Risk Rap

Rapping About a World at Risk

G20 Mulls State of the Globe

The leaders representing the largest world economies will sit down this weekend to plot some strategies to deal with the global economic crisis. The challenges confronting this group is extensive and vast. Inflation, deflation, credit markets, energy prices, political stability, capital markets, exchange rates, balance of trade, and the slowing growth of the world economies are problems that will require more then a weekend meeting to solve. The Economist Magazine has some thoughtful insights into the extent and depth of the problems, some possible solutions and potential roadblocks to implementing them.

One point The Economist raised for consideration is the conflict between the global reach of capital market institutions and the national based sovereign regulatory bodies that are responsible for governance and oversight. This glaring challenge came to light last month in the EU when national banking governors were forced to enact national solutions to Pan Euro Zone banking problems. Regulators are concerned that savvy global banking institutions will engage in a type of regulatory arbitrage to skirt national governance laws. The global banking system has surpassed the constraints of national regulatory laws and it is a principal challenge that the G20 must address. Indeed during the height of the credit crisis national regulators were hard pressed to explain why it was in the best interest of the countries taxpayers to bail out foreign banks and to share credit facilities with other central banks repo desks. The supranational nature of our economic and political institutions is a difficult pill for some to swallow. Country Firsters will certainly use this as an opportunity to beat the isolationist and nationalist drum.

This G20 meeting is likened to the Bretton Woods agreement that adopted fixed currency exchange rate and formed the IMF and IDRB. These initiatives foreshadowed the Marshall Plan and were key to the ascendancy of American economic dominance in the post WW2 era. Though many are playing down the similarities of the two events this meeting comes at a time when the American economic colossus has lost its groove and whose preeminence is now being challenged by the EU, China and a slew of Third World confederates that are demanding more equitable distribution of world resource and a chance at sustainable economic development.

The conference is certain to adopt some classic Keynesian solutions to stimulate growth. Indeed the activist interventionist actions the world central bankers have employed to deal with the crisis, like the TARP will become more widespread. This will certainly raise the debate about protecting the sanctity of free market capitalism against the creeping socialism advocated by the proponents of the Keynesian approach to stimulate growth. Here it is necessary to remember that this is not about an ideological debate concerning the righteousness of conservative or liberal political dogmas. The global economic crisis is real and it is creating political instability and economic hardship across the globe. For many in the Third World this crisis has acutely spiked their struggle for survival as the barest subsistence levels are not being met.

As the G20 makes the big decisions to patch the broken world economy we believe that the real business of the G20 should be a careful examination and implementation of the Millennium Development Goals.

The Millennium Development Goals provide an opportunity for the world leaders to unite behind a program that promises to offer the potential of long term sustainable growth, prosperity, peace and a commitment to our shared humanity and respect for life. This I believe is the the real business that the G20 men and women need to address this weekend.

You Tube Video: Charlie Chaplin, Great Dictator Globe Scene

You Tube Music: Bob Marley and the Wailers: One Love/People Get Ready

Risk: global economy, sustainable development, political stability, peace

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November 15, 2008 - Posted by | Bush, economics, jazz, Millennium Development Goals, politics | , , , , , , , , ,

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