' "
Trump signaled he's ready for some love when he arrives here with a tweet Wednesday night:
Will soon be heading to Davos, Switzerland, to tell the world how great America is and is doing. Our economy is now booming and with all I am doing, will only get better...Our country is finally WINNING again!— Donald J. Trump (@realDonaldTrump) January 25, 2018
Compare that sunniness to the Trump-themed blues that European leaders, among others, are singing here:
- French president Emmanuel Macron says globalization is in crisis. FT's Katie Martin: “Macron launched a spirited, if lengthy defence of the liberal world order on Wednesday ... Mr. Macron called on fellow world leaders, businesses and individuals to protect the environment, work for gender equality and fend off nationalism and populism — a thinly veiled rebuke to the protectionist rhetoric of the U.S. administration. ’In terms of trade, we are moving back again towards greater protectionism, greater fragmentation and we are undoing what globalisation has been able to achieve. In terms of climate change, we are losing the battle,’ he said. ‘How are we going to explain to people that they are going to be more vulnerable?’”
- And Macron took a climate-related jab at Trump. “When you look outside, especially arriving in this building, I mean it could be hard to believe in global warming . . . Obviously and fortunately you didn’t invite anybody skeptical with global warming this year,” Macron said, to laughs and applause. (There's a LOT of snow here.)
- German Chancellor Angela Merkel warned against isolation. Reuters: “’We are seeing nationalism, populism and in a lot of countries a polarized atmosphere,’ Merkel told a packed auditorium . . . ‘We believe that isolation won’t help us. We believe we need to cooperate, that protectionism is not the answer,’ she said, asking: ‘Have we really learned from history, or haven’t we?’ ”
- Italian Prime Minister Paolo Gentiloni called for respecting international accords. Reuters: ‘Italian Prime Minister Paolo Gentiloni sent a message to [Trump] on Wednesday that leaders can defend their countries’ interests but must respect existing international agreements. ‘It is totally legitimate, understandable, the desire for political leaders to defend their own citizens, their own companies, their own economy . . . I respect that, but obviously there is a limit … You can defend and protect your citizens, your workers, your companies, but we live in a framework given by trade agreements, free trade, trade rules, multilateral decisions, and we have to keep this system functioning.’”
And although business leaders have their own concerns about Trump trade hawks spoiling the party by tipping the country into a trade war or two, here and for the moment, they are leading with the good news.
That has been the shock of the conference so far. And it clears a path for the Trump to take a victory lap when the president lands here on Thursday and delivers a speech to his erstwhile enemies on Friday.
PROGRAMMING NOTE: I'm in Davos to cover all the action this week, so The Finance 202 will be hitting your inboxes at 6 a.m. Swiss time (12 a.m EST) today through Thursday, and Friday morning after Trump's speech. If you're attending, tell me what you're seeing and hearing — and pass on any questions, concerns and complaints (and of course noteworthy sightings). Please email me at firstname.lastname@example.org. And if you're not signed up for my newsletter, please do so here.
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— Trump ready to say “I told you so.” The Washington Post's Anne Gearan, who will be traveling here with the president: “Trump is attending the global economic conclave in Davos ... not because he has come around to the views broadly shared by the sort of international financial elite, government figures and academics who gather annually in a Swiss ski town. He is going because he wants to say, 'I told you so.'
After a year in office, 'America First,' the nativist cry that helped propel Trump to the presidency, is the backbone of a Trump economic and foreign policy Trump is expected to argue has benefited the United States exactly the way he said it would. As he does at home, Trump will crow about a soaring stock market, low unemployment, the return of some jobs from overseas and the passage of his tax cut package.”
— Dining with the enemy: “Trump is hosting a dinner at Davos on Thursday for the heads of several European companies to encourage investment and expansion in the United States. He is also being feted at a reception with other world leaders attending the four-day session. Trump’s speech scheduled for Friday afternoon is the capstone of the event. If his presence has a skunk-at-the-party quality, some economists suggested, it also makes sense at this point in Trump’s tenure.”
TEAM TRUMP HAS LANDED
— Treasury Secretary Steven Mnuchin not worried about weaker dollar. From The Post's Heather Long: “One of the favorite things Treasury secretaries get asked to comment on are the dollar. My view is, again, the dollar is one of the most liquid markets. Where it is in the short term is not a concern of ours at all. Obviously, a weaker dollar is good for us as it relates to trade and opportunities. Again, I think longer term the strength of dollar is a reflection of the U.S. economy and the fact it is and will continue to be the primary currency in terms of the reserve currency.”
— Commerce Secretary Wilbur Ross tried to play down his Cabinet colleague's comments. Bloomberg News's Randy Woods: “Ross indicated that investors are overreacting to the Treasury Secretary’s comments on the greenback, saying his fellow Cabinet member in no way advocated for a shift in America’s long-standing strong-dollar policy ....'He wasn’t advocating anything. He was simply saying, it’s not the world’s biggest concern to us right now,” Ross said on CNBC, noting that he was with Mnuchin when he spoke. 'What he exactly said was the dollar, just like the Treasury bond market, is a huge market, a very liquid market, it’s not something we worry a lot about day by day.' "
More from Ross, who did show after being absent for a panel on Tuesday. Bloomberg’s Enda Curran and Jan Dahinten: “Ross, speaking alongside Mnuchin, says more measures at defending U.S. commerce are in the offing. ‘Trade wars are fought every single day,’ he said. ‘So a trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the rampart.’ It’s a message Trump is likely to send in person on Friday.”
— “America first is not America alone.” Heather again: “‘This is about an America first agenda, but America first does mean working with the rest of the world,’ Mnuchin said in a news conference Wednesday morning …The Trump team has come to Davos to take a victory lap after passage of a major reduction in U.S. taxes and a rollback in regulations. They see this as a prime opportunity for Trump to be a great salesman of how well the country is doing economically and how foreign businesses should invest more in the United States.
" ‘We are committed to economic growth of 3 percent or higher GDP. Economic growth in the U.S. is obviously good for the rest of the world,’ Mnuchin said. ‘There’s no question ... the vote from the market is very positive.’ "
— Energy Secretary Rick Perry is also on the snowy scene: “Here’s what I try to share with all of our allies and the audience here at Davos. The United States is not just exporting energy, we’re exporting freedom. We’re exporting to our allies in Europe to truly have a choice of where you buy your energy from. That’s freedom, and that kind of freedom is priceless,” Perry told Fox News Business on Wednesday.
— “The Mooch,” who has also been sighted in this Swiss town, teases Trump’s speech. Bloomberg: “Trump’s speech this week will likely underscore the ‘duality’ of the U.S. president’s personality, former White House aide Anthony Scaramucci tells Bloomberg Television. Trump wants the U.S. to be part of the global system, ‘but he doesn’t see that as going against being an ‘America First’ leader.’ ”
He was active on Twitter, as you might expect (courtesy of a Swiss TV reporter):
— Corker tells Davos: Trump's “unpredictability” works. "[Senate Foreign Affairs Committee Chairman Bob Corker], who once dubbed the White House an adult day-care center,” offered a mostly complimentary assessment Wednesday of the president's performance in a panel discussion hosted by Washington Post Executive Editor Martin Baron . . . The president and I haven’t always seen eye to eye. On the other hand, I’ve seen where that unpredictability has been helpful in negotiations,' Corker said. 'He has done an incredible job of rallying the animal spirits in our country, there’s no question.'”
Corker also hinted that “Rexit” may take awhile — the term batted around Washington for the imminent departure from Foggy Bottom of Secretary of State Rex Tillerson, who has not exactly gotten along swimmingly with Trump during the first year, according to news reports. Corker said Tillerson has found something of a “reprieve” after a rocky first year. “I think he feels more secure in his job today and there’s been more of a sync-up.”
— Another climate jab at Trump, this one from California Gov. Jerry Brown (D) and former New York City mayor Michael Bloomberg. America's Pledge, the climate group founded by Brown and Bloomberg, launched on Wednesday a digital ad running on social media and digital sites in Davos ahead of the president's visit.
“South Korea and North Korea don’t agree on much. Neither do Iran and Israel. And India and Pakistan rarely see eye to eye. But they all agree on one thing: The Paris agreement on climate,” the spot begins.
See it for yourself below:
— The #MeToo moment continues. The Post’s Danielle Paquette: “After stories about sexual harassment flooded the news and social media last year, the annual meeting at Davos, known for drawing some of the world's most powerful people to discuss society's most pressing issues, is addressing this form of workplace misconduct in a major way for the first time. [Microsoft’s Peggy Johnson] spoke on the week's first public panel about sexual harassment, the obvious and the subtle, the roots and possible solutions. Another discussion is slated for Thursday (‘How do we stop sexual harassment?’). Shops in Davos are peddling T-shirts that say ‘Feminist’ for 30 Swiss francs. ‘Me too’ is tossed around like ‘GDP.’ Company heads are trading diplomacy for bluntness.”
— Outsourcing giant prepares local workers for nationalistic era. From Danielle: “Infosys, a technology powerhouse that employs about 200,000 people worldwide, has faced political pressure from the Trump administration, which has threatened to take action against companies that hire foreign workers over homegrown ones. The firm announced earlier this year it intends to hire 10,000 workers in the United States by 2020.
On Wednesday, Ravi Kumar S., a president and deputy chief operating officer, told The Washington Post that Infosys was focusing on training American workers and shrinking its dependence on bringing in high-skilled foreign workers on H-1B visas. 'Nations across the world are going to become very nationalistic,' he said at his snow-dusted office in Davos. 'It’s kind of a counternarrative to globalization: the talent pools will have to be very localized.' "
Overheard at Davos...
OH in Davos (I swear to you):— Danielle Paquette (@DPAQreport) January 24, 2018
"Gentlemen, gentlemen, gentlemen, GENTLEMEN. All I care about is money."
From Quartz's Heather Timmons:
Here are some of the highlights from Davos of events you might want to attend (all times local):
- British Prime Minister Theresa May is scheduled to speak on Thursday.
- Argentinian president Maricio Macri is scheduled to speak on Thursday.
- President Trump is scheduled to speak on Friday.
- An interactive panel on the intelligence market will begin at 9 a.m. in Congress Centre, xChange.
- A televised session on the remaking of global finance will begin at 11 a.m. in Congress Centre, Sanada.
- A televised session on new avenues for global trade will begin at 1 p.m. in Congress Centre, Aspen 2.
- A session on the big picture on trade will begin at 2:45 p.m. in Congress Centre, Global Situation Space.
- A dinner session on “The State of the World with Nobel Laureates in Economics” will begin in Central Sporthotel at 8 p.m.
- An interactive panel on famine and food security will begin at 9 a.m. in Congress Centre, Situation Room on Friday.
- A televised session on the future of Asian economics will begin at 9:15 a.m. in Congress Centre, Aspen 2 on Friday.
- An interactive panel on the state of startups will begin at 9:15 a.m. in Congress Centre, Aspen 1 on Friday.
- A session on the rise of women entrepreneurs will begin in Congress Centre, xChange at 10:45 a.m. on Friday.
- A lunch session on the business of Brexit will start at 12:30 p.m. in Morosani Posthotel, Davoserstube on Friday.
- An interactive panel on the global economic outlook will begin at 1 p.m. in Congress Centre, Congress Hall on Friday.
- The closing concert in Congress Centre, Congress Hall will begin at 5:30 p.m on Friday.
Watch the full Davos panel on the global impact of "America First:"
Angela Merkel says isolation isn't the answer:
What is the Precariat?