Davos09: A Crisis and Failure of Leadership

The crisis the world is suffering through now is a failure of leadership. The leaders of the world are in Davos. If the world is watching what happens here this week, it will be to hear solutions and see responsibility and accountability. I'd say that's not off to a great start, at least on the latter.

This morning, I started my Davos week with talk of trust. The Edelman Trust Barometer presentation revealed plummeting trust in financial, government, and journalistic institutions: 62% of adults in 20 countries trust companies less than they did a year ago. Trust in government is even lower.

Nonetheless, the first trend I spot here: the rise of government. News reports have been saying that this will be a dialed-down Davos, but I don't see that; it's the same Davos with the same pastries and parties. The change I do sense is less of a presence and apparent swagger from business and more from government. "Power has shifted from Wall Street to Pennsylvania Avenue," said a speaker the Edelman event.

The other obvious trend is America to the woodshed. "America is the new Europe," Richard Edelman said. In a decade of the survey, they have never seen such a precipitous drop in trust in one category: American business, falling from 58% to 38% in a year, now stands equivalent to France and Germany and under the UK. The least-trusted industries in the U.S.: no surprise -- automotive and banking.

In most markets, trust in business remains higher than trust in government, "which is not a good thing for either," Edelman says. Asked who can fix the economy and prices, government is now clearly the preferred leader, the survey says. The percent who agree that government should impose "stricter regulations and greater control over business across all industry sectors:" 61% in the U.S. up to 84% in France (65% worldwide). The percent who trust business less: 62% worldwide, ranging from 77% in the U.S. down to 49% in India.

The survey reveals a new world spit: optimists in China (where trust in business rose from 54% to 71% in a year), Brazil, India, Indonesia, pessimists in the US, Europe. "The United States picture is really bleak. I can't put a better face on it," Edelman said.

Edelman advised companies to make change and not wait for regulation, to recognize mutual social responsibility, and to show "shared sacrifice.... This is not the French Revolution yet but it is certainly not the roaring 2000s," he said.

His advice on communication: "It can no longer be Moses from the mountaintop." You have to inform your employees and enable them to blog, for they'll talk anyway. Communication moves from messaging to informing the conversation, he said. If one can trust companies -- only 29% do. Government is worse; only 27% trust what they say.

Lionel Barber, editor of the Financial Times, began the session saying that trust is an issue for the press as well. Edelman found that trust in business magazines and analysts fell from 57% to 44% and from 56% to 47% respectively. Trust in TV news is down from 49% to 36% and in newspaper coverage from 47% to 34%. Stop on that: Two thirds of people don't trust newspaper articles.

After all this talk about trust, though, breakfast ended up serving spin. An executive of AIG split a very long hair, drawing a distinction between distrust over morals and distrust over competence and he argued that our issue now is the latter. An executive at another company said trust fell from a record high to a record low and he wondered whether business had simply oversold itself. Then there was much discussion of a new concept (or new buzzphrase): "private sector diplomacy." Isn't that a fancy way to say PR?

Comments

[DiogenesOfAlaska]

I couldn't agree more with the hair-splitting AIG executive - whose name I don't know

'distrust over competence'

is clearly the core problem. I consider knowledge of the notion of functioning markets and what it takes for them to function as part of competence.

And as far as that is concerned, all we need to do is: to go back to square one. As simple as that.

[jhNY]

The international overclass of capitalists cannot fix what they have broken, and their clients in government cannot do anything without their approval, as they are entirely in their pockets. All over the world, trust in leadership has been rewarded by corruption and criminality and graft. It's going to take alot more than conferences to dislodge the draculas from the necks of ordinary people.

[pundit27]

yes, some private diplomacy and public roadshows and start-ups . . . .

[Mavin1620]

Davos is a confab of failures this year, at least on the industrial and financial side. President Obama has sent his people, and they will report back, and I suspect that the reports will not be favorable.

[Erdgeist]

While I agree that it is a failure of leadership, we have only to remember Bush. The real problem has been a leadership of the idiot. Last month I watched the movie, *Idiocracy*. It is a brilliant futuristic parody on just how stupid we might become in 500 years. An excellent review of the movie is at: http://www.naturalnews.com/021558.html

[vippy]

Where was the press when all of this had been going down. I saw the signs back in 2001 and had
sense to change parties because I did not care for the direction Bush was taking and after I just
had voted for him. Pelosi and Reid have done nothing for the people, not while Bush was in office
and neither now, I saw that with the latest Revision of the Credit Card Bill. Barney Franks claimed they
had a lot of pressure from the banks, imagine that, after we bailed out the banks and they are ours
so to speak. They are still catering to big business and the fact they hardly touched the credit card bill,
nothing for us people really is a slap in our face just like their new energy bill they passed 2 years ago
which calls for 35 mpgs by 2020. Have they lost their minds? That shows just who our politicians are,
out for themselves!

[island-in-alabama]

The press is owned by, and works for, those who caused this.

Even now, with the failure of the corporatists blatantly obvious, the MSM is in full court press doing all they can to fight reform.

[JScott]

Interesting that Barack Obama is NOT there.
And I'd trust him more than any of the folks there.

[island-in-alabama]

Trust in the press has plummeted because the press has completely failed to provide the public with accurate information - instead acting as a propaganda organ for the corporations.

Trade press prints corporate-written press releases and advertising pieces as if they were actual articles. Rather than critical questioning and reporting, the press cheerleads investors into the latest corporate ponzi scheme.

Political press constantly distorts the facts to favor corporate positions, attack politicians and interests the corporations don't like (e.g. Labor, Democrats) and tries to tell Americans we are a right of center nation when the data indicates Americans are left of center on social issues.

When the press so fervently and consistently misleads us, often through willfull denial, disortion or suppression of the facts that have brought us to this depression, the public's only sane response is to stop trusting it. That trust can only be regained when the press regains it's integrity. Until then, the trust will continue to drop.

The press and their corporate masters should think about why 2/3 of the public distrusts them. So should the government, which must rehabilitate media ownership rules to bust the media monopoly held by the corporations

[Yermammy]

I'm so pissed off that i'll just let your comment back mine. This Military/C­orporate/M­edia/Polit­ical conglomerate, that is the United States, is exactly what President Eisenhower warned us about.
Add to that President Washington's warning about avoiding "entangling foreign alliances" (read Israel amongst others) and the absolute fantasy of the Reagan era (which continues to this day) and all I can surmise is we're just a bunch of idiots with the attention span of a mosquito. I guess it's going to take massive upheaval of our way of life for sheep to figure this out. Good, let the devastation begin. The first real signal that we've decided to change would be to repudiate the past and hold those responsible to account, but again the media, beltway and corrupt politicians are blocking that notion. Show me the change.

[Torus34]

"A Crisis and Failure of Leadership"

Nay! I say nay, good Sir.

It is, instead, a crisis and failure of competence.

[island-in-alabama]

As well as integrity. The sense of entitlement of the corporate power structure that have done this to the world is beyond words. They have no shame

[dmyron]

The corporate elite should be forced to feel the pain of "Mainstree­t"......on­ly then will the
decision-makers begin to make decisions based on humanitarin issues-and only then.

[Steven G. Brant - Huffpost Blogger]

Hi Jeff,

I invite you to read the essay I just posted entitled "Mountain Redesign". I wrote it in response to the essay in The Economist on what "Davos Man" should do called "Mountain Reboot". We don't need to "reboot" a failed, obsolete design. That system will just keep on crashing. We need to redesign our global economic system.

Enjoy your week!

Steve

[joebaggadonuts]

I like the shift you propose Steven. Thanks.