April 2, 2009

Triumph at the Summit of Mount Obamarama

Hatched by Dafydd

A summit just concluded in London among the G-20, the group of 20 richest nations; the heads of state spoke to each other without visible brandishing of weaponry. This much we can all agree upon.

But that's about all we can agree upon. Here is AP's take on the outcome:

At his summit debut, President Barack Obama failed to persuade foreign counterparts to commit to fresh and lavish spending to boost economic revival. And the success he did achieve in finding common ground was as much the result of modified goals as swaying other countries to bend to U.S. priorities.

Still, he emerged with much of what he wanted from allies on the flailing global economy. And he helped thwart a French-backed attempt to set up an international financial regulator.

And here is the assessment by the New York Times:

After more than 11 hours of meetings, Mr. Obama emerged Thursday from his first summit meeting with a handful of modest concrete commitments. He did not get much of what American officials had been hoping for, notably failing to persuade other countries to commit to more fiscal stimulus spending.

Oh, yes; they're clearly singing from the same hymnal.

So what exactly does AP see as emerging with "much of what he wanted from allies on the flailing global economy?" Oh, that's as clear as crystal:

Thursday's daylong gathering of the G-20 nations pledged $1.1 trillion in loans and guarantees to struggling countries, agreed to crack down on tax havens, large hedge funds and other risky financial products, rejected protectionism that hampers foreign trade and committed to upgrading an existing financial forum to flag problems early in the global financial system. Those were all elements Obama was seeking.

And, as he hoped, the leaders also rejected a push by French and German politicians for a global financial super-regulator, a proposal that had been expected to go down in defeat. The emphasis, instead, was on cooperation among nations to each choose it own way to enact "a stronger, more globally consistent, supervisory and regulatory framework...."

Still, the leaders, many wary of piling up debt, did not sign off on large new stimulus packages for their own countries. Obama's administration had initially pushed for such a commitment, but backed off in recent days as European opposition solidified.

So Barack H. Obama elicited a few trivial, generalized noises from the other members about markets and trade; he managed to "thwart" a French demand for one-world government (at least on financial issues) that everybody knew going in was "expected to go down in defeat" anyway... and he bowed to the rest of the wealthy nations on a world-wide stimulus package, dropping it the moment it met the slightest resistance. Or skepticism.

Obama's "agreement" comprised caving to Europe; there will be no such global stimulus, as the One had long insisted was vital to preventing complete economic meltdown.

Mind, I'm very glad he caved; it's a craven admission by the president that his earlier sepulchral warnings and nigh-biblical denunciations were just so much hot air (no offence to Captain Ed, et al)... and the confession that, in the end, doing nothing is preferable to doing Obamunism -- even to the Euroleft! Still, it's always easy to come to agreement when One is willing to jettison all of One's demands; it rarely takes much diplomatic genius to persuade people to accept their own position instead of yours.

Oh, wait; there was one other signal triumph by the Childe President: According to AP, Obama somehow got the developed nations to "agree[] to crack down on tax havens."

Bully! So no longer will China allow companies to incorporate in Macao or Hong Kong and thereby skate on paying their "fair share" of taxes. But how did he do it?

Sayeth the Times, the big disagreement was between President Nicolas Sarkozy of France -- who wanted the nations to commit to a "name and shame" policy anent tax havens -- and President Hu Jintao of Red China, who did not want any such naming and/or shaming of the two biggest tax havens in Asia, to wit, those very same Chinese provinces of Macao and Hong Kong.

Here is how it all played out:

Mr. Sarkozy wanted the big communiqué produced by the Group of 20 to endorse naming and shaming global tax havens, maybe even including Hong Kong and Macao, which are under China’s sovereignty. Unsurprisingly, Mr. Hu was having none of it. He appeared angry that Mr. Sarkozy was effectively accusing China of lax regulation, and that the French leader was asking China to endorse sanctions issued by the Organization for Economic Cooperation and Development, a club of wealthy nations that Beijing has yet to join.

According to accounts provided by White House officials and corroborated by European and other officials also in the room, Mr. Obama escorted both men, one at a time, to a corner of the room, to judge the dispute. How about replacing the word “recognize,” Mr. Obama suggested, with the word “note?”

The result: “The era of banking secrecy is over,” the final communiqué said. “We note that the O.E.C.D. has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information.” Hong Kong and Macao did not appear on the list.

And there we have it. In a stunning tour de force, Barack Obama has achieved the trifecta:

  • He grabbed credit for "thwarting" a French plan that was already doomed before Obama set foot in Londontown;
  • He obtained a broad agreement with the other nations by taking the signal policy he has claimed for months was the only thing which could save the world economy -- and consigning to the dustbin of non-history;
  • And he resolved a conflict between Europe and China over the latter's tax dodgers by kow-towing to the Chinese, ensuring that Macao and Hong Kong can continue to operate without any fear of being outed, named, isolated, or shamed.

Well now! See how much can be accomplished if America really sets its mind on diplomacy, rather than the Cowboy-George, go-it-alone policy of dictating to the rest of the world? The Times sums up what our man in London has taught us about our proper place in the world:

Gone are the days, from Pax Britannica to Pax Americana, when Britain and the United States made the rules that others followed.

“If there’s just Roosevelt and Churchill sitting in a room with a brandy, that’s an easier negotiation,” Mr. Obama said during his hourlong meeting with the international news media, during which he called on reporters from India and China to ask him questions. “But that’s not the world we live in, and it shouldn’t be the world that we live in.”

Yes, he has certainly proved that those days (of two years ago) are gone. Forgive me if I don't caper and frolic in glee; I've been feeling a bit enervated for the last two-plus months.

Hatched by Dafydd on this day, April 2, 2009, at the time of 11:43 PM

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