Archive for the ‘G20’ Category

Can Obama Reverse Early Losses in Europe?

March 28, 2009

For many Europeans, he had them at hello.  But over the past few months, European leaders have become less enamored with Baraco Obama…

Can he win them back as he starts his trip next week?

Last summer in Europe: the people were at his feet.  Now?


By Toby Harnden
The Telegraph (UK)

When he visited Europe last July, Barack Obama, the Democratic presidential candidate, stood before 200,000 in Berlin’s Tiergarten park to declare his “global citizenship” and call on the “people of the world” to “come together to save this planet”. It was heady stuff, and the rapturous reception was one befitting a new political messiah after eight wilderness years. Back in the United States, the young senator ended his stump speeches with a vow to “change the world”. Americans craved affection from abroad. Europeans were eager to fall in love.

But that was eight months ago, and the innocence of that summer has started to evaporate. Mr Obama has become the first black man to occupy the White House, but the world is in the grip of the worst economic depression since the Thirties, with no path back to prosperity in sight.
While the troop surge in Iraq that Mr Obama so vehemently opposed has succeeded beyond his imaginings, the “good war” he championed in Afghanistan is spiralling downwards and there are dark mutterings on the Left about it becoming his Vietnam.

For all the mutual goodwill, the transatlantic policy battle-lines are drawn. The Americans want additional economic stimulus measures to be taken across the globe. The Europeans are preoccupied with a supra-national financial regulation structure.

Mr Obama’s demands for more European boots on the ground in Afghanistan have already been rejected by the French and Germans.

As the new American commander-in-chief embarks on his first extended foreign trip in Air Force One, stopping in London for the G20 summit, Strasbourg for a gathering of Nato, and going on to Prague, Ankara and Istanbul, the sheen is already wearing off his shiny new presidency at home.

The leak-proof, supremely well-organised campaign and the post-election transition that was hailed as being one of the smoothest in history are over. They have given way to an at times stumbling administration that struggles to fill the cabinet, botches its message and has all but abandoned the bipartisanship candidate Mr Obama promised.

US bank chiefs to meet with President Obama

Far from changing the world, Mr Obama has barely looked over his shoulder at it

Far from changing the world, Mr Obama has barely looked over his shoulder at it. The person he has entrusted his foreign policy to is Hillary Clinton, a bitter campaign rival whose diplomatic credentials he once mocked. To appoint her Secretary of State was perhaps an ominous sign, a move designed to keep her from challenging him domestically.

During his first, chaotic weeks in power, Mr Obama’s focus has been almost entirely domestic. Key diplomatic posts remain empty. No ambassador is in place in London or Paris. Gus O’Donnell, the Cabinet Secretary, has grumbled that it has been almost impossible to organise next week’s G20 summit in Docklands because White House officials are missing in action. “There is nobody there,” he says. “You cannot believe how difficult it is.”

Obama was elected as the “unBush”, and his image of being everything his Texan predecessor wasn’t has given him stratospheric popularity ratings overseas that still endure. When he took office, a Financial Times/Harris poll found that 68 per cent of Americans believed he would have a “positive impact on the course of international events”. In France, this figure was 92 per cent, in Italy 90 per cent, Spain 85 per cent and Britain – where perhaps some saw echoes of the Tony Blair in 1997 who went on to dash so many hopes – 77 per cent.

During his more multilateral second term, George W. Bush went some way to rebuilding fractured transatlantic ties. But recognition of this did not penetrate much deeper than the level of his fellow world leaders and the political classes. Ordinary Europeans remained intensely sceptical.

The reverse was true with Mr Obama. In the corridors of the Foreign Office and Quai D’Orsay, however, there is already some disappointment. Nile Gardiner, the director of the Margaret Thatcher Centre at the conservative Heritage Foundation in Washington, is a touch hyperbolic when he hazards that foreign governments now see the Obama administration as “poorly managed, ineffective, inept and extremely bad at getting its message across”. But there are significant rumblings of concern.

Gordon Brown’s visit to Washington earlier this month was a public relations fiasco. Minutes before his meeting with Mr Obama in the Oval Office, British officials were still negotiating details with reluctant White House aides.

Although Mr Obama spoke of the “special relationship”, he appeared supremely uninterested in Mr Brown and what he had to say. He did not echo the Prime Minister’s call for a “global new deal” on the economy. The usual pomp and ceremony was absent at the White House.

While the fuss over his present to Mr Brown of 25 DVDs of American movies that were rumoured to be incompatible with British DVD players was overblown, the blunder in protocol swiftly came to be viewed as the kind of crass ignorance more commonly – though often unfairly – associated with his predecessor.

When Mrs Clinton met Sergei Lavrov, the Russian foreign minister, in Geneva, she cheerily handed him a large red button in a yellow case, with the words “reset” and “peregruzka” written on it in Latin rather than Cyrillic script. It was a reference to the call from Joe Biden, the Vice-President, for a “resetting” of the US-Russian relationship.

“We worked hard to get the right Russian word. Do you think we got it?” Clinton asked.

“You got it wrong,” responded Lavrov, who informed her that “peregruzka” meant “overcharge”.

The schoolboy error had happened because the State Department’s cadre of Russian translators had been bypassed in favour of Mrs Clinton’s political team, who had turned to a Russian speaker who was not up to date with computer terminology.

Little of this will matter to ordinary Europeans, who view Mr Obama and his wife Michelle as a 21st-century version of the Kennedys. For Europeans, they symbolise everything America could be. “There’s a certain vicarious sentiment in Europe … Obama is so popular in part because they see the US as enjoying a multiculturalism they don’t have and won’t have for a long time,” says Charles Kupchan, a Council on Foreign Relations fellow and former senior Clinton administration official.

“Europeans still struggle with these issues and have done a much less impressive job in integrating minorities into the social mainstream, and that gives Obama enormous appeal just as a human being. I expect we shall see that outpouring when he is in Europe.”

This will be both an asset and a burden to Obama on his grand tour. For some in Europe, the reality of a President Obama may disappoint. “They may be naively surprised that Barack Obama is an American and not a European in drag,” says Mark Kirk, a Republican who is the only member of the House of Representatives to have served in Afghanistan.

Whatever their policy reservations, European leaders such as Nicolas Sarkozy and Angela Merkel are clamouring to bask in the reflected glory of the American president. Sarkozy worked assiduously to secure an extra stop in France for Mr Obama and was bitterly disappointed when the White House demurred, Strasbourg not withstanding.

If Mr Obama is skilful, he will use this to secure policy concessions. “He’s more popular than European presidents and prime ministers in their own countries,” says Kirk. “He’s saying the right things on diplomacy with Iran and climate change. There’s a danger for European leaders if they don’t give him what he’s asking for.”

And if he doesn’t, timing may be partly to blame. The G20 and Nato summits have come uncomfortably early for Mr Obama. In London, there will probably not be enough agreement on the global economy for much more than a vapid joint statement of common aims. It was only yesterday that Mr Obama announced the results of his own internal review of Afghanistan and Pakistan policy – leaving little time to twist the arms of Nato allies.

The symbolism of Mr Obama addressing the Islamic world from Turkey, a Muslim country at the intersection of Europe and Asia, will be undeniably powerful. Whether his first major overseas trip will mark the moment Mr Obama matures from a personification of American possibility into a global leader who can take tough choices and secure concrete results remains an open question.

Global Recession, Security Challenges Test Obama’s Popularity Among World Leaders

Obama’s end of the beginning and possibly the beginning of the end

March 27, 2009

Today the President of the Uited States said, “the safety of people around the world is at stake,” in Afghanistan and Pakistan.

Most of the world yawned.

Next week the president will be in Europe for contentious G20 meetings and then on to a NATO conference.  He should take all his white water rafting knowledge with him.  Despite the unual ulta-polite European ways: Obama cannot expect any huge long term committment from his NATO allies on Afgahnistan; and Pakistan is a sovereign nation that has problems to solve on their own, most European leaders think.

The U.S. has already been in Afghanistan for seven years and has struggled every step of the way to gain more help from European and other allies.  But the allies are now tired and much poorer than seven years ago.  Their focus is on the economic recovery and not much else.

President Obama will be the new guy next week.  He’s untested and he has a lot on his plate: much of it he put there himself.  Already China is wondering how Obama can possibly repay all his debt to do all his many projects.

But Obama has made it clear he will do everything at once: stimulus, new bank regulations, health care, education, environment, and energy.

His team will also be at at U.N. climate change event this next week — an event that should cause worry for most Americans.

U.N. ‘Climate Change’ Plan Would Likely Shift Trillions to Form New World Economy

Next week for Obama he is at the end of the beginning and possibly the beginning of the end.

London Protesters Threaten Bankers, Evoke Executions

Obama Has United Pakistani and Afghan Taliban


From Politico

The Obama administration fears getting bogged down in a bloody and inconclusive war in Afghanistan and Pakistan — but it also fears walking away from the region.

So its new strategy, which President Barack Obama announced Friday at the White House, is a careful middle course that seeks to avoid both of these unacceptable outcomes.

It keeps the U.S. committed but not too committed.

It doesn’t promise fast results or sweeping achievements, like defeating the Taliban insurgency or quickly bringing security to the Afghan people.

It seeks to draw allies into the effort but doesn’t greatly expand the U.S. footprint, though Obama will announce he is sending 4,000 more troops, several hundred civilian reconstruction experts, and $1.5 billion in additional economic aid to Pakistan.

And it will contain benchmarks that give Obama a chance to review the strategy at regular intervals to decide whether it is working.

The question that arises is whether in trying to keep the U.S. commitment limited, the White House is making it that much harder for the new strategy to work.

The main new U.S. goal is as constricted and clear-eyed as can be. It is to go after Osama bin Laden and the other remains of Al Qaeda hiding along the Afghan-Pakistan border region. Everything else will be secondary.

Read the rest:


Troops Under Fire In Afghanistan; Obama Hit By RPGs from Democratic Left


President Barack Obama’s Afghanistan proposal is under fire from the liberal base, which is becoming increasingly disappointed in his war policies.

Russ Feingold, the liberal and often defiant Wisconsin senator, said today that Obama’s plan “could make the situation worse, not better.”

Peace Action, a liberal anti-war organization, is organizing a coalition to petition Congress to oppose Obama’s Afghanistan plan.

“It’s a shame President Obama believes he can pursue the same militaristic strategy as his predecessors and produce a different result,” said Kevin Martin, executive director of Peace Action.

And Win Without War, another anti-war group, also slammed Obama.

“I regret that President Obama, in his desire to protect our nation from a genuine threat, has outlined a policy that will undermine our security, not enhance it,” said Tom Andrews, the organization’s executive director. “In short, the president’s policy is playing into the hands of Al Qaeda and the Taliban by providing them with a cause that unites and strengthens them.”

Read the rest:

 Do we want to revive our economy, or do we want to punish the bankers?

London Protesters Threaten Bankers, Evoke Executions

March 27, 2009

Mark Barrett, a professional tour guide, spent last Saturday painting Barack Obama’s election catchphrase “yes we can” on a banner that protesters will carry as they try to occupy London’s financial district April 1.

Barrett is helping organize a protest outside the Bank of England, one of several called to express anger against banks and bankers and mark the arrival in London of leaders of the Group of 20 nations — including Obama, now president.

By Thomas Penny and Brian Lysaght

“We want a very English revolution,” he says from a café near his home in north London. “The first English revolution in 1649 was about winning sovereignty for parliament over the king.” Now, protesters are campaigning for sovereignty for everyone.

All police leave has been canceled to increase security and financial workers have been told to wear casual clothes amid warnings that protests could turn violent.

“There are a lot of hacked-off people,” said Mike Bowron, commander of the City of London Police. “There’s potential for disruption and certain individual groups see violence as their raison d’etre.”

The global economic slump has raised unemployment to more than 2 million in the U.K., with more people joining jobless rolls last month than at any time since 1971. The economy shrank 1.6 percent in the fourth quarter, the most since 1980, and there is growing anger at the more than 40 billion pounds ($58 billion) the government has injected into ailing banks while insuring 585 billion pounds more in risky assets.

Beheading Charles I

Class War, an anarchist newspaper, has produced a special edition to promote the protest with an image of former Royal Bank of Scotland Group Plc CEO Fred Goodwin, whose house was vandalized this week, on a guillotine under the headline “Ready to Riot.” Another shows people dancing around a fire with the slogan “How to keep warm in the credit crunch — Burn a Banker!” Public anger erupted at Goodwin’s 703,000 pounds annual pension after RBS was bailed out by the government.

The English Revolution culminated with the beheading of Charles I in 1649, ending the so-called divine right of kings in England. Today’s protesters say they draw inspiration from 17th century radicalism.

Four marches will converge on the Bank of England at midday on April 1 for a protest the organizers call “Financial Fools Day.” At the same time, there are plans for a blockade of the European Climate Exchange, in Bishopsgate, to protest against the market in carbon emissions.

Clog Up the Roads

“There’s an avowed intention on their behalf on the 1st of April to stop the City either by just clogging up the roads and preventing people getting into work or, if they’re allowed to, getting into some of those institutions,” said Commander Bob Broadhurst of the Metropolitan Police, who is in charge of the policing operation.

“What we’re seeing is unprecedented planning amongst protest groups,” he told reporters on March 21. “There are some clever, innovative people with lots of ideas.”

Police, who are detailed to provide security for the world leaders attending the April 2 G20 summit at the Excel Conference Centre in east London, will also have to deal with a labor union-organized protest march to Hyde Park tomorrow, demonstrations at the conference center itself and an anti-war march on the U.S. Embassy.

Around 10,500 officers will be available during the week….

Read the rest:


 Anger, Lawlessness Fueling U.S., Global Economic Revolution?

Social Unrest: Hurt by Economy, Europeans Vent Their Anger

 Obama Buys Into Anger, Fear as Political Tool

A university professor who is organising a protest at next week’s G20 summit was suspended from his job after warning bankers could be “hanging from lampposts”, a spokesman said Friday.

University of East London professor of anthropology Chris Knight told the BBC that demonstrators would be “hanging a lot of people” during protests in London against the summit next Thursday.

“Professor Chris Knight has been suspended from his duties at the University of East London, pending investigation,” a university spokesman told AFP. “In order not to prejudice this process we cannot make any further comment.”

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Obama Buys Into Anger, Fear as Political Tool

March 27, 2009

There is a clear message being sent of “we’ll get this, or else.”

Radicals protesting  the G20 summit transmit the message clearly.

Even President Barack Obama has gently used veiled threats and insinuations that he’ll go to any lengths to get what he wants.

“We won” flies in the face of bipartisanship and comity.

When Obama made his “outrage” remarks about the AIG bonuses, that was quickly followed up by Rep. Barney Frank asking for the names of all the AIG bonus recipients.

Then ACORN showed up to protest at the homes of some of those same AIG people.

Yesterday, two Washington Post reporters said the President of the United States is “attempting to harness public anger over the financial crisis” to pass his budget.

Once or twice, the president has lamely, limply, really, tried to mimic FDR’s “nothing to fear but fear itself” speech; but more often than not, “No Drama Obama” has hinted at other emotions beyond calm.
Obama is banking that his strong poll numbers will translate into the public trust and confidence he’ll need to reform, some say overhaul, and some say radically attack the financial system and Wall Street.

But pollster Frank Luntz and others say although the public approves of Obama himself, they reject some of his policies.

Public anger as a political tool?  That’s been used before but rarely by the president.

And the use of fear by the President of the United States at this time is disconcerting at the least.  Americans have plenty of fear and anger already: after losing jobs, retirement funds, and homes.

What American need is trust.  But at a time when trust in Wall Street, bankers and others is at low ebb, the president is talking about fear, crisis, catastrophe, anger and “outrage.”

Laughing on Leno and “60 Minutes” was a lame attempt to blind the facts.

My imagination running amok?  Hardly.  In Scotland, protesters attacked a bank executive’s home and inflicted thousands of dollars of damage.  In Paris the protesters rioted, setting tires on fire in the streets frequented by tourists.  Around the world, the economic crisis is turning from simmering outrage to a boil of fear and violence.

The G20 will be something to watch: not just because of the usually boring diplomatic and financial talk.  This time there are real issues and differences and the future of the American and world banking systems could surely hang in the outcome.

But added to that is an atmosphere of fear and even violence: and that is not a good way to do business.

Anger, Lawlessness Fueling U.S., Global Economic Revolution?

Obama, Geithner, Summers Plan for “Toxic Assets” May be Toxic Itself

Obama’s public overexposure

Obama Still Thinks After Economy Recovers; Bank, Finance Good Times Can Return?

 Obama’s Economic “Rescue;” “The plan is very, very clever. Maybe too clever.”

Global Recession, Security Challenges Test Obama’s Popularity Among World Leaders

March 25, 2009

Only nine months ago, when he addressed an estimated 200,000 people in Germany, Barack Obama was heralded as “president of the world.”

But now that he’s president of the United States, the world doesn’t appear to be following up on its endorsement.

From France to Poland, from the Czech Republic to China, many nations are rebuffing the president and offering little wiggle room for him to negotiate economic and security policies.

Obama faces his first major international test next week when the world’s largest economies meet at the G20 summit in London.

“I think as the president heads to Europe, he faces a huge public relations disaster,” said Nile Gardiner, director of the conservative Heritage Foundation’s Margaret Thatcher Center for Freedom.

“Europe is increasingly turning against his massive spending plans, which most European leaders see as a destructive way to move forward for the global economy and will only add to a massive American debt burden,” Gardiner told 

“At the same time, there is a growing impression across Europe that the Obama administration is inept and inefficient and increasingly poorly managed.”

Last summer in Europe: the people were at his feet.  Now?

A top European Union politician on Wednesday slammed Obama’s plans for the U.S. to spend its way out of recession as “a way to hell.”

Czech Prime Minister Mirek Topolanek, who lost a confidence vote in his own parliament this week and whose country currently holds the EU presidency, told the European Parliament that Obama’s massive stimulus package and banking bailout “will undermine the stability of the global financial market.”

That followed concerns by Poland that the U.S., as a way to appease Russia, plans to bail out of a missile defense shield the Bush administration negotiated with Poland and the Czech Republic.

“Russian generals, and even the Russian president, still continues to threaten us with the deployment of medium-range missiles in our immediate vicinity,” Polish Foreign Minister Radoslaw Sikorski told Rep. Ellen Tauscher, D-Calif., in Brussels on Sunday. “So we signed with the previous administration. We patiently wait for the decision of the new administration and we hope we don’t regret our trust in the United States.”

Most European leaders favor tighter financial regulation, while the U.S. has been pushing for larger economic stimulus plans.

“We consider that in Europe we have already invested a lot for the recovery, and that the problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself,” French President Nicolas Sarkozy told a news conference in Berlin last week with German Chancellor Angela Merkel, rebuffing U.S. calls to spend more.

Read the rest from Fox:

Obama: Fire Geithner

March 15, 2009

If Treasury Secretary Tim Geithner is such a strong, competent, believable spokesman that gives everyone confidence in him, his economic plan, and the state of the U.S. economy: why is nobody believing?

Why is it that President Obama, Paul Volker, Larry Summer and others had to push the media “we are strong and confident line” these last few days.

How come, if Geither is so good, after he urged the G20 to “strong action” yesterday, in London mind you, a report of that speech couldn’t be found on page one of the London Times or the Telegraph?
Sen. Sherrod Brown, D- Ohio, pauses in the elevator after arriving on Capitol

Because Geither is not strong.  He’s worthless as a spokesman and advocate and that may make him worthless as a Treasury Secretary.

He needs a speech coach, a speech writer, a media advisor and body language lessons.


But maybe it is too late for all the remaking of Geithner.  Maybe we knew with his TurboTax lie that we were all in for trouble.

Geithner is apparently spineless, the Senate is mostly spineless for confirming him based upon false promises and lies; so who can we look to, in this time of “crisis,” with certainty and strength?

In times of economic weakness, the president’s own Treasury Secretary is weak.

US Treasury Secretary Timothy Geithner, seen at a press conference at the G20
AP Photo/Kirsty Wigglesworth

How much more slack does Barack Obama wish to give this guy and for what?

Obama can’t demonstrate strengh himself until he realizes what strength is and takes some strong action on something: and soon.

Obama: Stop Thinking About What Might Be Gained; Think What May Certainly Be Lost

Geithner Urges Europe to Strong Action

Even Joke Biden is doing better than Geithner….

Even Joe Biden, who has never been wrong on anything before, said a recent uptick in the stock markets is a result of the “Obama factor.”

 Obama, Biden Chat Up Economy; Congress Talking “Stimulus II”

 Biden Off Mic: “Gimme a f*&$#ing break”

Obama: Stop Thinking About What Might Be Gained; Think What May Certainly Be Lost

Obama, Geithner: recession requires global action

March 11, 2009

The emphasis on economic stimulus has already been met coolly by many European nations, raising questions whether a gathering of finance chiefs from the Group of 20 rich and developing economies near London this weekend will make much headway battling a deepening downturn.

Read the rest:


Warning that the global recession is deepening, the Obama administration on Wednesday called on major U.S. allies to do their part and support strong stimulus programs to fight the downturn.

The administration said decisive action was needed by all countries to complement what is being done in the United States. Treasury Secretary Timothy Geithner outlined an ambitious agenda, including a tenfold increase in the size of an emergency fund the International Monetary Fund uses to help countries in trouble to as much as $500 billion.

“We can do a really good job here at home, with a whole host of policies, but if you continue to see deterioration in the world economy, that’s going to set us back,” President Barack Obama said in the Oval Office following a briefing by Geithner.


It’s essential for other major countries to commit to substantial and sustained efforts to bolster their economies in the face of a deepening recession, Geithner later told reporters.

The U.S. challenge highlighted a rift with European nations who are balking at U.S. calls for more stimulus spending, arguing they do not want to pile up huge levels of debt. Some European critics have charged that the U.S. demand for increased stimulus spending was an effort to divert a European call for a major overhaul of regulations governing the financial system to curb the types of excesses in the U.S. that spawned the crisis.

Obama said the U.S. has two goals for the G-20 summit in April: to make sure there is “concerted action around the globe to jump-start the economy” and to achieve consensus on regulatory reform to take place in each country.

However, many European nations have been critical of U.S. calls for increased stimulus spending. At a meeting this week of finance ministers of the 27-nation European Union, officials said they were doing enough already to support the world economy.

Geithner sought to play down any disagreement between the U.S. and Europe.

“I think you will find very broad support to address these objectives,” he said. Geithner will attend talks Friday and Saturday in London with finance officials from the Group of 20 nations.

Those meetings are designed to develop a common agenda for a summit April 2 in London to be attended by Obama and the other leaders of G-20 countries, a group that includes not only the world’s wealthiest nations but also major developing countries such as China, India and Brazil.

Geithner said the U.S. will seek approval to expand a $50 billion fund the IMF maintains to support countries in trouble to as much as $500 billion. The IMF needs much greater resources to be able to provide emergency loans to countries during the current crisis, he said.

Read the rest:

Obama to Ignore European Effort; Push for Global Stimulus at G20

March 9, 2009

The U.S. will press world leaders to boost emergency government spending to lift the global economy, risking a rift with European nations more concerned with revamping financial regulation.

Wall Street Journal

In President Barack Obama’s first foray into economic diplomacy, Washington will urge the shift at a summit next month in London, U.S. officials say, as markets look for a unified plan of action from the world’s most economically powerful nations.

Washington’s focus is at odds with France, Germany and other European nations that want the Group of 20 summit on April 2 to focus on rewriting rules governing financial markets. These nations say lax regulation was a major cause of the financial crisis and want to tighten their grip on hedge funds and private-equity firms.

All sides are looking to avoid a breakdown at the summit that would roil markets…

Read the rest:

World Bank: Global Trade Drops Most in 80 Years; What’s it Mean For Obama?

NYT Urges Obama To “Bail Out” Third World Too

 Despite Global Economy Downturn, China Still Lending

 World Bank Says Global Economy Will Shrink in ’09

 Obama has little reason to fall in with the G20

Obama says US is losing war in Afghanistan and hints at Taleban talks

March 8, 2009

President Obama conceded today that the US was not winning the war in Afghanistan and opened the way for negotiations with moderate elements of the Taleban, much as America did with Sunni tribes in Iraq.

The new strategy, which comes as Mr Obama prepares to send an additional 17,000 US troops into Afghanistan, emerged after a frenetic 48 hours of American diplomacy in the region involving new overtures to Iran, Russia and the Muslim world.

The fresh approach to Tehran is causing significant concern in Israel and the Arab world over fears that Mr Obama is making too many concessions to Iran at a time when his own officials say it now has enough enriched uranium to make one nuclear weapon.

Mr Obama’s admission of the dire situation in Afghanistan followed an invitation to Iran by Hillary Clinton, the US Secretary of State, to participate in a US-headed regional conference on Afghanistan later this month.

Read the rest:

Obama has little reason to fall in with the G20

March 8, 2009

“REDUCED cost of government, adequate government income, and ability to service government debts are all so important to ultimate stability . . . The United States seeks the kind of dollar which a generation hence will have the same purchasing and debt-paying power . . . Our broad purpose is the permanent stabilisation of every nation’s currency.”

By Irwin Stelzer
The Times (UK)

So wired Franklin D Roosevelt to the representatives of the 66 nations attending the London Economic Conference on July 3, 1933. Sailing on his yacht at the time, the president decided to torpedo prime minister Ramsay MacDonald’s plan for international action to deal with war debts and currency stabilisation.

Gordon Brown is less concerned about maintaining the value of his currency than that old dissimulator FDR professed to be. He needs a successful, or at least big and glitzy international conference for other reasons, not least for the political uplift that a sprinkle of Obama stardust might provide. But enough cynicism. Equally important is the prime minister’s belief in the need for international co-ordination and a strong stand against protectionism.

So he is relieved to have avoided MacDonald’s fate: the American president will attend the April 2 London conference of the G20 nations.

The important question is whether the conference can achieve its goal of a co-ordinated response to the world recession. There are reasons to doubt it.

The first is that Brown’s plea to a joint session of Congress to avoid “a protectionism that . . . in the end protects no one” fell on deaf ears. The White House and the Congress have assured their trade-union funders that Doha is dead, and there will be no more trade-opening measures. Indeed, existing agreements are to be tightened. Washington has more in common with French president Nicolas Sarkozy than with Brown when it comes to trade.

The second obstacle to close co-operation was made clear by the president in a press conference with the prime minister. Brown talked of grand bargains, a global new deal. Obama spoke vaguely of better co-ordination of financial regulation, and expressed no enthusiasm for co-ordinating American recovery efforts with those of the EU, except to call on Britain and Europe to do more. The president faces a bailout-weary Congress, and one that wants any additional borrow-and-spend directed at the plight of America’s homeowners. Indeed, even when it comes to regulation, the White House and key congressional figures let it be known that America has no intention of ceding any of its powers to an international body.

Perhaps the only area of solid agreement was a distaste for “tax havens” — those places to which over-taxed individuals and companies can legally flee. Nothing appeals to the leaders of nations such as high-tax Britain and soon-to-be-high-tax America as the possibility of a cartel that can impose its policies by disciplining “cheaters”.

The third obstacle in the path of a Brown triumph at the conference is money. The prime minister wants a larger role to be assigned to international institutions such as the International Monetary Fund (IMF) and the World Bank. But that would mean a larger contribution from cash-strapped Obama, which is not on the cards, especially since America is already under-represented at the IMF and the administration is taken with the scathing criticism of the IMF from economists it respects, such as Nobel laureate Joseph Stiglitz.

Fourth, Obama has no sentimental attachment to Britain or to Europe. He has a broadly leftist ideology, but other than that he is a “whatever works” sort of guy, to borrow from Tony Blair. Which is why his primary attention is on Asia, where Japan and China must continue to purchase Treasury IOUs if the Obama domestic programme is to be financed.

It is no surprise that Japan’s prime minister Taro Aso beat Brown for the prize of first foreign leader to be granted access to the Obama Oval Office. Or that Hillary Clinton slid over the little matter of China’s human-rights violations when she visited the regime’s leaders.

Finally, Obama knows that his presidency is doomed if there is another attack on the homeland that George Bush kept safe for seven years. That is why he has felt it necessary to make the war in Afghanistan, home of plotters aiming to do harm to America, Obama’s War. So he wants more troops from his European allies. And troops that will fight, not merely “reconstruct”, or patrol peaceful areas, or remain in barracks at night. But the Europeans are having none of it, which Obama — who already knows this — will have officially confirmed to him at the Nato meetings to which he will fly after the G20 session.

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