I am in Pittsburgh for the G20. The big issues here are,
- Economic restructuring to prevent another collapse, including regulation of banks, with banker pay a key component of what other countries are identifying as a problem,
- Trade imbalances,
- Climate,
- Jobs, and
- Jobs.
- And jobs.
On trade imbalances, CAF’s Eric Lotke points out in today’s G-20 Facts: Accounts out of Balance just how much a rebalancing of trade is needed,
What stands out is the size of America’s trade deficit. In 2008, we ran a trade deficit of over $550 billion with G-20 nations (plus another $180 billion with OPEC).
That is a huge, huge trade imbalance and we not only can’t keep it up year after year, we shouldn’t be allowing it for even a single year.
However, other countries want us to clean up our Wall Street act before we start cutting our imports. The huge compensation that the Wall Street banksters pay themselves is identified as one cause of the financial crisis because it encouraged these executives to take extreme risks. This is primarily a U.S. problem, but is causing problems for the world: Study Shows U.S.Bank CEO Pay Dwarfs Rest of World
You wouldn’t know it by his pay stubs, but Jiang Jianqing heads the world’s largest bank.
Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That’s less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world’s fourth-largest bank, JPMorgan Chase & Co
. . . Excessive compensation at banks is expected to be discussed this week when the Group of 20 nations meets in Pittsburgh. But consensus on the issue remains a distant hope as there continue to be vast differences in how bankers are paid, from the CEO on down.
[. . .] “These kinds of figures undercut the main argument by the U.S. financial industry lobby that they will lose top talent to competitors in Europe or Asia,” Anderson said.
Germany’s Merkel says the cleanup of Wall Street must come before rebalancing trade. Merkel to G20: regulation before rebalancing,
German Chancellor Angela Merkel warned on Thursday a U.S. drive to rebalance the global economy risked distracting the Group of 20 from a more urgent need for market regulation at their Pittsburgh summit.
[. . .] She stressed that the G20 — which groups big Western economies with emerging powers such as China and Brazil — should not shy away from measures that might prove unpopular with the banking industry, where the economic crisis began.
Also, France’s Sarkozy. Sarkozy walkout threats at G-20, reports say
French President Nicolas Sarkozy wants a “real transformation” of international financial regulations out of this week’s G-20 summit in London, a spokesman said Tuesday amid reports that Sarkozy will walk out of the gathering if he’s not satisfied.
. . . Levitte said Sarkozy wants to see “better rules, stronger rules” governing international commerce. That would include monitoring bonuses and salaries of financiers, overseeing accounting of major institutions and better monitoring of countries where corporations are able to establish home offices to avoid paying taxes in G-20 nations.
Meanwhile, John Nichols at The Nation thinks all of this misses the point. He writes in G20 Schemes Threaten Democracy, Sustainability,
The thing to remember is that, in the world of the global economic elites, “sustainable” has a different meaning than in does at a Friends of the Earth rally or the local farmers’ market.
The high fliers at the G-20 want to manage international trade and competition in a manner that keeps banks and corporations on steady growth trajectories – no matter what that means for working families, small farmers and the poor of the planet. In other words, they’re talking about sustaining status-quo economics.
Nichols’ piece gets into something I have been reading about elsewhere as well. If we just value GDP growth as our indicator of economic well-being, then our solutions will of course favor GDP groth even when it doesn’t mean jobs for people, or protection of the environment. Let’s stop just thinking of growth as the be-all-and-end-all.
Nichols, this time in Moving beyond GDP as well-being’s metric,
But even more important [than fixing bankster pay levels] will be the French president’s push to “revolutionize” international definitions of development, progress and achievement.
In recent decades, those measures have pretty much begun and ended with the bottom-line details of economic growth and wealth accumulation.
But Sarkozy says he wants to use the G-20 gathering as the launching point for a “fight” against what he describes as the “cult of figures” and the “cult of the market.”
“A great revolution is waiting for us. For years, people said that finance was a formidable creator of wealth, only to discover one day that it accumulated so many risks that the world almost plunged into chaos,” argues the French leader. “The crisis doesn’t only make us free to imagine other models, another future, another world. It obliges us to do so.”
. . . The report from France’s Commission on the Measurement of Economic Performance and Social Progress proposes a global “statistical system which goes beyond commercial activity to measure personal well-being.”
That’s what Sarkozy will be talking about in Pittsburgh as the G-20 gathers.
Please take the time to read that last article about moving beyond just measuring GDP and into measuring sustainability, personal well-being, and “life, liberty and the pursuit of happiness.”
