Getting so much stronger all the time

As one observes the international activities of President Trump, one must admire his tenacity, focus, and, let it be said, his successes. Far from isolating himself from the world, as many media reports had suggested, President Trump is becoming increasingly well entrenched in his world leadership role. Far from other leaders running away from him, they increasingly can to rub against his cloth in order to achieve at least symbolic proximity.

I will demonstrate this with two examples taken from his activities in the last five days, taken from the international business field  alone –  alone – so no need to worry about another discussion of the Deputy FBI director’s resignation.: One was the Trump visit to Davos, Switzerland, where business leaders, policy makers and think tank figures met to exchange ideas and plans , combining mostly in the  fields of business, investment, trade, and the macro policies which are promoted to address problems perhaps too large for any country alone. Media sages predicted an outcast Trump with no audience, no interest and no influence.

Well, the contrary occurred. One President Trump had announced his attendance, the list of attendees from other nations was upgraded by title and influence – Trumps presence led to a strengthening of Davos. Those that had referred to the Trump experience of a cold shoulder must have been very chagrined by the discussion between Trump and Klaus Schwab – the founder and head of the World Economic Forum. Schwab showered considerable praise on Trump and his first year achievements, a claim that was widely repeated to high ranking members of business and policy.

In an elegant turnaround, chroniclers of Davos  found one new thought and explanation. Trump is wealthy and in business, so no wonder the other attendees liked him, they are birds of the same feather. No matter that many business people, a year ago, were concerned about what the novice politician would do. Turns out, Trump was not blessed with predicted naiveté, but rather had some meaningful plans, many of which he shepherded forward. Far from being a disaster, Davos was a Trump triumph.

The second example comes from the State of the Union address. Again, many predictions were negative, ranging from limited content to rising attendance boycotts. Well, again something must have been wrong with the crystal ball. The speech was elegant, strong and inspiring. Trump used his great talent as a story teller to introduce modern day heroes to Congress, America and the world, and was able to communicate a feeling of pride, comfort, and leadership. How could anyone avoid applauding – and as we know, when the applause comes you’ve done at least some winning over.

But the strongest part of the President’s speech consisted of what he didn’t say. Let me first tell a story myself. In London, on Jermyn Street I went into a haberdashery to buy a cotton shirt. They were very expensive and I asked the salesman to prove that they were worth the money. He explained that all luxury shirts have some extra buttons sewn in, so that in case of loss, there would be a replacement available. Now come the evidence: His shirts did not have any spare buttons, because theirs did not fall off. The absence of even good things can be of substantial proof.

The speech, about 80 minutes long, had only two minutes worth of comments on trade and globalization. We know how important jobs, international competition and competitiveness are to the President. The lack of mention shows that he is convinced that res ipsa loquitur – things speak for themselves. The economy is not limping along but on a definite fast track. Production sites are re-located back to the United States. Innovation, concentration and investments give our companies and their employees new wings.

So at the end of his first year in office, Trump has reason to be proud and we can accept his moments of exuberance – unusual perhaps but deservedly present.  Let me reiterate what I consider the strongest line in the speech: Americans are dreamers too. Let’s keep it that way!

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

Thoughts on the 2015 World Economic Forum

By Michael R. Czinkota

The World Economic Forum (WEF) convened in Davos, Switzerland for a four-day conference with more than 2,500 attendees, including government officials, politicians, and even some celebrities. With big names such as Angela Merkel, David Cameron, Jack Ma, and Bill Gates presenting their thoughts, the meeting is significant.

The WEF serves to expose new ideas and innovations and show “this is who we are, and that is what we need.” It highlights current and future issues and puts momentum behind sensitive international negotiations such the TTIP (Transatlantic Trade and Investment Partnership) and the TPP (Trans-Pacific Partnership).

This year, the theme of the “new global context” focused on the conflicts instability, in addition to political, economic, and technological changes that make the world a fragmented place. The conference lived up to its reputation for insights and surprises such as:

  •        The announcement that European Central Bank would purchase €60 billion a month to ward off deflation, encourage inflation and jumpstart growth across the 19 nations that are based off the Euro. Though many had expected smaller quantitative easing efforts, the annualized 720 Billion Euro was a reasonable comparison to the U.S. pumping in dollars in 2008 and 2009.
  •        After years of tying the Swiss Franc to the Euro, the currency appreciated rapidly to its highest valuation in 30 years following the Swiss National Bank decision to allow an unrestricted rally of its currency.
  • A study released by international group Oxfam projects that the world’s richest 1%, mostly from the U.S. and Europe, will soon own more than the rest of the world’s population put together. Li Keqiang Premier of the People’s Republic of China stated “we need to ensure a relatively high employment rate, especially sufficient employment for young people. And we need to optimize income distribution and raise people’s welfare.”
  • Terrorism and its effect on the global economy was brought up by French president Francois Hollande. He mentioned, “there cannot be prosperity without security.” Others called on the private sector to play a greater role in developing a global international response and addressing the root causes of terrorism.

Personally, these three items surprised me:

  • The lack of prepared plans and budgets for zero cost money. Having free money not only expands the tools but also changes the toolbox. This began in an era of mega trans-border problems, such as Ebola and climate issues, untold opportunities in space, and burdensome infrastructure reforms. All of these problems persist while the guests arrived in 1,700 private jets.
  • Former Mexican President Calderon’s claims that Mexicans in the US do not want a new country, just more money. What an opening for public discourse and dissent!
  • A lack of public pronouncements on the changing relationship with Cuba and its effect on all Caribbean competitors and their service industries. Just like Sherlock Holmes’ non-barking dog, the attention given to the problems in Nigeria was insufficient.

As the meeting drew to a close, some big questions remain:

  • With global problems in finance, growth and health – who will run the show and who will give up sovereignty?
  • What are the key trade-offs, and who will supply the money?
  • Are the key choices only between ‘feed, fund or fight’? Is there a new role for humility and humanity?
  • To what length should the daily ‘long term’ planning horizon of firms and government be re-calibrated?
  • Since trust is crucial, how can we encourage its growth and intensity, and which fields and endeavors should prioritize trust?
  • Are there really long term links between business and freedom?
  • Is it time to slow down systematically, perhaps starting with ‘slow food’?