As world leaders convene in Pittsburgh for the G20 summit Thursday and Friday, the shadow of the global financial crisis looms over the proceedings. Discussion is certain to revolve around new measures to prevent a future meltdown. Accordingly, pundits offer suggestions on what should and should not be among the participants' main concerns.
- Increase World Trade Fearing the worst, famed British Econ professor Simon J Evenett, calls upon the G20 nations to halt the "trade-distorting" protectionist measures that have been in place since last November. Citing negative effects, including harming trade partners and sectors of members' own economies, Evenett advises that the G20 cancel these measures and implement periodic reviews to ensure they do not return. Christopher Swann of Reuters argues that the summit is more likely to benefit world trade: "Self-interest is providing a strong tailwind behind the current talks," he writes, especially among nations with high export rates like China and Germany. Swann predicts that such nations will actually be eager to expand trade to make up the for the shortfall of consumer purchasing during and following the recession. Over at the Cato Institute, Daniel J. Ikenson and Alec van Gelder also hope that the G20 members seize the opportunity to further cement the achievements of neoliberal economics: "The only real stimulus the global economy needs is to continue the reforms that have guided the past 30 years of unprecedented global expansion: reduce trade barriers and remove the regulations and administrative burdens that prevent people from maximizing their potential in the global economy."
- Forget Rebalancing Growth Reacting to an article in the Wall Street Journal, former IMF Chief Economist and current MIT Professor Simon Johnson angrily denounces the U.S. proposal for sustainable and balanced global economic growth as "pointless rhetoric." He concedes that "big current account imbalances are not a good thing and should be on some list of problems to address." However, he believes the G20 should work to achieve higher-priority goals, including "much tougher financial regulation, substantially raising capital standards, workable cross-border rules for handling failed banks, a timetable for downsizing our biggest banks, how credit rating agencies are paid, and reforming – top to bottom – financial sector compensation." Economist's View blogger Tim Duy mostly agrees, except when it comes to stabilizing currency: "As an aside, the intervention to support the Dollar was also the key event that allowed the US recession to evolve in the pattern envisions by domestic-focused economists, as opposed to those seeped in the traditions of international finance."
- Reform Wall Street advises Steven Hill in his Guardian commentary. As the epicenter of the global financial crisis. the American financial industry is an understandable concern of the G20. Hill accuses the Obama administration of "dragging its feet" on popular ideas already in effect in Europe, including capping executive pay and linking banker pay to long-term performance. Informed Comment's Juan Cole is on the same page, but blames the U.S. Senate for the shortfall: "[Obama] would have wanted to be a leader in reforming the global finance system away from barricuda laissez-faire and ever more unequal distribution of national incomes. Regulatory reform could have come from several directions, but, again, the Senate could and should have been one of them. It hasn't been."
- Nothing Really Matters contends a resigned Michael Goldfarb. The long-time British journalist recalls his conversation with two young financial agents before the last G20 summit, finding himself agreeing with their contention that any summit resolutions will ultimately amount to little in the face of much more powerful corporate interests. He concludes that modern political summits are fatally flawed: "Locally elected politicians who can be thrown out of office at any time have no hope of solving global problems that have arisen outside the framework of politically stable societies. These shows of authority — for that is all modern summitry is — have grown so hollow that they fool very few people into thinking that they can be effective." Fortune's Stanley Bing doesn't expect much either, but he offers a hilarious guide to understanding the G20.
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