Old Political Elite Out, Trump Brings in New Business Elite

by Diane Francis


The political elite, many of whom are concerned about the rise of Brexit and U.S. President Donald Trump, spent some time whining and dining during last week’s World Economic Forum in Davos, Switzerland.

But the corporate elite, those who financially support the world’s most rarified gathering, were busy figuring how out to profit by divesting from Britain, Mexico or China and investing more in the United States.

Conversations included how banks who have called London home for two decades are going to scatter operations across other cities in the European Union, and how UK-based automakers will downsize and relocate to the continent. Others talked about redirecting their supply chains and manufacturing facilities from low labor cost countries to the U.S.

All of this is ironic. Trump talks like he is anti-establishment but is putting together the most elite cabinet in history, consisting of millionaires and billionaires. He wants to spend trillions building infrastructure, slashing taxes and regulations. He wants to force companies to stop offshoring and create jobs stateside.

“The U.S. looks like it’s a great place to invest right now,” Huw Jenkins, vice chairman of Brazil’s Grupo BTG Pactual told Bloomberg. Even China’s giant holding companies said they will be on the hunt for investments and companies in the U.S. to buy.

All of which may or may not help the average American, but it certainly will benefit the corporate elite. That is why there has already been a Trump market boom.

But billionaire George Soros, also a New Yorker and pillar of Davos, is skeptical. This week he called Trump a “con man,” has made large bets against markets in anticipation of Trump. But he has lost an estimated $1 billion doing so. Unabashed, he maintains that there will be revaluation of markets because Trump’s ideas contradict his advisers and will cause fights, inconsistencies and uncertainty.

However, like it or not, Trump brilliantly perceived and surfed the global zeitgeist. An study released in Davos by the Edelman Group, quantified this. Called the “Edelman Trust Barometer,” this year’s annual survey found that the disparity between the elites who “trust” their national institutions and the rest of their populations is widening in every country in the world.

This is a harbinger for more electoral upsets, said Richard Edelman to his select audience. Among the lowest “trust” levels are in countries facing elections shortly: In France, trust in institutions is 38 per cent among the general population; in Germany, it’s 39 per cent; Turkey, 41 per cent; Japan, 34 per cent; Ireland, 35 per cent; Sweden and South Korea at 36 per cent, to name a few.

“This is barometer for uncertainty,” he added.

The reasons for the mistrust are the same, regardless of geography: erosion of social values, globalization, corruption, immigration and the pace of innovation. Even in the United States and Canada, trust levels are among the lowest in years for both, at 47 per cent among the general population while over 60 percent among the elites.

This becomes a target-rich reality for populists everywhere, who like Trump, blame “culprits” such as the governing elite and globalization of trade.

“For too long a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost,” Trump said in his inaugural speech.

Then he attacked globalization. “The wealth of our middle class was ripped from our homes and redistributed all across the world,” he said.

Of small relief to many of Trump’s opponents was his clear promise to insure that benefits are spread fairly across the entire population.

“Whether we are black or brown or white, we all bleed the same red blood of patriots,” he said, adding that a child born in a Detroit ghetto or one born in Nebraska each deserve equal opportunities.

His address was not lofty but a reconstituted version of his stump speech with a few more flourishes. It was tinged with anger and not aspirational. And it was as feisty as fits the mood of a country in which many have lost faith in their institutions.

Financial Post