G20 Machine Works !!

The conference last weekend outside London of finance officials from the Group of 20 nations, followed this week by a Brussels summit of European Union leaders, are the latest benchmark events in the international financial crisis and recession.
Advanced telecommunications and computers greatly accelerate the speed and scope of transactions, giving the financial meltdown unprecedented scope. The recession is as old as capitalism, following classic patterns of drastically declining demand.
As with the G-20 summit in Washington last November, immediate media reactions include criticism of general statements, along with emphasis on the gulf between Washington pressure for fiscal stimulus and continental European caution about escalating government spending.
Such customary carping is unfair, since the England event involved finance officials whose main task was to set the stage and agenda for the next formal summit of G-20 leaders, scheduled for London in early April. One very promising byproduct of the conference is the decision by Director-General Pascal Lamy of the World Trade Organization to attend the next G-20 summit. He did not attend the Washington summit. Another positive sign is agreement in Brussels on coordinated policy positions, which emphasize expanded market regulations.
Current conferences represent a notable increase of national participants. In the more stable past, such meetings focused on the G-7, the sizable economically highly developed nations of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. In recent years, Russia has also been included, reflecting geographic proximity, military power and natural resources rather than comparable economic development.
Expanded emphasis on the G-20 indicates consensus that a very small group of nations can no longer effectively lead the global economy. Brazil, China, India and other developing nations are rapidly evolving into major manufacturing powers, along with traditional roles as important suppliers of raw materials and other natural resources.
Ultimately, these collective efforts will succeed or fail on political as well as economic grounds. Sensible skillful civil servants can address and negotiate details, but politicians at the top must persuade their national electorates to resist protectionism, continue to pursue relatively open commerce and investment, and accept international regulations.
The United Nations, including agencies for global economic cooperation and development, reflects the joint vision of British Prime Minister Winston Churchill and U.S. President Franklin D. Roosevelt. Their declaration advocating the world body capped a summit off Newfoundland Canada in August 1941, early in World War II, a very desperate time for beleaguered Allied forces. This was a particularly dramatic as well as important demonstration of the basic reality that global intergovernmental economic cooperation essentially depends on effective national political leadership.
During President Roosevelt’s funeral procession in Washington in the spring of 1945, a reporter asked a workingman in the very large crowd along the sidewalks why he came to the event. The man replied that he did not know President Roosevelt, “but he knew me.”
In both the Great Depression and a great war, FDR maintained a remarkable capacity to communicate very effectively and persuasively with the American people as a whole. Churchill did the same in Britain during the war years.
Our contemporary economic challenges remain considerably more manageable than those confronting our leaders in the 1940s. President Barack Obama, British Prime Minister Gordon Brown and the other leaders involved bear the responsibility to demonstrate the political skill to make vital economic initiatives work.
Arthur I. Cyr is Clausen Distinguished Professor at Carthage College and author of ‘After the Cold War’ (NYU Press and Macmillan/Palgrave). He can be reached at acyr@carthage.edu