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Fallout: The Financial Crisis

Leaders in Davos discuss politics, trust

Marketplace Staff Jan 30, 2009
Fallout: The Financial Crisis

Leaders in Davos discuss politics, trust

Marketplace Staff Jan 30, 2009


Kai Ryssdal: British Prime Minister Gordon Brown made a gaffe at the World Economic Forum in Davos, Switzerland today. Let this be a lesson to you if you’re ever giving a press conference at a major global media event.

Gordon Brown: But our third priority, and this is essential for the maintenance of jobs [cell phone begins ringing] and for the recovery of businesses is yet to be put in place in all countries and this is the resumption of lending to the real . . . I’m afraid that’s my phone.

So, we’ve reached Bloomberg’s Tom Keene in Davos to talk about what’s been going on at the forum this week. Tom, good to have you with us.

Tom Keene: Great to be with you, Kai.

Ryssdal: You’ve been in Davos what, three, four days now?

Keene: Three of four days. I’ve been here a number of years. But you come up the valley from Zurich, you take the long, oh, hour train ride or so and you come into a wonderland. This year it’s a little bit different, but it’s been an interesting three, four days.

Ryssdal: Well explore that for a minute. How is it different than last year, say?

Keene: I don’t want to overplay the gloom. The media headlines are “The gloom of Davos” and “The collapse of the system.” There’s still an academic and intellectual excitement here. But that fervor of investment banking and finance is decidedly missing this year.

Ryssdal: What does it say then that a lot of the people at the center of this crisis, whether it’s investment bankers or members of the new administration — Larry Summers and the Secretary of the Treasury, Tim Geithner — what does it say that they’re not there to try to help figure this thing out?

Keene: Well, I think it’s less about Davos and more the challenges that each of these parties has back at home, whether it’s in Europe or Asia or in the United States. They could have come here, they would have learned a lot. And again, a number of government officials did come from other nations. It was maybe less about Davos and more really pressing issues for the Obama administration, and it really forced them to stay in Washington.

Ryssdal: Do you think there will be a time when we look back at this years’ Davos and say, “Hey, that’s where they figured out the global economy and that’s why things turned around?”

Keene: It’s a great question, but no. It . . . there’s this idea that there’s a big crystal ball up here. There isn’t. I really don’t think we’re going to say this is a pivot point. In fact, there’s a standard joke among those that come here, that whatever the theme is for a given year, they always get it wrong. And in fact, it could be the polar opposite. You don’t come out of Davos with a plan. What you come out of it with is a lot of discussion, including heated political discussion, which has been the theme this year with the speech by Putin. And also the slam-down we had with the prime minister of Turkey and the president of Israel that occurred yesterday. That has been the real surprise here — the political debate, Kai, has really been front and center.

Ryssdal: Help me out though, Tom. I thought it was supposed to be a world economic forum.

Keene: Good point. It’s a political economic forum. I’ve always said that. Yes, it’s talk of stimulus. Yes, it’s talk about jobs, or course, in the horrendous layoffs we’ve seen recently. But there’s a big part of politics here as well; not only the global agenda, but people with their pet projects, the whims that happen year to year.

Ryssdal: What’s the take-away going to be then, from Davos 2009?

Keene: I think the take-away this year, without question, is the single word “trust.” I saw it on the side of a bus. Richard Edelman, the PR giant, ticked it off with his annual opening breakfast. And if there’s one word that’s been percolating through the system here, how do elites — and particularly business elites, those beleaguered CEOs — how do they win back the trust of their shareholders? And for that matter, the public at large?

Ryssdal: Well, exactly. Make that connection between Davos and what’s happening in middle America right now.

Keene: I think there’s an important connection. The CEOs get beat up by their shareholders, they get beat up by the media. They’re acutely aware that somebody’s got to go to the revenue line, somebody’s got to buy the products. That’s that middle America you talk about. It’s not just one discussion, Kai. It’s many, many discussions through these four days about how do you earn back the trust, and indeed the loyalty of middle America, or for that matter, the middle-advanced economies. That’s going to be the project forward to next year.

Ryssdal: Bloomberg’s Tom Keene in Davos. Tom, thanks a lot.

Keene: Great to be with you.

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