The Truth About Trump in Davos: Follow the Money

DAVOS, Switzerland — One could get the feeling that President Donald Trump might not be set for a rousing welcome when he arrives in this Swiss Alps resort this week to address the annual gathering of the World Economic Forum.

The forum, a pilgrimage for the wealthy and powerful, is an unabashed champion of globalization. It advocates ceaselessly for the notion that every problem — from climate change to joblessness to terrorism to cybersecurity — requires international cooperation and multilateral solutions.

Trump’s derisive rejection of such ideas as the woolly-headed notions of the global elite is central to his identity. He used his inaugural address a year ago to declare the dawning of a new “America First” era. He has since pulled the United States out of a sprawling Pacific trade deal, while renouncing American participation in the Paris climate accord. His has spurned the modern sensitivities to race and gender.

While many here are poised to recoil at Trump’s arrival — diplomats, heads of state and members of human rights organizations — much of the moneyed elite who pay the bills for many Davos festivities are willing to overlook what they portray as the U.S. president’s rhetorical foibles in favor of focusing on the additional wealth he has delivered to their coffers.

Among banking chiefs, hedge fund managers, private equity overseers and others who make their living managing vast piles of money, Trump represents a rare politician who has made good on his words, having slashed corporate taxes and ditched regulations they view as anti-business. However they publicly greet Trump, they are happy with key ways in which he has wielded his power.

“If you take away Trump’s Twitter ridiculousness, it’s actually been a pretty good year for the business community,” said Raymond Nolte, a managing partner at SkyBridge Capital, a New York-based hedge fund that manages more than $10.7 billion in assets. “He’s basically accomplished major reform.”

Though many economists assert that the U.S. economic expansion, now into its ninth year, owes much to federal spending unleashed by the Obama administration, the story within the finance community is that Trump’s deregulatory proclivities combined with his $1.5 trillion tax cuts will greatly juice growth.

The business elite are not crazy about Trump’s exchange of nuclear threats with the North Korean dictator Kim Jong Un. They are worried about the U.S. president’s threats to blow up the North American Free Trade Agreement while undermining support for the World Trade Organization, the linchpin of the global, rules-based mode of international commerce.

But they like what Trump has meant for the raging U.S. stock market and, more broadly, enhanced forecasts of global economic growth.

“A lot of it is perception,” said Nolte. “It’s had psychological impact with the business community, persuading companies to invest and hire.”

Far from an exclusively American view, business leaders from around the world appear to bring this sort of thinking to bear as they prepare for Trump’s appearance in Davos, where he is expected to speak on Friday.

“His visit will get a lukewarm reception because of his America First policies,” said Ralph Hamers, chief executive officer of ING Group, the Netherlands-based global bank, “But for a lot of companies, his policies have been very supportive. That’s why you see the markets doing well.”

The official agenda of Davos is full of earnest discussions of inequality, human rights, gender equality and the rise of automation as a threat to jobs. In these sorts of venues, Trump is a man whose words and deeds evoke great consternation.

But the ballroom of every surrounding hotel is full of parties paid for by investment houses and global consulting companies. Aged Bordeaux and single malt whiskey flow freely while clients are entertained. In these quarters, Trump is a subject discussed with care, yet with palpable appreciation.

Many business leaders decline to discuss Trump on the record, cognizant that his very name is deeply intertwined with debates over acceptable public behavior. None of these are subjects that companies are eager to link to their brands.

“You’re going to see very bifurcated points of view,” said Jeff Schumacher, founder and chief executive officer of BCG Digital Ventures, a venture capital investment arm of Boston Consulting Group, the global consulting company. “Business leaders are excited about some of the things that have been pro-business, but on climate change and geopolitical things, they are not so happy.”

Schumacher prefers to accentuate the positive.

“The tax law will be very advantageous to us, and I think you’ll see it spawn a lot of growth,” he said “For us, it’s playing right into the strength of what we do.”

One can find business people in Davos who are openly aghast at Trump’s participation, especially those from Africa — a continent the U.S. president appeared to write off with a vulgar slur as he reportedly urged that Americans tilt their immigration policy toward welcoming more Norwegians.

“As global leader, the United States has lost a lot of recognition, purely because of the current leadership,” said Joel Motsweng Baepi, director of governance, regulatory and corporate affairs in the South African office of Old Mutual, the global insurance company. “His is just dumb bigotry. Unfortunately, it’s dumb bigotry you cannot ignore because it comes from the White House.” Mark Malloch-Brown, a former U.N. official who now chairs the Business and Sustainable Development Commission in Britain, suggested that the reaction to Trump in Davos would be both muted and concerned.

“The delegates themselves are likely to be polite to a fault and enthusiastic about the U.S. stock market performance, but will have difficulty concealing their anxiety about an erratic protection of American power in the world and his own psychological stability,” Malloch-Brown said.

But people who measure value with money have different views.

As president of BusinessEurope, a leading European industrial organization, Emma Marcegaglia, fears Trump’s threats to tear up major trade agreements. As co-chief executive officer of Marcegaglia, a major global steel processor, she frets that Trump has outlined plans to cite national security concerns as a reason to protect U.S. steel-makers with tariffs on imports.

But ask her about markets and investment, and Marcegaglia has kind words for Trump. “A lot businessmen think his tax reform is fine — the idea that through lowering the tax rate you can attract investment is something that makes sense,” she said. Longtime attendees of the World Economic Forum are prone to discuss — and sometimes lampoon — the values of so-called Davos Man (and Woman), the quintessential attendee who is at once deeply disturbed by the plight of Syrian refugees, at pains to address climate change, and perpetually able to extract new fortune from every situation.

For that crowd, Trump effectively forces a choice. In action and words, he is anathema to the foundational ideals of the forum. He is also making rich people richer, and many of them are here.

“They are now licking their lips,” said Joseph Stiglitz, the Nobel laureate economist. “Davos Man has been able to overlook Trump’s ‘America First’ rhetoric, his anti-climate change action, his protectionism, nativism, racism, bigotry, narcissism, misogyny, for the lucre that seems to be the true motivating force behind Davos Man.”