if you want a quick summary of the results of the G-20 conference, it follows.
I disagree with their ratings, as seen below. Unlike them, I evaluate
the conference from a clear point of view: did the conference serve
_its own_ collective goals, i.e., of moderating the world collapse,
helping to save capitalism's bacon? a higher score means a shorter
slump, all else constant.
Note that I am not evaluating the conference from a Marxian (i.e.
working-class) perspective, though that could be done. In a purely
short-term perspective, the capitalist class view and the
working-class view are currently pretty much in sync, since the
short-term working class goal nowadays is only "jobs, jobs, jobs." A
longer-term view would involve abolishing the capitalist exploitation,
domination, and alienation of the working class.
Of course, even with my limited form of evaluation, the questions
asked bias the answers.
New York TIMES / DealBook - A Financial News Service of The New York Times
April 3, 2009, 7:16 am
For G-20, 7 Out of 10 Isn’t Bad
The G-20 deserves a mark of seven out of 10, according to
Breakingviews. While the London summit meeting, which concluded
Thursday, hasn’t solved everything, it has made important strides in
both battling the current crisis and preventing future ones, the
publication says.
Breakingviews arrived at its score by grading the world’s leaders on
the top 10 issues the G-20 faced. Each issue was scored with a zero,
half a point or a whole point. But note that this is not a finely
calibrated exercise. Zero doesn’t mean the G-20 achieved absolutely
nothing; equally, a whole point doesn’t mean perfection.
1. Fiscal stimulus: The free-spending Anglo-Saxons retreated from a
plan for even higher deficits under pressure from continental European
nations led by Angela Merkel of Germany. Even President Obama and
Prime Minister Gordon Brown of Britain realized that a policy of
borrowing and spending has its limits. A good result. (1 point)
[I'd say this is a zero, since what's needed is for as many countries
as possible to engage in expansionary fiscal policy.]
2. Making banks healthy: The G-20 nations say they are committed to
getting toxic assets off bank balance sheets. But the United States
plan is still only a half-plan, and much of continental Europe seems
in denial. Meanwhile, the deep recession may be making the problems
worse. ( 1/2 point)
[I'd give this a zero too, since half a plan isn't worth anything.
Geithner's "cash for trash" is the wrong plan. ]
3. Trade imbalances: Few changes would do more to improve the world’s
long-term financial health than reducing excessive trade deficits and
surpluses. The United States and Britain’s deficits are too large, as
are the Chinese and German surpluses. But the leaders could barely
manage to pay lip service to this problem. (0 points)
[agreed: zero]
4. Fighting protectionism: The talk was excellent. Everyone is in
favor of low trade barriers for other countries. But a tangible
commitment to roll back some of the latest home-market-first laws and
rules, like the Buy America provision in Mr. Obama’s stimulus
legislation, would have been welcome. ( 1/2 point)
[I don't think the "Buy American" provision amounts to much, so I'd
give the G-20 a one on this.]
5. Increasing the International Monetary Fund: The promise to give an
extra $500 billion to the I.M.F. should help soften the blow on
emerging markets. But the multinational bank has yet to show it can
disburse the additional money quickly and wisely. ( 1/2 point)
[the fact that the IMF is still pushing marketization at any cost says
that this might be a zero. But let's give the G-20 a 1/2.]
6. Trade finance: An agreement to make $250 billion available for
trade credit addresses one of the most important and most suffering
sectors. World trade is plummeting partly because exporters cannot get
guarantees that they will be paid. Assuming the money comes through,
the poor who need it most will get valuable help. (1 point)
[agreed: 1 point.]
7. Preventing financial crises: The G-20 expressed a strong commitment
to stop future bubbles. The authorities will watch the growth of
credit and stamp on it. They will also regulate financial institutions
more intensively so they don’t run amok. There is a move toward more
regulation of hedge funds but it does not appear too heavy-handed. In
the future, the banking world will be smaller, safer and duller. Not
bad at all. (1 point)
[I don't think the actual implementation will be strong at all, since
it will be opposed tooth and nail by the financial nabobs. I'd give
the G-20 a 1/2 on this one.]
8. Tax havens: These really had nothing to do with the current crisis.
But a crackdown on tax havens is still welcome, particularly because
governments are going to need every cent they can get in future years
to fill their budgetary chasms. (1 point)
[since this has nothing to do with the crisis, I'm ignoring it.]
9. Confidence: An acrimonious conference would have shaken consumers,
businesses, investors and bankers. Despite childish threats of a
walkout by Nicolas Sarkozy, the French president, concord was
maintained. The united front may help confidence, and that is critical
to economic recovery. (1 point)
[this only works if the rest of the plan works, so I'd give the G-20 a 1/2.]
10. Exit strategy: If inflation is to be avoided and government
borrowing isn’t going to explode, the authorities need to move from
stimulation to applying the brakes almost as soon as economies start
to recover. The G-20 talked the talk on this. But investors will
remain skeptical until they walk the walk. ( 1/2 point)
[again, omit this one.]
All in all, Breakingviews says, across 10 issues the G-20 summit
scored seven points. That’s really not a bad achievement. But, the
publication says, there remains a huge amount of work to do. The
global economy is still extremely fragile. The world’s leaders should
not rest on their laurels, it warns.
* Copyright 2009 The New York Times Company
[Breakingviews gives the G-20 a 70%, which is pretty much the same as
what they get if we drop the 2 that I dropped (68.8%). On the other
hand, I give the G-20 a 3.5 out of 8, which is 43.8%.]
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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