Are you kidding? tag "new world order"
As Summit Starts, Emerging Nations Weigh New Clout
Brazil, China, India Step Up In Diplomatic Power Shift
By Anthony Faiola and Glenn Kessler
Washington Post Staff Writers
Saturday, November 15, 2008; A01
When world leaders gathered last night for a White House dinner on the
eve of a major economic summit, the faces around the table were not
just those of the Europeans and Japanese who normally mix in the
highest circles of diplomacy. This time, heads of state from the
across the developing world, from China to Brazil to India, had a seat
at the table.
Their inclusion in this weekend's talks on the global financial crisis
marks a historic power shift. The summit is being seen as a model of
what high-level diplomacy will look like in the future, with emerging
giants gaining a voice in a club that long included only the richest
of nations. But at a time when China maintains the world's largest
cash reserves and the United States is going deep into debt, the
definition of rich has changed.
Leaders from developing countries -- which are expected to account for
nearly 100 percent of global growth next year as developed countries
fall into recession -- now see an opportunity to broaden their clout.
At the summit today, they will push for more influence in the
International Monetary Fund as well as the other institutions that are
charged with maintaining global economic stability, but that still
remain largely controlled by Europe, the United States and Japan.
Developing countries will also seek to cement their inclusion in
global decision-making, pressing for entry into organizations such as
the Switzerland-based Financial Stability Forum, which brings together
developed world regulators, central bankers and financial officials.
Analysts say the shift toward global inclusion underscores how the
financial crisis crippling the developed world has provided emerging
giants -- which are relatively healthier -- with a chance to assert
themselves.
"We must use the crisis as an opportunity to correct things that were
wrong before the crisis and strengthen multilateral bodies, because in
a globalized world we need serious and representative forums to take
global decisions," Brazilian President Luiz Inácio Lula da Silva told
reporters this week. Lula dismissed the modern relevance of the Group
of Eight, an organization of seven developed countries plus Russia,
that might have been called on to deliberate on the crisis in another
era.
"We need to have other countries and other continents for more
democratic, more plural decisions," Lula said.
With new clout, some say, comes new responsibilities. In an interview
yesterday, Japanese Prime Minister Taro Aso called on nations such as
China to offer up some of their vast reserves to the IMF, which has
been charged with bailing out a number of countries in recent weeks.
With the economic crisis deepening, he said, the IMF would need more
than the roughly $200 billion in its war chest to help troubled
nations.
Japan would offer as much as $100 billion more, he said, but other
countries with deep pockets should fulfill their responsibilities.
"It doesn't have to be Japan alone that would provide such funds," Aso
said. "Oil-producing countries, China and other countries that have
ample reserves could also make their contributions."
Aso also showed reluctance to quickly cede voting power in
organizations such as the IMF. "I don't think it's something that
should be achieved today or tomorrow," he said. "I believe that needs
to be worked out over time."
Still, most nations, including the United States, have acknowledged
that a new world order has emerged and that the developing world
should have a larger say in international organizations.
Support for that notion, analysts say, was underscored by the way in
which this weekend's summit came together. Pressed to convene a
gathering of world leaders to address the crisis, President Bush
eschewed the G-8, and called instead on the broader "Group of 20"
nations -- which includes countries such as Argentina, Saudi Arabia
and South Africa -- to deliberate this weekend.
"We share a determination to fix the problems that led to this
turmoil," Bush said at the White House dinner last night. "We share a
conviction that by working together, we can restore the global economy
to the path of long-term prosperity."
At the summit, leaders are seeking consensus on how to combat a global
recession and create a road map for broader reform of the world's
financial system. In the summit communique, which was being finalized
last night, the leaders are expected to agree on the root causes of
the crisis and to back the creation of a "college of supervisors" to
examine the inner-workings of the world's 30 biggest financial
institutions. They are also expected to express support for countries
seeking to use fiscal stimulus to bolster their economies.
The leaders plan to set up working groups to examine such issues as
overhauling international financial institutions and harmonizing
accounting rules across borders. They will also issue a plea to
maintain free and open trade as well as aid to developing countries.
Officials will take a stab at a few more touchy issues, such as
establishing global guidelines for executive pay at financial
companies.
The communique is expected to be parsed in the language of diplomacy
and to relegate the details to lower-level diplomats to work out in
coming weeks and months. The heads of state would regroup in early
spring for a follow-up summit.
The summit takes place as the world is on the cusp of a global
recession. Officials in the 15 eurozone countries announced yesterday
that the region had officially fallen into recession. Overall,
developed economies are projected to contract by 0.1 percent in 2009,
while the developing world will grow by 4.5 percent, according to new
estimates released by the World Bank.
With developing countries gaining a foothold in the global economy,
German Chancellor Angela Merkel insisted this week that the IMF in
particular be overhauled. The developed world must be given "more
possibilities to wield influence," Merkel told the Sueddeutsche
Zeitung newspaper. "That will happen at the expense of industrialized
countries, but that is how it goes."
The summit, analysts say, is likely to plant the seed for the creation
of a new grouping of nations -- bigger than the G-8, but perhaps not
as broad as the G-20 -- that will be called to meet regularly over
financial and diplomatic issues of global importance.
Canada has floated an alternative idea to simply turn the G-20 into an
annual head-of-government meeting called the L20 ("L" would stand for
"leaders"). Recep Tayyip Erdogan, the Turkish prime minister, has
supported that proposal.
"In terms of balancing the crisis, in terms of finding a way out of
this global crisis, heads of states and heads of governments, maybe we
can talk about a change," he said yesterday at the National Press
Club.
One advantage to the inclusion of developing nations, the leaders
argue, is that they can fight for their own interests. This weekend,
officials from developing nations are insisting that rich countries
keep their promises to give foreign aid to the poorest nations despite
problems at home.
The summit has become the target for protesters with a hodgepodge of
messages, some only tangentially related to the event. In Lafayette
Park, across from the White House, only a handful of supporters showed
up last night, and police forced the organizers to remove trays of
food they had brought to feed the homeless while Bush was hosting the
G-20 leaders.
"At the summit, they are talking about redesigning capitalism because
it's not working. We want to show that you don't need capitalism to
survive, as long as people help each other," said Sam Palmer, 16, a
student from Arlington who helped cook the food.
The protesters have planned further demonstrations for today,
including a carnival in Murrow Park at 18th and H Streets NW, and a
forum on economic issues in a church several blocks away. No
demonstrators are expected to be allowed near the summit site in the
National Building Museum.
Staff writer Pamela Constable contributed to this report.>end
Peace,
Doc
On Nov 15, 8:16 pm, "Societal Retard" <[EMAIL PROTECTED]>
wrote:
> Too late for that either way, right?
>
> On Sat, Nov 15, 2008 at 8:53 PM, Travis <[EMAIL PROTECTED]> wrote:
> > I think the "problem" would fix itself if the damn gov't would stay out of
> > it.
>
> > On Sat, Nov 15, 2008 at 7:05 PM, Societal Retard <[EMAIL PROTECTED]
> > > wrote:
>
> >> I dunno. I'm hearing you, and I'm admittedly a big Krugman fan- the
> >> simple fact is that the guy has usually been right- but this economic
> >> catastrophe is to serious to not take all ideas into account. What
> >> frustrates me is that half of the original bailout money is *already
> >> gone, *most of it apparently going to AIG, but no one actually knows
> >> where it went for sure- Henry Paulson won't divulge any "details!"
> >> Amazing.
>
> >> If we don't just fix the problem, and keep throwing hundreds of billions
> >> more out in band aid bailouts (Freddie and Frannie are going to need 500
> >> Billion to solve their sub prime problems, it's now being reported ) we'll
> >> wind up with no money and will have failed to stop the crisis.
>
> >> On the other hand, if Krugman's wrong and we spend to much to fix it,
> >> we'll open up a whole new set of problems because we'll be broke and won't
> >> be able to even pay for basic infrastructure repairs, much less pay SSI and
> >> Medicare costs.
>
> >> We're tottering perilously close to a bad place; If our currency loses to
> >> much more of it's value, then foreign nations may choose to invest the
> >> profits they make from exports (Hello China) in their own national banks
> >> instead of investing in US treasury bonds, while also deciding to sell all
> >> the treasury bonds they hold in the Federal Reserve now overnight because
> >> the money will be, for the first time, worth more in their national banks
> >> (or in another nation's bank) and earn more in interest elsewhere than it
> >> would if invested in US Treasury bonds.
>
> >> A HUGE part of our economy relies on the money the US earns by being,
> >> basically, the world's banker. If that arrangement changes because the
> >> dollar becomes worth less and less, it would spark an economic meltdown
> >> that
> >> might make the depression look like a beach party...
>
> >> We have to ditch our left vs right blinders in this time, and try to find
> >> to best solution.
>
> >> Scary stuff.
>
> >> On Sat, Nov 15, 2008 at 4:22 PM, Travis <[EMAIL PROTECTED]> wrote:
>
> >>> From: Travis
> >>> Subject: Krugman's Prescription for Disaster
> >>> Date: Thursday, November 13, 2008,
>
> >>> *Krugman's Prescription for Disaster
> >>> *by David T. Beito
>
> >>> Paul Krugman calls for Obama and his advisors to push an expanded version
> >>> of the New Deal (see the link below by Mark R.
> >>> Hatlie<http://www.historiansagainstwar.org/blog/2008/11/new-new-deal-krugman...>).
> >>> According to Krugman, they should boldly throw caution to the
> >>> winds<http://www.nytimes.com/2008/11/10/opinion/10krugman.html?th&emc=th>and
> >>> *"figure out how much help they think the economy needs, than add 50
> >>> percent. It's much better in a depressed economy, to err on the side of
> >>> too
> >>> much stimulus."
>
> >>> *Obama should reject this advice. If he listens to Krugman, the likely
> >>> result will be a wave of stagflation that makes the experience of the
> >>> 1970s
> >>> look mild by comparison. Such a prescription would both continue and
> >>> accelerate Bush's fiscally reckless policy of propping up malinvestments
> >>> through massive increases in spending, deficits, and easy credit by the
> >>> Federal Reserve. As the continuing fall of the stock market and the rise
> >>> of
> >>> unemployment indicate, more bailouts and more "shock socialism" do not
> >>> work.
> >>> Obama made a fatal mistake in failing to oppose the aptly described
> >>> billionaire bailout.
>
> >>> This call for a hyper New Deal rests on a flawed view of history.
> >>> According Krugman, the only reason Roosevelt failed to bring recovery was
> >>> because he spent too little, not too much. At the same time, he tries to
> >>> have it both ways by stating that the crisis of the 1930s would have been
> >>> "much worse" without the New Deal.
>
> >>> A key problem with Krugman's analysis is that it does not adequately
> >>> explain why the decade-long New Deal era depression lasted so much longer
> >>> than previous depressions. Prior to the 1930s, depressions (as in the
> >>> sharp
> >>> and short downturn of 1921 and 1922) had typically lasted for two to three
> >>> years. The predominant anti-depression policy before Hoover and Roosevelt
> >>> was to cut spending, balance budgets, and let prices, profits, and wages
> >>> readjust to more sustainable levels. Yet Krugman regards this older
> >>> approach
> >>> for curing depressions as "much worse" than the New Deal. The logical
> >>> implication of his argument is that the New Deal, modest as it was, would
> >>> have made the Great Depression at least somewhat shorter than previous
> >>> downturns. The fact that it did not stands as a stunning indictment of
> >>> FDR's
> >>> policies.
>
> >>> The unprecedented duration of the depression also represents an
> >>> indictment of Herbert Hoover's approach. This was because Hoover
> >>> intervened
> >>> too much not, as Krugman would have it, too little. Krugman's article
> >>> neglects the relevant point that Hoover had pursued a mini-New Deal from
> >>> 1929 to 1933 via programs such as the Reconstruction Finance Corporation
> >>> and
> >>> the Federal Farm Board. It was Hoover, not Roosevelt, who was the first
> >>> president to reject the advice of the "leave it alone liquidationists."
> >>> Instead of letting malinvestments (or toxic assets in today's parlance)
> >>> readjust at a lower level, he desperately propped them up. In great part
> >>> because of Hoover's high-wage policies, real wages were actually 12
> >>> percent
> >>> higher in 1932 than in 1929! Meanwhile, of course, unemployment advanced
> >>> to
> >>> record levels as businesses saved on payroll costs by laying off workers.
> >>> Perhaps if Hoover had listened to the advice of the so-called
> >>> "liquidationists," the depression would have been over by 1931.
>
> >>> More troubling, at least for opponents of war, is Krugman's dubious
> >>> contention that *"What saved the economy, and the New Deal, was the
> >>> enormous public works project known as World War II, which finally
> >>> provided
> >>> a fiscal stimulus adequate to the economy's needs."* The evidence does
> >>> not support the view that that war was beneficial for the economy. In a
> >>> seminal article for the Journal of Economic History, Robert Higgs
> >>> convincingly
> >>> challenged <http://www.independent.org/newsroom/article.asp?id=138> the
> >>> Keynesian theory of World War II as put forward by Krugman and others.
>
> >>> While unemployment disappeared during the war, it was hardly a step
> >>> forward. Moving men and women from the unemployment lines to the killing
> >>> fields of Anzio did not represent economic progress in any meaningful
> >>> sense.
> >>> During the war, Americans at home suffered from rationing, shortages, more
> >>> accidents on the job, longer hours, and many other measures of economic
> >>> deprivation. Moreover, as Higgs points out, *"real personal consumption
> >>> declined. So did real private investment. From 1941 to 1943 real gross
> >>> private domestic investment plunged by 64 percent; during the four years
> >>> of
> >>> the war it never rose above 55 percent of its 1941 level; only in 1946 did
> >>> it reach a new high."
>
> >>> *According to
> >>> Higgs<http://www.independent.org/pdf/tir/tir_01_4_higgs.pdf>, genuine
> >>> prosperity did not begin to return until the last months of 1945
> >>> and 1946. This prosperity occurred under a policy of reverse Keynesianism
> >>> which included massive reductions in spending because of demoblization,
> >>> rapid steps toward price decontrol, and scaled back deficit spending.
>
> >>> Higgs sums it up<http://www.independent.org/newsroom/article.asp?id=2188>
> >>> :
>
> >>> World War II, the so-called Good War, has been a fount of historical
> >>> fallacies. One of the greatest – and one of the most pernicious for
> >>> subsequent policymakers – is the notion that prosperity prevailed during
> >>> the
> >>> war. Although Americans might have been dying in the Pacific and European
> >>> theaters of war, people on the home front actually benefited from the war,
> >>> because it propelled the economy at long last out of the Great Depression.
> >>> This view of the war would be sufficiently egregious if it were true, but
> >>> despite the claims of historians for the past half century, it is not
> >>> true.
>
> >>> Obama's best hope to bring lasting recovery is to let the economy go
> >>> through a short, but sharp, readjustment. He needs to remove the
> >>> malivestments not, contra Krugman, perpetuate them. Obama can facilitate
> >>> this readjustment to a more sustainable level by cancelling the bailout,
> >>> cutting spending, and pruning deficits. Another worthy goal would be to
> >>> dismantle the Federal Reserve which helped to create this mess through its
> >>> easy credit policies.
>
> >>> Most of all, however, Obama should end our costly empire by closing down
> >>> our overseas bases and bringing home the troops. Only then, can we start
> >>> to
> >>> get our financial house in order and move towards genuine economic well
> >>> being.
>
> >>>http://www.lewrockwell.com/orig8/
> >>>beito4.html<http://www.lewrockwell.com/orig8/beito4.html>
> >>> __._,_.___ Messages in this topic
> >>> <http://groups.yahoo.com/group/tsowell/message/5386;_ylc=X3oDMTM0cWcyc...>
> >>> (1) Reply (via web post)
> >>> <http://groups.yahoo.com/group/tsowell/post;_ylc=X3oDMTJwdXRudnN1BF9TA...>|
> >>> Start a new topic
>
> ...
>
> read more »
--~--~---------~--~----~------------~-------~--~----~
Thanks for being part of "PoliticalForum" at Google Groups.
For options & help see http://groups.google.com/group/PoliticalForum
* Visit our other community at http://www.PoliticalForum.com/
* It's active and moderated. Register and vote in our polls.
* Read the latest breaking news, and more.
-~----------~----~----~----~------~----~------~--~---
