In my first 24 hours in Davos, Switzerland, here are several phrase I haven’t heard: “Goldman, Sachs,” “subprime mortgages,” “American hegemony,” and “don’t you love that minaret?” The last isn’t surprising. But the lack of the first three speaks to a shrunken American presence.
The last few years Davos was dominated in large part by what American banks and policy makers were doing. During the credit bubble, the big global, U.S.-based investment banks – Citigroup, Lehman, Bank of America – strutted around the slopes, their egos and balance sheets swollen. Once they began to crash, the U.S. policy response became extremely important. Last year, the buzz was all about the new regime in Washington.
But this year, several factors have combined to render the U.S. less of a presence. Technology CEOs are here, but financial services CEOs, the original Davos Men, have chosen to spend more time with their bonuses this January. Sure, some bankers and U.S. magnates are here – look carefully, and you’ll spot Blackstone Group CEO Stephen Schwarzman and a few hedge fund managers known mostly to readers of the money & investing section of the Wall Street Journal. But the most powerful U.S. banker, J.P. Morgan Chase CEO Jamie Dimon, who was slated to headline a panel about restoring corporate trust, didn’t make it. Goldman Sachs CEO Lloyd Blankfein has stayed away. A few years ago, Citigroup owned Davos. Now its presence is spectral. Lehman Brothers and Merrill Lynch, former mainstays of the gathering, are bad memories.
And while government has surged in importance since the onset of the crisis, boldface Obama administration names are in short supply – for different reasons. Treasury Secretary Timothy Geithner spent Wednesday getting grilled by pitchfork-wielding Congressmen, not schmoozing with counterparts in the Congress Center in Davos. The State of the Union address required virtually all the members of the economic team to stick close to home. And since Senators, mostly Republicans, haveplaced holds on many key Treasury nominees, there weren’t that many people to send in the first place.
So who is representing? FTC Chairman Jon Leibowitz(not to be confused with the more famous and more politically powerful Jon Leibowitz) is here. I caught a glimpse of Robert Hormats, Under Secretary for Economic, Energy and Agricultural Affairs. Rep. Barney Frank was here, Sen. Max Baucus is slated to be on a panel, and Lindsey Graham is set to headline a private News Corp. pan-global conservative evening. FCC Chairman Jules Genachowski is on the program. They’re holding out hope that Larry Summers, one of the original Davos Men, will make an appearance over the weekend.
By recent historical standards, this is a weak showing. At past gatherings, senior American banking and government officials have occupied prominent speaking slots on the opening day and thus helped set the tone. In 2008, Condoleezza Rice gave a full-throated, unapologetic defense of the Bush administration’s record in one of the afternoon keynotes. On Wednesday afternoon, the most prominent American speaker wasn’t even a U.S. citizen. French Prime Minister Nicolas Sarkozy, dubbed l’Americain by his domestic critics, delivered the opening address, warning of a “crisis in globalization.”
The smaller U.S. presence confirms that the world’s economic geography is shifting. The United States matters less than it used to, and the U.S. financial sector is continuing to shrink. This was evident as well at the most important activity at Davos – the night-life. For a certain subset of the attendees, the high-minded conferences during the day are simply prologues to a series of receptions, dinners, nightcaps, and after parties. Each night, adjacent party rooms are filled at the Belvedere hotel, the only truly posh hotel in town. They, too, are a good barometer of who is up and who is down. The party staged by Forbes, the swashbuckling celebrator of capitalism American-style, was sedate, sparsely attended, devoid of young people. Next door, the nightcap staged by DLD, the European forum for digerati, was packed and rocking. (Although somehow the recipe for Mojito translated into German went horribly wrong.) An Indian company was offering cocktails downstairs, and South Africa had taken over a bar in the lobby, complete with throbbing music and face painting. A surprising number of people emerged from the bar with dots and stripes painted across their faces. At Davos, even the most dignified, self-controlled, image-conscious people slowly let down their inhibitions. This process usually culminates in scary establishment dancing at the Google party on Friday night. (Here’s David Gergen doing the conventional wisdom boogie at the Google fest in 2008.) At least America still has Google.