September 27, 2009
Global strife pushed economic concerns off the table at a press conference in Pittsburgh, despite President Barack Obama's opening remarks.
Obama certainly set the table, using the Group of 20 conference to reveal an allegedly secret facility in Iran that the president said pointed to suspicious nuclear intentions.
Good question if you're from Pittsburgh or anywhere else. What about the little people -- the people out in the street?
Ironically, if they (the protesters) had been paying attention to what was taking place inside the summit itself, what they would have heard was a strong recognition from the most diverse collection of leaders in history that it is important to make sure that the market is working for ordinary people, Obama said.
Even sophisticated critics dismissed the accords reached in Pittsburgh as lacking enforcement capabilities. Be that as it may, the agreements are still political bear traps. Someday down the road, participants can point to Pittsburgh as a starting point, if nothing else.
What happened in Pittsburgh? Leaders agreed the G20 summit had effectively surpassed the Group of Eight in importance as an economic forum, a recognition of reality -- nothing new, said Peter Morici, professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission.
More than that, the announcement is a clear recognition that emerging economies -- Brazil, Russia, India and China -- required more clout on the international stage. The old boy's club, Europe and the United States, may continue to dig in their heels on policy debates in the future, but Pittsburgh still represents a public concession that times have changed.
World leaders agreed that banks would require more capital, in theory requiring banks put enough aside for a rainy day so future bailouts come from their own reserves, rather than from governments.
That's why we've agreed on a strong set of reforms. We will bring more transparency to the derivatives market. And we will strengthen national capital standards, so that banks can withstand losses and pay for their own risks, Obama said.
G20 leaders agreed to
tie executive pay to long-term performance, Obama said. In addition, leaders agreed to phase out government subsidies for fossil fuels. That's a critical step in the platform U.S. leaders brought to the table, which is the concern that emerging rough riders -- Brazil, Russia, India, China -- have become the profitable manufacturing centers for the behemoths of old -- the United States and Europe -- where spending drives the economy.
Just so much noise? Look for a reaction in the markets and out on the streets. Symbolically, keep an eye on Pittsburgh, a union stronghold, trying to redefine itself in modern times.