Obama kicks off a new global era
President Obama went to the summit to convey the start of a new era, and by most measures, he succeeded. The new era is characterized by a United States that listens as well as leads, that appreciates and develops its relationships with its allies in Europe and around the world, and that seeks to forge agreements with its rivals, Russia and China in particular, where it sees common interests.
A new era begins
Obama conveyed to the G-20 that they should start the economic and political clock with him now, and not at any time prior to it. The past eight years were just that: decisions made by a different president who was under his own unique set of economic and political demands and concerns.
Obama's United States is one that places a primacy on democracy, human rights, the elimination of poverty, and the achievements of science, every bit as much as it does on national security, commerce, economic growth, and international trade. Obama's United States cherishes it own culture while it supports other, constructive, local cultures. Obama is a man of the United States, he said, but yeah, he knows something about the life of France, too.
Still, this is not to say that the G-20 summit was short on deeds; far from it. G-20 leaders agreed to fund the IMF with, essentially, lending and investing power up to $1 trillion, which will help stabilize national credit markets. It also means there won't be any currency failures, because the U.S., E.U., Japan, China, and Russia say there won't be.
Obama did not get the G-20, particularly France and Germany, to commit to the additional fiscal stimulus his administration sought, but he did get the summit to recognize that the economic hole created by the recession is unlikely to be filled by U.S. fiscal stimulus alone. It looks like if Q2 euro-zone GDP statistics reveal a worsening contraction, euro-zone leaders will approve another round of stimulus.
True, Europe carried the day regarding the need for greater financial regulation, but given the size of the financial devastation that originated in the United States, few expected the U.S. to prevail on this issue.
Finally, in meetings and speeches across Europe, Obama provided powerful testimony that it is not 1981 but 2009. Thirty years ago, who could have imagined 20 European nations – from Eastern Europe and Western Europe – sitting down with U.S., Japan, Russia, China, India, Brazil and other nations to discuss economics, he asked? For that matter, who could have imagined a president named Obama, he added.
Economic Analysis: In general, a very good G-20 summit for the United States, and for the world. The era of Darth Vader is over. The United States is learning to work with its key allies again in what it knows is an interdependent and interconnected global economy. Very comfortable on the world stage and generally well-received, President Obama let G-20 leaders know that a new economy must emerge in this decade – one that relies on multiple regions of commerce, not just on U.S. consumption, for global GDP growth.
Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.