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17 responses to “Open G20 thread”

  1. Kim

    PS: Amartya Sen on the various models of capitalism and thinking about capitalism is also worth reading for a bit of contextual background.

  2. Ilya

    I do not hold out many hopes. I find it strange that the focus of the G20 has at least partially shifted from the immediate situation at hand (i.e. addressing job losses and bank re-capitalisation) to political and ideological issues. For instance, the question of IMF voting rights is not relevant to either the direct causes of the crisis nor will recognising China as more of a major player will add or detract to our ability to weather the crisis in near term: it is purely a question of political power. This is an interesting issue but not of immediate importance. The stimulus questions are more relevant and they look like being either side-tracked or forming the basis for political jockeying instead of concentrating on the costs and benefits. In other words, the summit is running dangerously close to putting the political horse behind the global economic cart.

  3. Kim

    For instance, the question of IMF voting rights is not relevant to either the direct causes of the crisis nor will recognising China as more of a major player will add or detract to our ability to weather the crisis in near term: it is purely a question of political power.

    Well, it’s an immediate question for two reasons:

    (a) The limited ability of Western nations to fund IMF loans to less developed countries;

    (b) The need for Chinese financing of voraciously increasing Western sovereign debt.

  4. Ilya

    Kim, I don’t think Chinese cooperation can be expected in return for not much more than IMF voting rights. This is a side show.

    Unfortunately, developing countries are not a particular concern either, for the Chinese or the developed economies, and will get shafted yet again.

    China is interested in three questions with regard to them funding Western debt: (1) whether the West is amenable to China investing its savings in Western strategic assets (rather than Treasuries); and (2) whether the so-called global imbalances can be preserved until the Chinese re-orient its economy towards a better balance between exports vis-a-vis domestic demand; (3) ensuring that to the extent they are in fact having to fund the West, the West is not insolvent. In that order I suspect.

  5. MH

    (b) The need for Chinese financing of voraciously increasing Western sovereign debt.

    I am not an economist, but my understanding is that China doesn’t finance Western debt in a way that really empowers China. Because the USD is the defacto global currency, China, and every other country are compelled to “recycle” US Treasury Bonds in order to stop their own currencies appreciating so much against the dollar that they can no longer compete, which is not an option for China as it is trying to produce (and export) its way out of its own mess when the world already has production over-capacity. But, I am not an economist.

  6. Nickws

    MH, there’s also the little factor of America being China’s biggest client for goods. And a developing economy that doesn’t have a great immune system when it comes to protection from US induced recessions. Now Japan, who has almost as many T-bonds as China, their response to all this should be from a position of strength… Not that I have any qualifications in this area, either.

    Time to start boning up on Keynes’ Bretton Woods campaign. Anyone read Skidelsky’s Fighting for Britain?

  7. Kim

    whether the West is amenable to China investing its savings in Western strategic assets (rather than Treasuries)

    Yes, good point, Ilya, and a question Wayne Swan seems to be equivocating on at the moment.

  8. Kim
  9. Nabakov

    I suspect the real discussions in London, behind the scenes in the many cosy and private venues that that city does so well for such discussions, will revolve around the fact that the combination of globalisation, the internet and the GFC has now led to the populaces they represent realising that capitalism is basically a tool and not an ideology. And that lately it’s been wielded by corporatist idiots who’ve never had to risk their own capital. Like babies with hammers who think the world is made of nails.

    Then over the Cockburn’s Special Reserve, the real discussions will lead to “how the hell can I ditch my Minister and find a bolt hole in a nice international Qango?”.

  10. Kim

    Update: Planet MoneyG19: France says it may walk:

    The U.S. and the U.K. want a global stimulus package, with British Prime Minister Gordon Brown calling for a “global new deal.” Other European Union members say they’re doing enough to stimulate the economy already. They want strict new rules to regulate the financial system. Now French President Nicolas Sarkozy says he won’t sign on to any agreement that lacks a strong global regulator.

  11. Thoma Paine

    Well with some news that will at least see some fairer and clearer reporting of events like the G20 and China on the ABC.

    [Rudd puts stamp on ABC board with two appointments]
    http://www.theage.com.au/national/rudd-puts-stamp-on-abc-board-with-two-appointments-20090331-9ib1.html?page=-1

    [Julianne Schultz is the editor of Griffith REVIEW and a professor in the Centre for Public Culture and Ideas at Griffith University. She has written extensively about the media and is the author of Reviving the Fourth Estate: Democracy, accountability and the media (Cambridge University Press, 1998), Steel City Blues (Penguin, 1985) and the librettos Black River and Going into Shadows.]
    http://www.abc.net.au/unleashed/stories/s2222596.htm

  12. MH

    A solid analysis on many of these themes here from the ECFR

    http://ecfr.eu/content/entry/commentary_china_analysis/

  13. Down and Out of Sài Gòn
  14. Mervyn Langford

    Kim @ 8: I suppose you keep a good eye on alternet dot org as well – mountains of very illuminating stuff. The thing that really worries me is the amount of anger that is generating out there and (certainly in the US), the preparations being taken to cope with mass civil unrest. People, angry at being railroaded (harder and faster) and made destitute and with society comprehensively being driven into such massive debt (to prop up those almost universally seen as the cause of the meltdown), are not likely to camp in their cars and burnt out squats quietly.
    The aweful truth is that extreme right always does better in times of economic catastrophy.
    And we in Oz too have a long and sullied history of nasty right wing and racist politics that enjoy an outing every now and then. Those who feel they have missed out on what they view as their due, like to blame others. The worse off they are, the more likely they are too be manipulated and to want to take revenge.
    And then of course, Mother Nature is yet to start to show her hand, calling in her due.
    We can print all the money we like and juggle the consequences of our symbolic monetary system with “stimulus packages”, “New Deals” or whatever – but without Mother Nature on side this becomes an increasingly ridiculous sideshow.

  15. Paul Burns

    Does anyone else think standing up for morality and trying to rescue capitalism is sort of contradictory? (Might one say oxymoronic?) And if we see this, how come Rudd and Brown can’t?

  16. daggett

    Here’s a great story, which is getting not coverage in the English newsmedia as far as I can tell:

    French Caterpillar workers detain management on-site since Tuesday

    Instead of lying down and allowing the managers to proceed with their plans to sack 733 out of 2,006 workers, they have occupied the factory and detained their managers.

    This is definitely an example that the Australian corporate newsmedia won’t want Australian workers to follow.

  17. joe2

    The Guardian footage shows Ian Tomlinson, who was said to have died from natural causes, attacked from behind by baton-wielding police.
    http://www.guardian.co.uk/