By all accounts, Barack and Michelle Obama are making quite a splash as they wend their way across Europe. Rapturous crowds shriek excitedly at every glimpse of the American visitors. The leaders of Britain, France and Germany have seized every opportunity to be seen with the Obamas and to conduct joint press conferences with the U.S. President in which they praise his views and leadership qualities. In terms of American image and repairing the general tenor of U.S./European relations it is hard to imagine a better trip. Barack Obama is not George W. Bush. Our allies and their publics are ecstatic.
But what about the substantive results of the conferences so far? The G-20 economic summit and the NATO meeting had serious business on their agendas. Accomplishments here are quite a bit more modest, but important none the less.
At the G-20 Obama reportedly resolved a dispute between French President Nicolas Sarkozy and Chinese Premier Hu Jintao by direct personal diplomacy. Source. Of the four main topics of the summit: cooperation, anti-protectionism, financial regulation and closing tax havens, Obama's views fared well enough for such a gathering. Cooperation included a $1.1 trillion collective pledge of assistance for the third world that was adopted. Keep in mind that a good part of the rationale for this is to allow the developing nations to continue to buy G-20 exports and you can appreciate its acceptance. Obama's other aim, to encourage the other governments to engage in strong stimulus efforts in their own countries, met with mixed results. The British government of Gordon Brown enthusiastically agreed. The Germans under Angela Merkl feel their safety net is already strong. The French government of Sarkozy says it has done its stimulating and doesn't need to do it again. Today Obama said that no one should, "believe the notion that, somehow, the United States was trying to dictate the budgets of other countries."
On the regulatory matters, all agreed that "complex financial instruments" such as credit default swaps, derivatives and hedge funds must now be brought under strict regulatory oversight. There was also surprising accord on the need to crack down on "tax haven" dodges such as Cayman Islands incorporation and secret Swiss bank accounts. The nitty gritty of getting these things done is far too arcane for quick settlement among many nations at a summit table and will be left to specialists to devise later. While this is unavoidable for practical reasons, it remains to be seen how effective or coordinated the international effort will subsequently be. Some observers are skeptical.
On the NATO front, the Allies agreed to send 3,000 additional combat troops to Afghanistan and a few hundred trainers for the Afghan Army and police. While this is a small augmentation and no doubt less than Obama hoped, he will gladly take whatever he can get. Most European publics are not supportive of combat involvement there and to get any leaders to support the U.S. President with anything militarily at this point is a successful outcome for him and certainly more than his predecessor had been able to secure.
All in all, the overall box score must be judged quite successful so far from the American point of view. Both as a campaign event to return the American image to favorability and influence foreign governments through public pressure on their leaders, and substantively in terms of U.S. positions adopted at the forums, the trip has done very well.
The Obamas are next on their way to the Czech Republic before concluding the journey with a visit to Turkey. It will be informative to see how things are received on the edge of Eastern Europe and in the most Westernized part of the Muslim world.
2 comments:
(from Moyers' dialogue last Friday) "...there is a consensus among economists and white-collar criminologists (and senior regulators that have successfully resolved prior crises such as William Seidman, Edwin Gray, and Paul Volcker) that failing banks should be placed promptly into receivership if they cannot recapitalize. So the fundamental question, even if the PCA law was never passed, is what can the nation do to end the disastrous Paulson/Geithner policy of covering up the largest banks’ losses and leaving the CEOs and senior officers that caused their failures, often through fraud, in power? How many of those of us that voted for Mr. Obama believed that they were voting for a continuation of Bush’s failed financial regulatory policies? Given the terrible cost to taxpayers during the early years of the S&L debacle of “forbearance” for failed S&Ls, the horrific failure of Japan’s embrace of the cover up of its bank losses, and the great success of the vigorous reregulation of the S&L industry why would we adopt the failed strategy instead of the proven success? The way we reregulated the S&L industry was not simply an economic success, it was vital to restoring at least some integrity. We insisted on honest accounting, used prompt receiverships, and rooted out the control frauds. This led to over 1000 felony convictions related to the debacle – the greatest criminal justice success in history against elite white-collar criminals."...and I would add; how many of you who voted for Obama thought you were voting for a continuation of, or an acceleration of, nearly all of Bush's policies, unlike America, outrage is still visable in Europe, and that's the story you chose to neglect Steve, the anger at Obama for ramping up the hated Bush agenda. I listen carefully to him and the only difference I discern is 'style'.
Serious comment. It is difficult to know what to believe here. The accountability of the funds released under the new administration has been distressingly insufficient. It is possible that Obama's advisory team, particularly Summers and Geithner, are part and parcel of the good old boys network of the financial industry, covering up for and enabling former pals and their conduct of business as usual.
It is also possible that Obams's sincere analysis is that the system is so shaky that it can't handle bankruptcies, that the world financial structure would indeed unravel like 1933 if a company like Citi, for example, were to crash. He talks about strict regulation but after the current emergency is over. Sellout or voice of reason?
I've been holding some information since April 3 on Obama's meeting with the bank CEOs that could shed some light on it. If I have time I'll share it tomorrow.
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