Davos, Switzerland
Welcome to Part II of these scribbles from Davos, high up in the Alps. Once in a while, you need to take a break from the political proceedings and just look around–to be in awe of what is awe-inspiring. I am right now, as I type, sitting at the foot of the “Zauberberg,” or “Magic Mountain,” about which Thomas Mann wrote. Not that I’ll ever finish that book (or Bleak House, or Middlemarch, or . . .).
Longtime Davos Journal readers may recall that I once stayed at the very sanatorium–the sanatorium about which Mann wrote, which is now a hotel. I had the book with me. I still couldn’t persevere in it. (Bill Buckley used to say that about books he couldn’t stick with: “I couldn’t persevere.”) (Also, he once sent me a CD, of music by someone he knew. He wrote, “Me no like. You?”)
Just to remind you, we’re at the Annual Meeting of the World Economic Forum. The title of the meeting is “Shaping the Post-Crisis World.” For Part I of this journal, go here. And where’d we leave off?
In any case, come with me to a session called “Update 2009: North America.” The panelists are Arianna Huffington, impresario (impresaria?) of the Huffington Post; Elizabeth, or Lally, Weymouth of Newsweek; Frederick Kempe, long of the Wall Street Journal, now the president and CEO of the Atlantic Council; and your correspondent (i.e., me). The moderator is Josef Joffe, the editor and publisher of Die Zeit, in Germany. I always call him “my fellow Michigander”: because he was an exchange student in Grand Rapids. (He was in Republican territory; I, in Ann Arbor, was not.)
Before the panel begins, a film plays continually on a monitor in the room–it is a loop. And what it shows is young people all over the world praising Obama, sometimes singing his praises, literally. They wear Obama T-shirts and chant and sing his name. We panelists are to assess Obama as a global phenomenon.
Introducing me, Joffe says, “Representing the Left . . .” And he asks each of us this question: “Why did the whole world want to ‘vote’ for Obama, and why does the world regard him as a ‘global president’?” I know you get enough of my opinions–and I don’t have to travel all the way to Switzerland for you to hear them–but let me tell you how I answered. It went something like this:
A lot of it has to do with style. Obama’s style is congenial to a lot of people, where Bush’s was not. The media were hugely enthusiastic about Obama–and that generated enthusiasm in others (consumers of media). Obama held out the hope of tranquility, and that is, of course, very appealing to people. You might even say seductive. People are tired of war, conflict, and confrontation. George Bush once called the War on Terror “a heavy lift”–and he went on to remark that the world doesn’t like a heavy lift. Who does?
Also, Obama managed to leave the impression that it has all been a little unnecessary–all of this war, confrontation, and pain.
Furthermore, Obama held out the hope of a humbler United States–a United States that walked more softly in the world. Of course, so did George Bush, when he ran in 2000. He appealed over and over for a humbler foreign policy. But then came 9/11 and the War on Terror, and everything was changed.
More from Joffe: “How does Obama’s worldwide popularity fit in with contemporary theories of American decline and the rise of other powers such as China, Russia, India, and Europe?” More from me:
I think much of the world still looks to the United States for leadership. I think people are torn between wanting the United States in the world and wanting it to go away. You often hear, in effect, “Yankee, go home, but not too soon,” or, “Yankee, go home from this place, but come to this other place–we need you.”
Think, too, of the issue of Iran and its drive for the atomic bomb. I think the eyes of the world–particularly the Arab world, I might say–still fall on the United States for an answer, no matter the participation of other nations and agencies, in negotiations and so on.
Another question from Joffe: “How can this ‘global president’ meet the expectations of him?” Another answer from me (longish):
When a person becomes president, he’s apt to find his mind concentrated. It is a very sobering experience, becoming president. The job carries with it awesome responsibilities. George W. Bush has talked about this a lot. He has said, “I see the threat assessments every morning. I have to do something to keep American citizens safe from terror. Everyone else can go about his business and not worry about it–or take merry potshots at me.” Things may look different to Obama in the Oval Office from the way they looked on the campaign trail.
Take the issue of Guantanamo Bay. The whole world says, “Close Guantanamo, it’s a disgrace.” Okay–but what do you do with the detainees there? We have already released a great many. In fact, there was a report that said that over 60 had returned to the field. And that is not necessarily good news.
Take the issue of clandestine programs, rendition, interrogations, and all the rest of it. The world, or certainly the country, screamed at George W. Bush to “connect the dots.” That was the great buzz phrase: “connect the dots.” Okay, how do you do that? It’s not necessarily an easy task. It could be merely accidental that the United States has not experienced another 9/11, but I rather doubt it. As Bush and his people say, “You never get credit for what didn’t happen.” And, of course, nobody likes a preemptor–they always say that the preemption was unnecessary.
A lot of people–a lot of conservatives in America–think that it’s good that the Democratic party now has essentially the leadership in the War on Terror. If the Terror War is to be like the Cold War, another twilight struggle, as John Kennedy said, then it will go on a long time, and encompass both Republican and Democratic presidencies.
And I do think that Obama will find that the War on Terror, or a war on terror, has to be fought. That it would be dangerous to go back to law enforcement and police work. You know, when jihadists bombed the World Trade Center in 1993, we took ’em to court. And one of those terrorists fled to Saddam Hussein’s Iraq. According to President Clinton (and former national security adviser Sandy Berger), the Sudanese authorities offered us Osama bin Laden. But we responded that we didn’t have enough evidence to convict him in court.
Well, a lot of people thought that, after 9/11, a different approach was necessary. That the U.S. had to go on offense, instead of trying to hunker down. And I have often thought of that old Leninist expression: You may not like war, but war likes you. It has a way of finding you and drawing you out. I think that is the case here.
I also think that Obama may find that he has to choose between the approval of the world–certainly the approval of the world’s media elites–and safeguarding American security. And I imagine he will choose security, which could prove interesting, where image is concerned. It’s hard to remain universally popular and be an effective commander-in-chief.
Look, the bottom line is, Obama and his people may find that Bush and his people weren’t so stupid after all. In fact, they’re probably finding that out–more than ever before–this very month.
You may ask, “Why don’t you report other people’s answers, instead of just reciting your own?” And that’s a very good question (though a little snotty). The answer is, Such reporting is not allowed, from a session like this. Besides, as WFB used to say, “I’m the world’s foremost expert on my own opinion.” Suffice it to say, the other panelists had very interesting comments to make–even if only one panelist made them in a flavorful and enjoyable Greek accent.
I’ll give you something amusing from the audience Q&A: A Chinese man stood up to ask a question, and he said that he had been at Harvard and had played basketball with Obama–that was his “brush with greatness,” as Letterman says. Joe Joffe said, “You noticed he worked in that he went to Harvard.” And then I trotted out the old line, “You can always tell a Harvard man, but you can’t tell him much.” Our questioner took it all in good humor.
‐Lunch is with George Soros. He speaks to a group of journalists in a Davos hotel. His subject is the financial crisis, and he is very good on it: sober and analytical. I must say, I like him better on economics and finance than I do on politics and foreign policy. Obviously, in this field—finance–he knows what he’s talking about. His authority is real.
He makes the observation that, last September, “the real economy fell off a cliff”–not just a paper economy (if I have interpreted him correctly). He also says that nationalization is “politically unacceptable at the moment”–words that strike me as ominous. (Soros sounds rueful.)
Something interesting, and entertaining, happens in the Q&A. A journo asks him, “Did you see this crisis coming, and have you profited from it?” Soros answers that he did not quite predict the crisis, but he came close to doing so–he predicted aspects of it. Certainly the “super-bubble,” as he termed it, had to burst. As to the second part of the journo’s question, Soros says, “I was able to protect my capital.”
I love that sentence: “I was able to protect my capital.” Wish all of us could say that!
By the way, as plenty of others have pointed out, Soros looks rather like an owl–a handsome old owl. Not necessarily a wise one, but one worth hearing, now and then, when the subject is right . . .
‐On the platform in the plenary hall is Wen Jiabao, premier of China. He gives a reasonable, sensible speech–even an admirable one. It could be given by a professor at Harvard Business School, or a fellow of the American Enterprise Institute. He talks about the economy, both in China and worldwide. He says that we must address the “root causes” of our problems, and find a balance “between saving and consumption, between financial innovation and regulation, and between the financial sector and the real economy.” China, he says, is a “big, responsible country” that has responded to the crisis in a responsible way.
He later says, “Our people are hard-working, persevering, and resilient.” When the translator starts to say “persevering,” I swear, I think she’s going to say “persecuted.”
Wen says that the countries of the world “are tied together in their destinies and can hardly be separated from one another.” And then–in words to warm the cockles of all our hearts–he says, “Past experience shows that, in a crisis, it is all the more important to stick to a policy of opening up and cooperation. Trade protectionism serves no purpose, as it will only worsen and prolong the crisis.”
He ends on a positively poetic and uplifting note: “The harsh winter will soon be gone; spring is around the corner.”
Listening to Wen Jiabao, it is possible to forget that you are listening to the chief of a one-party dictatorship; of a country with a gulag (laogai); of a country that denies citizens important rights (religion, speech, assembly); of a country against which very, very credible–all-too-credible–charges of organ harvesting have been made.
That is not to mention other Chinese policies–its threats to Taiwan; its stranglehold on Tibet; its propping up of the genocidal regime in Khartoum; and so on.
Our host, Klaus Schwab, says, “We have time for one or two questions.” And I think of what Nancy Astor is supposed to have said, on meeting Stalin in the Kremlin: “Hello, Mr. Stalin, when are you going to stop killing people?”
But Wen is asked other questions. For example, “You have in this room many American friends.” (Very true.) “What would be your message to the new administration?”
Forgetting Wen’s message to the American administration: What will the new administration’s message be to him? I think of something a senior official in the Bush administration recently told me: “We have brought up human rights–including political prisoners–in every meeting we’ve had with the Chinese.” Will the same be true of the Obama administration?
It would be pleasant, one year, to see the Dalai Lama in Davos. There is a great man—a Nobel Peace Prize winner, tailor-made for this convocation. There are always other Peace Prize winners: Wiesel, Gore, Annan, ElBaradei. The Dalai Lama would be a superb, honorable addition.
When Wen leaves the stage of the plenary hall, it is to great and extended applause. I can only think of President Bush at the Middle East Davos last spring. The applause—wan–barely held out until he left the stage.
‐Klaus Schwab himself gives a speech. As you recall, he is the founder and executive chairman of the World Economic Forum–its presiding father. And he begins,
Welcome to the World Economic Forum Annual Meeting 2009–a very special event. What we are experiencing is the birth of a new era, a wake-up call to overhaul our institutions, our systems, and, above all, our thinking and our actions, and to adjust our attitudes and values to the needs of a world which rightly requires a much greater degree of responsibility and accountability.
People have labeled this crisis as the worst ever and in many other catastrophic terms. Here we do not want to hear about such statements again, even if they are true. We want to concentrate on how we can move out of this crisis and how we can shape the post-crisis world in a constructive manner.
Today, people from every corner of the globe ask how it was possible that decisions could be taken, led by greed or incompetence and with no effective oversight–decisions that had terrible consequences, not only for the global economy but also for real people, who have lost their pensions, their homes, or their jobs. They feel bewildered, confused, scared, and angry. They may not understand what went wrong, but they are clear that their leaders have let them down. They now look to those leaders–corporate, political, and societal–not only to say sorry but to repair the damage to their families and communities. Gathered here are many of the world’s most influential leaders. We cannot sidestep our responsibility to work together to rebuild shattered economies and institutions. . . .
We are all in some way responsible for not recognizing the risks of a world completely out of balance. We should have listened much more to those who saw the [handwriting] on the wall . . .
And this, toward the end of the speech, was quite an attention-getter, I must tell you:
What I am saying today is consistent with what I have been saying for many years, but there is one decisive difference: Today we have reached a tipping point, which leaves us only one choice–change or face continued decline and misery.
Those words “tipping point,” in particular, are chilling–particularly from that source. But here is the poetic finish:
In conclusion, I hope that, with your engagement and leadership, Davos can act as it has done already a century ago, as a healing and revitalizing force, as a magic mountain, as a true sanatorium for the world, its economy, and its society.
‐Schwab then introduces Vladimir Putin, prime minister of Russia. (No president–no Medvedev–but I guess Davos can settle for the PM.) You can read Putin’s speech, in full, here. But I want to note a thing or two. Putin engages in clear gloating–while explicitly saying that gloating is not on:
In the last few months, virtually every speech on this subject [the global financial crisis] started with criticism of the United States. But I will do nothing of the kind [!]. I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasized the U.S. economy’s fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just twelve months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.
The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.
Later, Putin says something that pricks up my ears. Check it out:
Although additional protectionism will prove inevitable during the crisis, all of us must display a sense of proportion. Excessive intervention in economic activity and blind faith in the state’s omnipotence is another possible mistake. [He has already mentioned others.] True, the state’s increased role in times of crisis is a natural reaction to market setbacks. [But,] instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent. The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.
In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.
Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors, and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.
And one more point: Anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.
After Putin’s speech, in a Q&A, Michael Dell says that he, too, was particularly interested in what the prime minister had to say about overweening government. He says that he was surprised–as well he might have been. He then asks Putin–if I have heard him correctly–what the world can do to help Russia in the area of computerization: getting people, particularly young people, online.
Putin says (I paraphrase), “We don’t need any help. We are a strong country. Invalids need help, children need help, developing countries need help.” The Russian journalists around me shriek with delight. Putin continues, “Our computer experts are as good as anybody, and I think even the Indians will admit this.” More shrieks of delight.
It is interesting to see journalists take such pride in their national leader abroad. I have a feeling they will not be writing anything too critical–which in any case is prudent of them.
‐In the halls of the Congress Center, I see a friend of Putin’s–Valery Gergiev, the conductor.
‐I also see–completely unrelated–John Negroponte. Few Americans have done as much for their country as he has, in a long, varied, and noble career.
‐Kofi Annan swans around, as he customarily does. He’s a trim, slight, handsome, serene fellow. He gives the air of being on top of the world here in Davos. This is his environment, his milieu. I imagine that most people still regard him as U.N. secretary-general, if only de facto. The actual one is here too (Ban Ki-moon). But his profile seems much lower.
‐End on an offbeat–a very offbeat–note? Since I started coming to Switzerland and Austria, many years ago, I have noticed something: The public restrooms are cleaner, pleasanter, and more inviting than most people’s living rooms, worldwide. This is even true of the outhouses on the shores of Lake Davos! Of course, they are to regular outhouses what Rolls-Royces are to scooters.
‐A final, final note. I may not have Part III of this journal on Friday–that may come later, like Monday. Reason is, it’s very hard to Davos and Davos-journal at the same time. It’s hard to participate in the conference and write about it at the same time. Time for scribbling, amid the Davosing, is scarce. In any event, this journal always continues–in the present tense, of course (usually)–for days after the conference itself ends (which is Sunday).
But enough of the mundane: Thank you, and I’ll see you soon.