Friday, November 12, 2010

G20 Summit no Summit at all! Just More Anti-American Economics as Usual.+

It's been a total failure so far for the president at the G20 conference. Not one major thing we tried to get went beyond the presidents talk. The G20 has become a group that is controlled by China and others working against the interests of America. That is not a good development for us and unless something changes it will only get worse. China and Germany in particular will still go on keeping their currency under valued by unfair and improper methods. And Germany is continuing to stimulate it's local economy in an unfair manor. While we here in the states are left unemployed and a struggling economy. This conference may well, as this article states, be the final conference we had any chance to stop such actions.

Amplify’d from

G20 summit: Seoul survivors

The summit communiqué is full of good intentions but the bottom line is that China has not backed down

It is tempting to treat the G20 meeting in South Korea as the "so-what" summit. Lots of leaders had lots of talks in Seoul. But they reached precious few enforceable agreements at the end of them. So what? Yet this was less the so-what than the Sherlock Holmes summit. In the detective story, the significant thing was the fact that the dog did not bark in the night.

By the same token, the big story from Seoul is that there was no big story. If there had been, as in many ways there should have been, that story would have been that the United States had successfully forced the Chinese and Germans to stimulate their domestic economies and compelled the Chinese to revalue the yuan upwards to help US exporters.

Yet this did not happen. The summit communiqué is full of good intentions, expressions of co-operation and agreements to make future agreements. But the bottom line is that China has not backed down. If you seek a symbolic moment when the United States ceased to command the 21st-century world and ceded its place to the Asian century, this week in Seoul was arguably that moment.

Reflexive anti-Americans will doubtless celebrate this. But they should be very careful what they wish for. The awkward truth is that in Seoul the United States was making the right arguments about the need to prevent trade imbalances getting out of control and was correct to criticise China and Germany for their big current account surpluses based on exports to the rest. A situation in which the surplus nations rely for growth on the rest of the world rather than on domestic demand, and then lend the creditor countries money to buy their exports, is a dysfunctional one. The political problem is that the US, as the principal shaper and owner of the postwar economic order, is not now in a position to win the argument from a new position of relative weakness.

For there to have been no mention of undervalued currencies or trade imbalances would have been a real slap in the face for the US. But the words in the communiqué, which concede a commitment by China to "move toward" more market-determined exchange rates and a pledge to pursue polices "conducive to reducing excessive imbalances", fall well short of the kind of bankable assurances that America sought. Though Barack Obama can tout the G20's opposition to competitive devaluations and its commitment to drawing up "indicative guidelines" on the necessary correctives against large imbalances as US gains, these are effectively negated by the capacious Chinese get-out which allows G20 members to "take into account national or regional circumstances". So the message from Beijing to Washington is very clear: don't call us – we'll call you.

The agreement on a so-called "Seoul consensus" on restructuring the International Monetary Fund is also more apparent than real. But the sensitivity of the negotiations on this point shows just how much symbolic significance was attached to it on all sides. As a step in the process of replacing the Washington consensus of strict monetary controls and private-sector led recovery, Seoul was a big summit. But the end of a period of US dominance may mark the start of a period of national and regional indecision that makes solutions to the world's economic woes more elusive than ever.


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