Online Journal
Front Page 
 Special Reports
 News Media
 Elections & Voting
 Social Security
 Editors' Blog
 Reclaiming America
 The Splendid Failure of Occupation
 The Lighter Side
 The Mailbag
 Online Journal Stores
 Official Merchandise
 Join Mailing List

Analysis Last Updated: Sep 28th, 2009 - 00:53:03

No big news from G20 summit
By Peter Morici
Online Journal Contributing Writer

Sep 28, 2009, 00:13

Email this article
 Printer friendly page

The enhanced status for the G20 and new national policy audits announced in Pittsburgh are hardly the great progress being proclaimed by government officials.

The elevation of the G20 to supersede the G8 in status merely recognizes reality. The salient issues, other than bank regulatory reform, require genuine action from China and other prominent developing countries, which are members of the G20 but not members of the G8.

Announced audits of national economic policies by the G20 already are undertaken by the IMF and WTO. Generally, IMF and WTO findings are ignored by national policymakers, and G20 audits will have little more impact on member country fiscal, monetary and trade policies. In fact, little pressure likely will be placed on China and the United States, for example, to respectively modify their exchange rate regimes and budget deficits, because G20 policy audits will done mostly at the IMF, where target countries enjoy a great deal of influence on what is written about them. In the end, these audits may tend to play down the consequences of these policies rather than motivate substantive change.

Often in international forums, where no real progress can be accomplished owing to lack of consensus, new processes are announced -- his is a well-worn tactic at the WTO. To get the global economy on a more robust growth path, China needs to substantially revalue the yuan against the dollar and the U.S. needs to reign in federal budget deficits. Binding agreements to accomplish those are not likely in Pittsburgh. The announcement of new forums and studies is what diplomats do when they have little substantive progress to announce.

Much more progress is likely and expected on bank regulatory reform, because the major players on that issue are closer to consensus about goals and means to accomplish genuine change.

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and the former Chief Economist at the U.S. International Trade Commission.

Copyright © 1998-2007 Online Journal
Email Online Journal Editor

Top of Page

Latest Headlines
Another war in the works
No big news from G20 summit
The great Fed-financed dollar decline and stock market rally of 2009
The economy is a lie, too
Regulate bank pay
Why propaganda trumps truth
Post-bubble malaise
Euro peace: The sounds of silence
Will the Corporate Supremes now dance on democracy�s corpse?
The �Axis of Evil� and the �Great Satan�
A fresh approach in Afghanistan: An end to war?
Taking down a nation: Money, murder and national sovereignty
US audacity of hope falters: Settlement freeze no longer required
There is no such thing as liberal fascism
Rome falls while the sun shines
Why not crippling sanctions for Israel and the US?
Zionism: An �abnormal� nationalism
Peak oil and climate change -- drowning in rhetoric
Reflecting on Iran�s presidential election
The US and NATO seek to balkanize the Caucasus