Tuesday, May 23, 2017

Family ties, business ties, and Trump's business connections

The LATimes has a story about Trump's son in law and his friendship/business relationship with a Saudi prince.

Starting last winter, even before Trump took office, the two trusted family advisors quietly joined forces to mend U.S.-Saudi relations strained by President Obama’s nuclear deal with Iran, which the Saudi rulers opposed, and his moralizing on human rights. which they disdained. The results were clear Saturday as President Trump arrived in Riyadh — the first stop in his first trip abroad. Kushner and Prince Mohammed kept a close eye on the president and the king during a long day of ceremonial and substantive events, including a roaring military flyover in an azure sky, a tribal war dance by men wearing flowing white thobes and waving huge silver swords, and the signing of a $110-billion arms deal, parts of which began under Obama.

A lot of the press sees Trumpie boy through the eyes of politics: they don't get his sarcasm and hyperbole (used to make a deal: as in bargaining at the Palenke for a better price, which is how business works here ) and isn't recognizing that he is working as a businessperson.

This is, of course, how business works in the Philippines: not just loud bargaining (no quiet negotiations) but conducting business via personal ties.

See Fukuyama's book Trust, which describes how capitalism requires trust, and describes two versions of it: Trust of family, or trust of those you know through intermediate institutions.

The first, seen in Asia/Arab coutries and most of the world, is that you trust only your relatives/ clan members or "compadres" (close friends). This is how Lolo thought. He only trusted family, or the family members of those who traditionally worked for our family as farmers, maids etc. who are considered part of the family here.

you can see the problem: how do you find a job when you don't know anyone? (Another problem: Petty theft. Since they are part of the family, often things they need and you don't seem to need disappears. Sigh.)

Here in the Philippines, it makes it harder for outsiders to get a business opportunity if you aren't part of the elite families, or aren't Chinese. (which is why our family went into medicine instead of business or politics).

the second way of influence: where intermediate institutions allow you to make connections.

This is what we see in the USA, but are starting to see here in the Evangelical churches, who help their members get jobs and where businessmen are able to have outside ties with other businessmen. You also see this in the Rotary Club, the Masons, the Knights of Columbus, etc.

The problem with either form of Trust, that it can lead to corruption, where you give "the good guy"a pass on a minor thing like taking bribes, because everyone does it and hey, he's a ____ (fill in the blanks: a fellow Mason/ member of my church, husband of my cousin, etc.)

This second line of trust, via institutions, has one advantage over family based trust: it allows outsiders to join the club.

But you still have outsiders, so there is a push to get ways for outsiders to have their own clubs etc. or deliberaatly encourage them in ways for them to make these valuable contacts.

That is what the various NGO's and UN's initiative for women (such as the World Bank's initiative for women entrepeneurs incorrectly called Ivanka's fund in recent news reports) is about: Getting business women into the loop. (and a lot of third world women a re in business, but at a low level e.g. street vendors).

Neither of these systems are "good or bad": Both are open to corruption, so government oversight is needed. However, this allows the unelected bureaucrats power, and soon regulations become a more important than reality.

But of course, in places like the Philippines, people don't pay attention to the law. A small "gift" will make the law go away. Which is a problem.

I knew things were improving in Colombia when a civil clerk refused my "gift" and lectured me about it.

In the Philippines we are, of course, in transition in all of this, but personal ties do matter,as we saw when a friend of Hillary who arranged for the UN to protest a graft case against a lovely ex president who was a classmate of Bill's.

So its nice to know that one of Duterte's friends is a friend of Eric.

In other words, personal ties matter in business, and in diplomacy.

I suspect a similar personal ties to the Arab world via Trump's and TRex's business connections. And he is using these connections to get things done.

This enables you to bypass the red tape and get on the phone to settle things.

Peace in our time? I'm not holding my breath, but at least they are talking.

On the other hand, this business way of doing things can backfire.

So when Trump notes to Comey that Flynn is a good guy (presumably Trump was hinting that a lot of the charges are an attempt by his enemies because he openly opposed their helping ISIS), it was just doing business as usual...  But taken out of context, it can be spun to seem otherwise.

On the other hand, no one except the dittoheads got upset when Bill Clinton talked about grandchildren with Loretta Lynch, and voila Hillary's corruption problems disappeared, hey no problem. She's a good guy who didn't mean to break the law, so give her a break.


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