LONDON--The G-20 came through. What I witnessed as a member of Secretary General Ban Ki-Moon's delegation was deeply heartening. The leaders were serious, consequent, and - yes - even efficient in their work. UK Prime Minister Gordon Brown ably chaired the conference, President Barack Obama brought America back to global diplomatic leadership, and a number of leaders filled the room with intelligence, commitment, and determination to cooperate. Standouts included Jose Luis Zapatero of Spain, Kevin Rudd of Australia, Felipe Calderon of Mexico, Hu Jintao of China, and Lula da Silva of Brazil.
The results were beyond what most, including myself, expected. IMF resources were raised significantly, to provide a liquidity cushion for global trade and production. The World Bank and regional development banks (such as the African Development Bank) were encouraged to boost lending, backed by commitments of the G-20 to raise the capital base of these multilateral banks. Taken together, the combination of new credit lines of all sorts - in effect, new liquidity - is on the order of $1.1 trillion. While this is much less than direct spending in its effect on aggregate demand, the contribution to increased global liquidity will certainly be helpful for many economies, especially emerging-market economies suffering from an intense credit squeeze since the Lehman bankruptcy last fall.
Serious progress was also made on a framework of tighter global financial regulations, including controls on executive compensation, crackdowns on tax havens, controls over hedge funds, and much-needed regulation of the "shadow banking" system (broadly meaning investment funds that depend on very short-term borrowing in forms that compete with bank deposits). There were also commitments to new forms of global cooperation in financial regulation, including procedures for removing toxic assets from bank balance sheets. The G-20 also agreed to do better in the fight against creeping protectionism.
The poorest countries, by and large, were not in the room. As usual, their plight came far behind the immediate concerns of the high-income and middle-income countries. Still, through the assiduous efforts of Secretary General Ban Ki-Moon and several other leaders, there was a clear re-commitment to the Millennium Development Goals, a strong reiteration of commitments on development assistance (implying an increase in development assistance from around $120 billion in 2008 to at least $160 billion by 2010), and an intention to launch new global efforts on stronger social safety nets for the poor (led by the World Bank). There was also and innovative support for smallholder farmers to raise the food production and food security of the poor, championed strongly by the Secretary General, President Obama, and Prime Minister Zapatero.
Two crucial issues remained almost wholly off the table, and will need to be brought in sooner rather than later into future G-20 deliberations. Exchange rates were hardly mentioned, despite the fact that exchange rate adjustments are surely needed to smooth the elimination of large and unsustainable global trade imbalances. Also, the increasingly fragile position of the dollar as the world's reserve currency was discreetly ignored. Monetary policy and exchange rates played a large role in the onset of the crisis, and we will need deep reforms of international monetary arrangements in order to secure a sustainable recovery.
With all that the G-20 really accomplished, two more points are vital to appreciate. First, the G20 actions will certainly not stop the recession in its tracks, nor even prevent unemployment from continuing to rise markedly. We remain in the grips of a very deep recession with a dynamic beyond any immediate solution. The G-20 actions will help to stop the downturn from spiraling into a yet-deeper collapse, but will not stop the recession by itself. Second, much of the policy framework adopted by the G-20 is only a sketch of policy, not the detailed regulations and implementation strategy. The very hard work remains of translating the G-20 achievements into practical action. For that, the leaders will have to recognize that they need to designate key officials for round-the-clock work. Communiques are but a start, not a finish, of the process of true global cooperation.
Obama Team Lays Groundwork for G20 Success - BusinessWeek
Brown claims G20 success as world leaders agree tax and interest ...
i guess in obama's mind, since he loves pouring money into broken programs and institutions (social security, medicare, GM, Ford)
After all the criticism of the Obama administration from Mr. Sachs, it is good to hear something positive from him. Perhaps he will go on the Morning Joe show with the good news if they will have him since they only seek Obama bashers.
Change can mean making something different.
Or it can be what trickles down to you after you are given a few pennies back to you.
We are getting change.
Drink the KOOL AID and a few pennies, not given to banks and special interest and the military, will be given back to you.
It is the TRICKLE DOWN THEORY brought into the 21st Century.
That is why Obama could use Reagan's guys - you know like Paul Volcker - to bring in this chang.
While we are at it, can you give any example where IMF loan was not paid back in full with interest by its borrowers?
Fight against protectionism.
This means kiss our manufacturing base goodbye. This means permanent trade imbalances. This means massive inflation that will destroy all US business dependent on discretionary spending. This means elimination of the US as a significant player in technoilogy advances. This means permanent Depression in the US.
No significant change in regulation of international finance. Just a watchdog with no authority.
This means business as usual from Wall Street including: phony book valuation by bankers instread of mark to market. Bankers and Hedge Fund speculators driving oil to $140 with impunity. Next speculator target is cap&trade carbon tax.
"The proof is in the pudding...!"
As a Democrat this adulation is a little scary. Do we stand for principles and ideals as a party or do we stand for idol worship?
Miracle?
I will opt for rational over miracle anyday.
We see a lot of fundamentalist attitudes towards this President.
What we don't want to get to is a fundamentalist following without thinking.
“In religion and politics, people’s beliefs and convictions are in almost every case gotten at second-hand, and without examination, from authorities who have not themselves examined the questions at issue, but have taken them at second-had from other non-examiners, whose opinions about them were not worth a brass farthing.” Mark Twain
A little scepticism allowed within the party is very healthy.
That's all it takes. It's not even beyond the capabilities of a member of another political party. But I haven't seen a Republican presidential candidate with this capability since Goldwater.
Just remember that he was the man who promised Russia that the World Bank and IMF would come to their aid if they instituted the reforms he talked them into and then was shocked when Clinton and the economic boys abandoned him.
I want to believe. I hope that alot was accomplished, but as Mr. Sachs has found out himself, you can lay your neck on the line and think it is going one way when the rug can be pulled out from underneath you. He himself experienced that with President Clinton. I hope the same thing does not happen to us.
I just hope that Jeffrey Sachs is right.
They're saying, he's not afraid, he's not angry, he's not arrogant, he's not mean, he isn't scary...Oh my gawd, he's real and he listens, glory be.
They were all breathing a sigh of relief you could feel clear across the ocean.
Obama is on overload with political capital right now. His budget passed the house here.
His Atty Gen has been heard from, albeit in the little case on Stevens. Maybe Holder will come out and tell us his office is ready to take on something serious. He had time to pour over the pages on Stevens when there are huge cases that are screaming for attention? ...come on Eric Holder.
LBJ was a political hack; Nixon was paranoid; Ford a bumbling f00l; Carter a misplaced idealist and weakling; Reagan was a reactionary entering senility; Bush 41 a dweeb; Clinton a dilettante; and Dubya was, well Dubya.
Intelligence, combined with sincerity, humility, and a genuine liking for his fellow man. Obama may well go down as the greatest president in US history. Only time will tell, but no one - except a Repub Kool-Aid drinker - can argue that he is off to a great start under the worst of circumstances.
Obama put together an economic team comprised of all the economic people that you disparage.
When did Paul Voclker pull the rug out from Jimmy Carter in favor of the banks instead of the people - 1979
Who has Lawrence Summers worked for?
Timothy Geithner?
The list could go on and on.
Was George Bush really in charge? Who was behind him?
No one disputes Obama's intelligence. At least I don't think anyone should.
It is ok to question his appointments, and where his intelligence is taking us and if we are really seeing any change, is it not?
Do I have to be an Obama fundamentalist to remain in the party?
Is there a new rule of Democratic orthodoxy?
"Orthodoxy means not thinking — not needing to think. Orthodoxy is unconsciousness." - George Orwell, 1984
I am still in shock that they could dare to report such fabrications!.