Making the G20 Mean Something
The idea of a G-20 summit is a good idea. Relative to other, more established international institutions, it’s a better set of countries to tackle the world’s overarching need to get on track to a pattern of growth and prosperity that’s sustainable for the long haul. But nobody’s actually expecting anything incredibly useful to come out of this week’s meetings. The world would, however, be a better place with a high-functioning G20 and this CAP report recommends some ways we could make that a reality.
Ultimately, however, in economic terms the world is suffering not just from a lack of institutions but from something of a leadership gap. The United States is a major economic player. But the economic realm isn’t like the military realm where we have a hegemonic position. By some measures, the European Central Bank actually presides over a larger economic unit than does the Federal Reserve and by all measures the European Union as a whole is bigger than the United States. Then beyond the two economic superpowers, there are a number of other really major players. That means the world really can’t just assume the U.S. is going to pull a rabbit out of a hat and put everything back together. But at the moment, nobody else seems especially interested in stepping up.
13 Responses to “Making the G20 Mean Something”
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March 31st, 2009 at 5:54 pm
Then beyond the two economic superpowers, there are a number of other really major players. That means the world really can’t just assume the U.S. is going to pull a rabbit out of a hat and put everything back together. But at the moment, nobody else seems especially interested in stepping up.
Europe has been sucking on America’s teat for more than half a century. Why stop now?
March 31st, 2009 at 6:03 pm
I heard a rumor that bankers weren’t allowed at the summit (from a French woman watching the news).
March 31st, 2009 at 6:28 pm
Correction: They’ve been urged to keep quiet.
March 31st, 2009 at 6:51 pm
By some measures, the European Central Bank actually presides over a larger economic unit than does the Federal Reserve and by all measures the European Union as a whole is bigger than the United States.
Land Area (sq miles)
EU – 1.6 million
USA – 3.7 million
March 31st, 2009 at 7:01 pm
George Soros says this G20 meeting is do or die.
March 31st, 2009 at 10:31 pm
although the EU may be a bigger economic unit in many respects, it isn’t nearly as cohesive. it’s members are burdened by internal squabbles over industry subsidies, the lack of an overarching tax policy, and limited uniformity in the financial sector.
given these factors, i think there’s still room for the US to take a leadership position, albeit a relatively diminished one vis a vis previous years. but success will require both humility and ingenuity.
April 1st, 2009 at 8:15 am
The G-20 is a useless photo-op where world leaders get together, shake hands, and pretend to care about each other. Ultimately every country is in this alone. We should independently make the hard decisions needed to deal with our structural problems.
April 1st, 2009 at 9:19 am
I am not sure if a large fiscal stimulus is, fundamentally, in the European interest. While the United States is able to borrow at near-zero interest rates, no other nation except for Germany can do so. And while the United States fiscal position will not be ploughed into debt servicing purgatory under any circumstance, any wild action on the part of Berlin will most certainly cause deterioration of German credit worthiness. If Germany sticks it out, it will be in a lot stronger position, where the United States, relatively, will be in a weaker one.
Frankly, the United Kingdom is acting against its own interests with the stimuli. Given the nature of its economy, which is essentially one of international transactional nature, any sort of domestic stimuli are bound to be useless, and it’s not likely they will engage in any more of these. The Governor of BoE, Mervyn King, essentially took the credit away from the PM Gordon Brown when he said that the fiscal position disallows further fiscal expansion.
The fundamental position of the U.K. is, however, also one where they would be wiser to engage in fiscal rectitude. It doesn’t have its own Florida; that’s in Spain. Another thing is quite simple; the decline of the pound as a reputable hard currency, with its fall of more than a quarter against the dollar recently, is bound to impact the long-term outlook of British economy, dependent on large financial and transactional firms, more than any sort of recession. The worst periods for the U.K. were in the late 70’s when government credit worthiness was in disarray and the pound became a joke currency; vis-a-vis the United States, it would be much wiser if it just kept to itself, shored up its fiscal position, and ignored the Americans.
April 1st, 2009 at 11:10 am
Does this mean that the G-8 will not be meeting this year?
April 1st, 2009 at 11:10 am
Does this mean that the G-8 will not be meeting this year?
April 9th, 2009 at 2:24 am
The style of writing is quite familiar to me. Have you written guest posts for other bloggers?
April 9th, 2009 at 3:56 pm
FANTASTIC!
April 15th, 2009 at 11:46 am
The style of writing is quite familiar to me. Did you write guest posts for other bloggers?