There is a new cognitive bias. Call it the Davos Effect.
The Swiss alpine village of Davos enjoys a subarctic climate. That makes it an ironic location to debate global warming, as a cadre of international elites did at the World Economic Forum annual meeting.
But the real irony was the warm reception given to Donald Trump’s keynote address. Could this be a sign that Trump has matured? Or was it “The Davos Effect” — if you survive a media onslaught, notoriety turns into celebrity?
Will the Davos Effect become the tipping point for a reversal of President Trump’s long and winding road to the most unpopular Presidency in recent history?
Trump and Davos are two phenomena I have had first-hand experience with during my career. I have known Trump since the 90’s when I brought him into Forbes for a chat with our editors about how he had (once again) amassed a billion-dollar fortune. (In New York’s real estate community, the Forbes rich list was your resume).
Every year I would attend the World Economic Forum where I wined and dined the superstar elite at the Forbes party held at the Belvedere Hotel. I even spent a bizarre moment negotiating to leave Forbes to become a partner of Klaus Schwab, the founder of the World Economic Forum.
Davos is an eponym for the World Economic Forum, like Hollywood for the film industry. It sits at the epicenter of globalization. Its followers earnestly believe they have the obligation to make a better world through a conflicted mix of corporate capital and social progressivism. In other words, everything Trump’s supporters mistrust.
Inviting Trump to the Forum was an obvious thing to do, as everyone knows wherever “The Donald” goes, media follows. The Forum is nothing if not media savvy. The founder, Klaus Schwab, is known as a global thinker. But his secret weapon is he is a consummate deal maker who labored for decades turning a low key conference into a shadow United Nations and himself into the Wizard of Davos.
Schwab built the Forum on ingenious attention to customer service for elites. They like to meet with other elites, and everything at Davos is arranged to make this happen instantly (through their own Facebook like platform he invented decades ago) and safely: the Swiss guards around Davos make the Vatican look sleepy.
Schwab doesn’t want to be a reigning leader as much as he likes the role of rainmaker. He recognized long ago that he is the dealer in a high stakes geopolitical blackjack game that brings some disagreeable characters to the table. Schwab’s role isn’t to promote one over the other or to like anyone in particular, just to keep the game going until he hits 17.
But what effect did Davos have on Trump? By that, I am not referring to a real effect on his thinking, although being invited to an elite throng of world leaders may appeal to his ego, and could get him to behave (for a while, at least).
The real effect is on the media’s perception of Trump, or more accurately, an effect on the media’s cognitive bias. There are several biases at play here, just like in a card game, and each one helps us to understand why the media saw Trump one way and may see him differently now.
- Expert Bias: we believe what we think we know, and the media is nothing if not a self-proclaimed expert on the presidency. Trump was a unique candidate, the likes we have never seen before. This makes him both a hero (to some) and a threat to others. The media wants Presidents to change the drapes, not tear down the building.
- Hindsight Bias: Trump’s media detractors didn’t like him during the campaign, so they sure weren’t going to like him in the Oval Office. In their book, he was a stain on history, and their coverage flowed from there.
- Celebrity Bias: those cognitive biases ran their course, and as always, started to bore eventually. Everyone knows Trump speaks foolishly sometimes, and acts rationally at others, to the amazement of his detractors. But what was missing was something Warren Buffett and Oprah Winfrey have learned: being a celebrity places you beyond the talons of those who would destroy you. Celebrityhood is reputation insurance for the rich and famous. Davos may have started a new cycle of Trump the celebrity. If so, what rich irony?
- In-Group Bias: it is the bias that makes us think our knowledge of others surpasses their knowledge of us. This explains why we find so much Confirmation Bias in the media’s early reaction to Trump. After a successful Davos performance, the chorus may quiet down or go home to memorize the new sheet music.
- Repetition Bias: The more you hear it, the more you believe it. If Trump plays his cards right, who knows? As a former casino owner, he knows when to bluff and when to call. He could start a new chapter that offends fewer and gives hope to many.
On the other hand, his casinos went bankrupt. So what will be will be.