Spotlight G-20: Fed Bashing at the G-20: A Return to the Gold Standard Anyone?

Gerald Epstein
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

A strange thing happened on the way to the G-20 meetings: world elite opinion has turned against the Federal Reserve’s “quantitative easing” (QE) program, the only significant “Keynesian” macroeconomic policy being implemented anywhere in the face of massive unemployment in much of the developed world; and this criticism is garnering some support from strange places, including among some progressive economists.  With all the hub-bub, the mercantilist policies of Germany and China and the pre-Keynesian Gold Standard-like stance of the European Central Bank (ECB), are getting a virtual free ride. Meanwhile, the true villain is escaping scrutiny all together: the elite consensus that there is too much sovereign debt in the world and so there cannot be any more fiscal expansion.

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Spotlight G-20: Hot Money Creating Havoc in the Global Economy

Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Part two of Triple Crisis blogger Kevin Gallagher’s interview with the Real News Network on why many developing countries are adopting capital controls as a countermeasure to the Fed’s proposed quantitative easing and why the IMF is supporting them.

Watch part one of the interview at the Real News Network. Read more on Gallagher’s work on capital controls and foreign investment.

Spotlight G-20: Global Economic Cooperation: The Alternative to Agreed Rules is Anarchy, Not a Free Market

Michael Prowse, Guest Blogger
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Whenever liberal policymakers make a serious plea for global economic cooperation, it elicits a knee-jerk reaction from conservatives. Don’t interfere with free markets which require freely adjusting exchange rates.

Tim Geithner’s proposed numerical targets for current account deficits and surpluses met just this response. And Chinese communists, ironically, allied themselves with traditional conservatives. Cui Tiankai, a Chinese deputy foreign minister and leading G-20 negotiator, said the 4 per cent proposed ceiling for surpluses and deficits harked back “to the days of planned economies”.

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Spotlight G-20: Quantitative Easing: Crippling Costs for Developing Countries

Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

In response to his opinion article in the Guardian, Triple Crisis blogger Kevin Gallagher was interviewed by the Real News Network on the consequences of the Fed’s proposed quantitative easing and its implications for G-20 leaders currently trying to prevent a “currency war” at the Seoul summit.

Read more on Gallagher’s work on capital controls and foreign investment.

Spotlight G-20: Rebalancing the world economy: implications for Asia

In October 2010 Triple Crisis Blogger Kevin P. Gallagher interviewed Dr. Nagesh Kumar, Chief of the Macroeconomics division of the UN Economic and Social Commission for Asia and the Pacific. With capital controls and global economic rebalancing high on Thursday and Friday’s G-20 agenda, Kumar illuminates the specific challenges Asian-Pacific economies face and potential strategies for maintaining economic growth.

Gallagher: It must be interesting to be working in Thailand, the epicenter of the 1997 financial crisis, while formulating policies to prevent and mitigate financial crises in Asia in the aftermath of the current crisis.   How has Thailand and the East Asia region in general been affected by the crisis and how does that contrast with the 97 crisis?

Kumar: When this crisis hit the world economy, everybody was impacted. Yet because the Asia-Pacific region had experienced such a severe crisis in 1997, Asian nations had made their financial systems relatively more prudent, so they were less severely impacted. So the financial system remained intact– there were no collapses of banks like in many Western countries.

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Spotlight G-20: We Need Global Keynesianism

Matías Vernengo
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

The expectations for the meeting of the world leaders where huge, but when they gathered no agreement was reached on currency wars, commodity prices or demand stimulus.  As it should be clear, I am not making a prediction about the forthcoming G-20 meeting, but just recalling the failed London Economic Conference, held in the summer of 1933, at the peak of the Great Depression.  Contrary to conventional wisdom, which argues that the conference failed because it was unable to reestablish a credible Gold Standard, the main mistake in London was the incapacity to provide a framework for global expansion, in part as a result of British incapacity, in part as a result of American unwillingness as noted by Charles Kindleberger.

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Spotlight G-20: The G-20 Summit Dodges Real Reform

Martin Khor
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Triple Crisis blogger Martin Khor published the following opinion article on the crucial financial reform issues left out of Thursday and Friday’s G-20 agenda.

The G-20 leaders are meeting at a moment of new turmoil in the global economy. Yet important structural factors that underlie the renewed crisis are absent from the agenda of the G-20 summit in Seoul.

The hopes of a rapid global economy recovery have recently been dashed by the sovereign debt problems in several European countries, the gyrations in currency exchange rates, volatility in capital flows, and the war of words over “competitive devaluations”.

A new South Centre report argues these recent problems reflect the lack of international mechanisms to prevent financial crises that now threaten to spill over into the trading and economic systems.

Read the full article at the Guardian.

Spotlight G-20: An Exit from Debt Crises: The Need for Fair and Transparent Arbitration

Melinda St. Louis, Guest Blogger
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

South Korea’s painful experience of the Asian financial crisis has led the current G-20 chair to ensure discussing ways to strengthen the “global financial safety net” is high on the meeting agenda. The IMF has already made steps in this direction by creating its pre-qualified Flexible and Precautionary Credit Lines.

A global financial safety net that allows countries to ramp up borrowing in a crisis may well be needed.   But as lending increases, the G-20 must also work toward creating a fair and transparent sovereign debt workout mechanism.  A neutral insolvency procedure for governments – along the lines of national bankruptcy courts for individuals or corporations – is needed to ensure an orderly and equitable distribution of responsibility for unsustainable sovereign debt burdens.

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Spotlight G-20: The Missing Dimensions for the G-20 in Seoul: Hamlet Without the Prince of Growth

Stephany Griffith-Jones
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Triple Crisis is pleased to welcome Professor Stephany Griffith-Jones, Director of the Financial Markets Program at the Initiative for Policy Dialogue at Columbia University, as a regular contributor.

It seems that currency issues will dominate discussions in the G-20 meetings in Seoul. This is an important subject, but one that is being tackled incorrectly, as Jane D’Arista so clearly sets out in her blog.

The issues of imbalances and exchange rates relate mainly to the pattern of global growth, clearly a significant theme. But far more important in the short term, especially for poorer people both in developed and in developing countries, is to have MORE growth than current policies in developed countries will assure.

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Spotlight G-20: Causes and Consequences of the Currency War between US and China

C.P. Chandrasekhar
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

Triple Crisis blogger C.P. Chandrasekhar was interviewed by Newsclick on the ongoing “currency wars” between the US, China, and other developing countries. This contentious issue will be a priority for many leaders attending this week’s G-20 meetings in Seoul.