The Current Discussion: Rate Obama's first performance on the international stage on a scale of 1-10, and tell us why you think so.
Mr. Obama ought to be assigned a grade of six out of ten for his smiling performance at the G-20 meeting in London. He proved he could keep his word and be a good listener. He appears to have taken up the challenge of being humble mechanic and accident supervisor after a massive road pileup with many (unsold) cars, trucks, unemployed bodies and goods are either bound for the scrap heap, intellectually challenged schemes, unemployment or trauma about complex insurance policies (the AIG and government guaranty varieties) or more sacrifices. It was in such atmosphere that Mr. Obama and 19 other leaders gathered to formulate an action plan, come up with at least 21 different opinions and ideas and a heap of other suggestions about the equivalent of installing seatbelts, airbags, anti-lock brakes and traffic signs on such road. Alas, they all gingerly avoided the other massive train wreck, the environment. Mother nature does not offer bailouts.
This G-20 gathering circumvented tough issues. They did not act as the T-20 (as board of trustees for the world economy). The meeting focused on “good old ways” that got us all to this point and place in history. Throwing good money after bad, via the IMF, is the psychosis of a gambler betting on tested odds. However, the increased IMF funding was welcomed news to the host, Gordon Brown, who as Tony Blair’s Chancellor of the Exchequer presided over a decade of explosion in the U.K. banking sector (and exposure) to a size larger than the entire UK GDP. On the Friday before the meeting, the bond auction of HM Treasury failed to find demand. Many experts predict that, once again, the UK will approach the IMF, as it did in 1974 with hat in hand, for a jumbo loan to hold it over. That is probably one of the back room deals on the quiet, but it would be inconceivable if it was not discussed by Brown and Obama. America’s best friend in Europe is badly in need of assistance. Other developed economies (Iceland, Ireland and potentially Austria and Belgium) will probably join the queue at the IMF window, as Mexico, Central and Eastern European, Ukraine, South East Asian nations and Pakistan are waiting in the lounge.
Many topics were circumvented at the London Summit and that was deemed expedient by Mr. Obama. Foreign leaders tried to alternate between mitigation of immediate bleeding and read into the mind of Mr. Obama, the apprentice crafter of foreign policy, just as the paroled Bill Clinton during his first round of visits to Europe. Free trade was affirmed as a common principle, but the environment was shoved to the backburner. And the crucial question, or “change we can believe in” from American side, the sum and substance of it all was not addressed in good enough detail: how could a stable financial system, an integrated, but lightly regulated supra-national, financial system in search of forum shopping and national financial autonomy could be compatible or sustainable in a global system? Especially without a commonly defined early warning system? And what happens to so-called classic economic theories, when two-thirds of world producers exceed sermons of IMF on overall debt limit vs. total GDP and expect relatively small economies (Russia, China) to rescue Europe and U.S.A.?
The quick rounds of political posturing, in 20-minute installments, are not exactly the stuff of assessable political performance. It was just a preamble and a feeler meeting over lunch. Mr. Obama is preoccupied with volatility back home, at the end of his first quarter on the job. The ranks of unemployed Americans are expanding at the rate of about 33,000 people every workday and pressure is building up. As such, the novice earns the middle grade of five plus extra credit for posturing towards being a consensus builder and a listener. He might not be well set to tame the politico-socio-economic monster that is looking at him squarely in the face, and perhaps he needs more than a smile to deal with it.
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