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Painting CEO's good, politicians bad


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A deep divide in America’s global outlook
By Chrystia Freeland
Published: June 6 2006 19:39 | Last updated: June 6 2006 19:39

Hank Paulson, outgoing chief executive of Goldman Sachs and Treasury secretary-designate, made business trips to 21 countries over the past 12 months, visiting many of them more than once. He has travelled to China about 70 times over the past 15 years. Compare that with the global itinerary of Senator Charles Schumer, the New York legislator who is Mr Paulson’s senior elected representative in Washington: Senator Schumer’s visit to China in March was his first official congressional trip abroad in a career in national politics that began more than one-quarter of a century ago.

The jet-setting financier and the stay-at-home senator are an admittedly extreme pair. No business is more global than Goldman Sachs, while Senator Schumer is a proud homebody who tells reporters that one of the secrets of his political longevity is his determination to stay close to his grassroots supporters. But the contrast between the two also points to a divide in America today that helps to explain the country’s ambivalent response to globalisation: the US business elite has gone global, but the rest of the nation, including much of the political establishment, is lagging behind.

Outside the US, the time-worn caricature of the parochial Ugly American has been lent fresh vigour by the Bush administration’s proudly unilateral and often inept approach to the world in general and Iraq in particular. Like most conventional wisdom, there is something to this stereotype. Just one-third of adult Americans hold passports. Walk across the border to Canada and the figure becomes more than 40 per cent. Americans prefer to read books and watch movies about the US or, at the very least, about Americans abroad. Foreign-language teaching for schoolchildren is abysmal, yet the political preoccupation of the moment is ensuring that immigrant children learn English and not that native-born Americans learn something else.

Even more discouraging is the reality that this narcissism extends to much of the country’s political leadership. This spring, when I sat on a breakfast panel with a charming and gregarious US senator tipped as a possible presidential candidate in 2008, he offered a detailed answer to a question on internet neutrality. But, in recounting a story of his own recent visit to Pakistan, he stumbled when it came to identifying the language of his village hosts, falling back on “not English”.

Where the Ugly American caricature falls apart is in the executive suites of the nation’s top companies. It is easy to mock the private jet culture of American CEOs, especially when those planes are pressed into service, as they occasionally are, to visit golf courses or one’s personal Tuscan vineyard. But most of the air miles are being racked up travelling to the international offices and international clients of companies for whom the world has been flat for some time.

The result is an American business establishment with incredibly sophisticated and personal knowledge about the rest of the world. Ask the leader of a US private equity group about Europe’s economic prospects, as I did a few weeks ago, and he may well answer with a detailed description of his latest, lengthy meeting with Angela Merkel, the German chancellor, and a perceptive analysis of German and European Union politics. And do not dare mention China or India unless you have the time for a discourse likely to touch on everything from demographics, domestic regional differences, factional politics within the Chinese Communist party, and whether robust infrastructure or an open society is a more important requisite for sustainable economic development. Karl Marx, a poor political policymaker but a fine analyst of market economies, turns out to have been right with his observation that capitalism is inherently cosmopolitan.

There is good reason why America’s bosses are generally more worldly than its pols. As Rick Wagoner, chairman and chief executive of General Motors, pointed out during a visit to the Financial Times last week, there is a big difference between being responsible to shareholders, whose preoccupations are increasingly global, and domestic voters, whose concerns may not be.

That may understate the pressures on US legislators to be mindful of former House speaker Tip O’Neill’s maxim that all politics is local. While still a young congressman, John F. Kennedy toured Europe, the Middle East and Asia, meeting foreign leaders and educating himself about their concerns. Politicians who do that today risk being accused of indulging in foreign boondoggles at the taxpayers’ or, worse, corporate lobbyists’ expense. In a tight election race, according to the former staffer of a congressman from the heartlands, it can be downright dangerous to travel abroad.

The result is a deep and widening rift between business people and the political herd on issues ranging from foreign investment into the US, to immigration, to America’s engagement with multilateral institutions.

Loving American CEOs does not come naturally to most of America’s foreign critics, but it is time to appreciate that the country’s businessmen are its best ambassadors abroad and the world’s finest lobbyists at home.
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