As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, March 30, 2009

Obama Spars With The World

On the eve of the G20 summit. McClatchy looks at whether Europe will embrace the President the way they did during the campaign.

Obama leaves on Tuesday on a whirlwind eight-day tour. He remains enormously popular in Europe, and the throngs that greeted him last summer as a candidate are likely to grow. With first lady Michelle Obama along, Obama's debut on the world stage as president already is inspiring anticipation of the kind of rock-star reception that greeted John and Jackie Kennedy on their first trip a first couple to Europe in 1961.

Yet Obama also heads into his first overseas trip with grand goals _ looking to forge a coordinated global response to the Great Recession, hoping Europe will send more of its sons and daughters to help in an escalating war in Afghanistan, and seeking to restore international cooperation that he thinks suffered in the Bush years.

That will be a tough sell. Publicly, European and world leaders will embrace Obama. But privately, they likely will say no to some of his requests, most notably sending combat troops to Afghanistan, or simply avoid the subject.

Certainly that's the case with regard to global stimulus, which the Obama Administration has pushed but which has caused such pushback that the US has backed off. Europe appears to prefer increased regulation of financial markets and to resist the United States trying to encourage additional spending. The Guardian writes that Europe has won the debate:

European leaders, led by Germany's chancellor, Angela Merkel, come to the crucial Docklands summit on Thursday believing they are winning or have won the argument about how to tackle casino capitalism.

The case pushed by Merkel repeatedly in recent weeks, and echoed by France and the European commission, is that there is no point now in more tax cuts and deficit spending to boost demand since it is not yet clear whether the huge fiscal stimuli packages already launched are actually going to work.

Rather, the Europeans argue, the focus should be on fixing a European and global system that is broke – through a new supervisory and regulatory regime. This option, Merkel declared at the weekend, offers the best chance of avoiding similar crises erupting once a decade, as has been the cycle since the 1980s.

While this is a noble goal, the problem is that the "regulatory reform" elements of the G20 communique look toothless - additional boards and structures composed of the same people who missed this crisis. One point of concurrence could spell the end of offshore tax havens, althought the changes could also be cosmetic. In short, the G20 could result in nothing done on the fiscal and monetary levels, and nothing of substance on the regulatory level. Simon Johnson suggests how Obama can salvage the summit, but only on the issue of funding and staffing for the IMF.

The larger issue is the lack of coordinated action among the world in addressing a truly global crisis. America's tarnished reputation through the Bush era has lessened the influence on these matters, as Paul Krugman notes:

The details of our current crisis are very different, but the need for cooperation is no less. President Obama got it exactly right last week when he declared: “All of us are going to have to take steps in order to lift the economy. We don’t want a situation in which some countries are making extraordinary efforts and other countries aren’t.”

Yet that is exactly the situation we’re in. I don’t believe that even America’s economic efforts are adequate, but they’re far more than most other wealthy countries have been willing to undertake. And by rights this week’s G-20 summit ought to be an occasion for Mr. Obama to chide and chivy European leaders, in particular, into pulling their weight.

But these days foreign leaders are in no mood to be lectured by American officials, even when — as in this case — the Americans are right.

The financial crisis has had many costs. And one of those costs is the damage to America’s reputation, an asset we’ve lost just when we, and the world, need it most.

The summit begins on Wednesday, April Fool's Day. Stay tuned.

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