Ignore The Backslapping

How world leaders missed the boat in London.

By Rana Foroohar | Newsweek Web Exclusive

Apr 3, 2009

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The look on the faces of the world leaders above says it all: "Thank God we made it through this thing without a complete blowup." That's not good.

There's good reason for the looks of relief. Earlier this week, I was pretty sure that the G20 was going to end in serious disappointment, if not disaster. Czech Prime Minister Mirek Topolanek had set the stage by declaring the Obama administration's recent stimulus efforts "the road to hell," not exactly paving the way for transatlantic undertakings around the financial crisis. French President Nicolas Sarkozy followed up Thursday at the summit itself by baiting and badgering Chinese President Hu Jintao on the relatively minor issue of tax havens (and emblem, he said, of disfunctional "Anglo-Saxon" capitalism). He didn't go quite so far as to blame it all on "white, blue-eyed bankers" as Brazilian president Luiz Ignácio Lula de Silva had, but all the rawness and venom still threatened to derail any real cooperation around the big-tent issue—how to pull the global economy out of its death spiral. (Article continued below...)

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G20 Leaders Pledge Global Rescue

In fact, there were a number of agreements made, and President Obama was in the middle of most of them. Obama got the tax issue out of the way by doing some front-room brokering with Hu and Sarkozy, very smartly pulling them aside in full view of the plenary to cut a deal for more tax disclosure. He also scored big with the developing world leaders by proclaiming that the U.S. exercises its leadership best "when we listen … and show humility."

The big headline, of course, was world leaders' pledge to put together a $1.1 trillion package of measures to boost the global economy, including more cash and a new pool of drawing rights for the International Monetary Fund, more support for trade finance, and a lot more development aid to poor nations. British Prime Minister Gordon Brown, clearly thrilled and relieved that things didn't fall into complete chaos on his watch, declared the advent of a "new world order." Not quite.

The good news: that is a lot better than a trade war sparked by protectionism leading to the Great Depression, which is what happened the last time world leaders got together to powwow over an economic crisis of this magnitude. The bad news: all the good will and stimulus in the world is not going to save us.

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Posted By: memo2 @ 04/20/2009 11:55:44 AM

Mr:RO you did part of the home work at Wikipedia, but we still blame Mr:Carter he was advice to NO rise the USA Dolar,then Most Country's from the South all the way to Europe pass for the recesion they selfs Argentina was the first to go down some other Country's just can't pay their Interest to USA then new policies in the Economic era 1981 including the deregulation as you call, if at that time this people just maintain the rules probable nothing happen's right now but no this people want more and more they break the rules not us,then President after President just play with this Economic Situation do you know why in Europe they was forced to change their money for the Euro Dolar ? probable not if we was doing so good what happen to us to be at this Situation ? !.........
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Posted By: paulie2285 @ 04/11/2009 2:19:03 AM

This article in my opinion, has a serious issue with American dominance in the world's economy. In fact, the writer is obviously pro-Chinese. While it is true my government, the United States government is spending far more then it probably should, and my government need to start raising taxes while making the tough choices to reign in entitlement costs, is it a bad thing that the US has the world's largest economy? No. It just says that our country has worked really hard in the past and if we make some tough, but necessary choices now, we will be the world's largest economy in the future.
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Posted By: RO in Reno @ 04/07/2009 11:39:26 PM

Well Ok heres the first of the Wikipedia page on Reagan.
"As president, Reagan implemented bold new political and economic initiatives. His supply-side economic policies, dubbed "Reaganomics," included deregulation and substantial tax cuts implemented in 1981."

And just as an aside it was Reagan who removed the regulations on the Social Security funds, making them available to the general account with nothing more than an IOU, Social security is now in trouble because some 38billion dollars has "disappeared into whatever and the IOUs seem to be missing..
But the fact is Reagan is the Father of trickle down economics, He believed that America was better served if all the wealth was in a few hands, and that as we all know is a smasing success.
Keep in mind GHW Bush was the VP and GW Bush simply took Reaganomics to a new level.
So you can quit blaming Carter for everything that has gone wrong in the last 30 years. He after all inherited a god awful economy from Nixon wht it's double digit inflation, 21% interest rates Wage and price controls, buying fuel on odd or even days based on your licence plate number, while he opened the door to China.
The tripling of homeless was due to a law suit?? where in the hell did you get that? The number of homless tripled because Reagans unemployment levels were even higher than now.