Wednesday, April 1, 2009

More Reading on the G-20 Summit

A couple of days ago I was moved to write something caustic about the upcoming G-20 summit and the idea that our deluded political elites could come up with anything substantial to deal with the economic crisis.

Since that time, I've read Walden Bello and Marc Lee on the subject. Neither of them are optimistic either.

The Group of 20 (G20) is making a big show of getting together to come to grips with the global economic crisis. But here's the problem with the upcoming summit in London on April 2: It's all show. What the show masks is a very deep worry and fear among the global elite that it really doesn't know the direction in which the world economy is heading and the measures needed to stabilize it.

A draft of the final G-20 communiqué leaked to Financial Times reinforces my view that the consensus agreement will fall short of what is needed given the seriousness of the economic crisis.
The major shortcoming of this G-20 meeting will almost certainly be the lack of commitment to an aggressive and coordinated approach to fiscal stimulus. It doesn’t look like the IMF 2% of GDP target will be part of the agreement. Most major industrialized countries including Canada have fallen short of the target. Canada is singled out by the OECD as one of the countries that can afford to do more, but is unlikely to do so.
The inadequate international fiscal stimulus response to date misreads the seriousness of the crisis. The priority now is for Governments to act together immediately to aggressively pursue expansionary monetary and fiscal policies.

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