international intrigue

What Actually Got Done at the G20?

Clearly, the most important part of President Obama’s trip to London was his meeting with the Queen — the brief touching, the iPod, Prince Philip’s racist joke, and all that. But while he was in the area, Obama figured he might as well also check out this meeting taking place among the world’s twenty largest economic powers. So how did that go? Well, despite sometimes conflicting priorities and agendas, the group was able to agree on providing $1.1 trillion to the International Monetary Fund, the World Bank, and other institutions, which should help developing economies the most. They also took steps to crack down on hedge funds and other financial players, as well as tax havens, though not too much for the Anglo-American alliance’s free-market sensibilities. But do these measures amount to a successful summit, or did the world’s leaders fall short of what was needed?

• Felix Salmon says that “the G20 did what they could — which of necessity will have more impact on smaller nations reliant on IMF bailouts than it will on huge economies like that of the US.” But a trillion dollars is “still a serious amount of money.” Still, it’s “disheartening” that the U.S. is resisting efforts at international regulation, because “US regulatory agencies all failed miserably when it came to preventing or mitigating the effects of this crisis.” [Market Movers/Portfolio]

• The Wall Street Journal editorial board claims that beyond the trillion dollars, “the loudest sound from the group’s communique was that of 20 hands mutually patting each other’s backs for a job well done.” The “meeting ended as a reality check,” with leaders recognizing “that even they are mere mortals and the real work of economic recovery will have to resume when their planes touch down back home.” [WSJ]

• Paul Krugman was pleasantly surprised because, “realistically, most big-time international meetings produce nothing; this did something significant.” [Conscience of a Liberal/NYT]

• The New York Times editorial board says “the world’s top 20 economic powers had an urgent responsibility to come up with concrete policies to fix the global financial system and restore growth,” but “fell short.” Most concerning “was their refusal to commit to spend the hundreds of billions of dollars in additional fiscal stimulus that the world economy needs to pull out of its frighteningly steep dive.” [NYT]

• The Los Angeles Times editorial board believes the $1.1 trillion in financial support for developing nations “could help this country’s economy by enabling poorer nations to buy more goods.” They also believe Obama was right to resist an international regulatory system, as “a one-size-fits-all approach to regulating the vastly different financial systems in each country does not” make sense. [LAT]

• Jeffrey Sachs claims the “G-20 came through” with results that “were beyond what most, including myself, expected.” The $1.1 trillion “will certainly be helpful for many economies, especially emerging-market economies suffering from an intense credit squeeze.” Even so, “the G20 actions will certainly not stop the recession in its tracks, nor even prevent unemployment from continuing to rise markedly.” [HuffPo]

• Barron YoungSmith notes that “Obama didn’t get anything he wanted” on fiscal stimulus, but he won out on international financial regulation, getting “exactly what he came for, while managing to convince Nicolas Sarkozy that ‘France and Germany’s priority’ had been achieved.” [New Republic]

• Kevin Drum contends that the trillion-dollar “number could have been higher, and probably should have been higher, but reality being what it is, that’s not bad.” [Mother Jones]

• Mark Thoma finds mixed results, but compared to past summits, “getting anything done at all” is a success. The failure to achieve an international stimulus package was “a disappointing outcome,” with other countries taking the attitude “that the US caused the problem and it is up to them to fix it.” [Guardian UK]

• Kerry Capell and Stanley Reed write that the summit “did not achieve everything its organizers originally hoped for, but it was not without substance.” More important than the $1.1 trillion was “a set of principles that may mark the beginning of a new global financial architecture that will exercise more control over hedge funds, derivatives, and even traders’ bonuses, while at the same time turning the screws on tax havens.” [Business Week]

• Peter Gumbel and Catherine Mayer point out that a large number of participants tried “to lay claim to its outcome,” which is one measure of the summit’s success. [Time]

What Actually Got Done at the G20?