The G20 brings us a piece of paper in our time

Globalism, it seems, is in need of some  “indicative guidelines”. At the latest G20 jamboree, these guidelines are being ‘scoped out’. When the scoping is done, the guidelines will be ‘monitored’.

“We made some concrete progress,” said Lael Brainard, spectacularly named under-secretary for international affairs at the US Treasury,  hailing the set of indicative guidelines as a “nice step forward”. Personally, I think hailing a nice step is a bit, you know, lavish: announcing a nice step would be more down to earth – although even that may yet prove to have been unwise.

The new system of guidelines will be applied to all G20 members, big or small. Monitoring will then establish what the actions of each nation State indicate. Then, we must presume, something else will happen. But the G20 hasn’t got that far yet. Let’s not run before we can walk, here.

However, there are seven countries where there will be a second-stage of monitoring. An impenetrable press release told the media corps that this is to “reflect the greater potential for spillover effects from larger economies”, perhaps suggesting that Greek and Irish spillovers have been entirely benign.

Last Friday, only five lucky States had been drawn from the hat – the US, China, Japan, Germany and France – but yesterday Christine LaGarde said that Brazil and India had also made it through. But there was still no sign of the monitoring deliverables, as they say in consultancy circles.

The Herald Star online said prodding would be involved – hinting darkly that the IMF would be doing it. But the IMF has been prodding plucky Hungary for the last three years, to negligible effect.

Mme Lagarde wasn’t concerned with such details. She confined herself to what the monitoring would involve, viz:

• estimating what a country’s imbalances should look like using economic models specific to that country
• looking at a country’s imbalances in terms of their national historical trends
• comparing a country’s imbalances with groups of similar countries
• comparing a country’s imbalances with the full G20.

While now clear that the focus will be on the imbalances issue, I remained light on the what-the-hell-is-this-going-to-achieve question; and there was still no sign of what anyone brave enough might do if the imbalances didn’t (a) fit the models (b) accord with history (c) look like similar imbalances elsewhere or (d) fall in line with the other nineteen G20 nations. They won’t, of course: I know this, you know this, and the G20 know this. It’s an ongoing ‘don’t mention the war’ situation.

So it fell to Russian Finance Minister Alexei Kudrin (who presumably has nothing to lose) to inform journalists that “a key remaining question will be whether we make the monitoring mandatory, and have sanctions for failure to address imbalances in a timely fashion”. Or not, I think you probably meant to add there, Alexei.

——————————————-

Christine Lagarde is an idiot. We all began to notice this during the early part of 2010, when she appeared to suggest that France’s annual growth rate was simply a matter of adding together the four quarters involved. Later on in the autumn, she confirmed the diagnosis by announcing, “there will be an [EU] stress test for the banks, and then the world will see all is OK, and then the crisis will be over.”

So that’s her excuse, but it’s hard to see why and how the other attendees at this junket can look the world in the face after coming up with unadulterated piffle like this. And – I have to add – it is incredible that serious newspapers take all this bollocks down and then duly print it with great solemnity. ‘G20 poised to strike on global imbalances‘ said the FT. The G20 isn’t ‘poised’ to so much as strike a match.

It was like this when Neville Chamberlain came back from Germany in 1938, to announce that there would be no war again ever. And no more Czechoslovakia either. ‘Prime Minister brings home peace for our time’ led the pro-appeasement Times. ‘German peace-troops to effect orderly Sudeten takeover’ splashed the Daily Express. People will believe any old crap when they’re scared. Governments are scared of bankers. Citizens are scared for their jobs. Everyone’s scared of China. And nobody knows what to do about American debt.

I wonder how long the G20 think it’s going to take all these economics graduates, modellers and maths nerds to do all four calculations for twenty countries, prior to doing the whole thing again – only, in some mysterious way, more so – for the seven biggest? Perhaps I’m being unfair to hurry them on this question, but lets just summarise how the score stands in this final quarter of the game called globalism.

Consumer prices in China increased 5.4 per cent year-on-year in March – their biggest jump since July 2008. Headline inflation in India, meanwhile, rose to almost 9 per cent in March, compared with 8.3 per cent in February. All the other key emerging markets are overheating. America has a $13 trillion debt and an economy recovering…..up to but not including job creation. It hasn’t even tried to reduce its deficit yet: at least the UK has tried (but to date failed) and it too has a flatlining economy. Without China to consume its mineral deposits, Australia is a flying doctor short of an engine.

Yesterday the New York Times came out and stated the inevitable: the markets are starting to give their own notional values to the euros of, say, Ireland and Portugal on the one hand, and those of Germany and France on the other. The paper warned observers ‘to track the risk of a new financial crisis [by focusing] on whether the troubled euro zone economies are seeing bank runs and capital flight’. It concluded that both Portugal and Ireland are – a finding that reflects precisely what two key opinion leaders told The Slog earlier last week.

Christine Lagarde is supposed to be a leading light in the eurozone’s economic and fiscal uberbau. Her prized EU baby is turning blue. Mr Kudrin’s homeland is run by a homo-erotic, gun-toting former KGB megalomaniac, and controlled by a viciously selfish crew of industrial gangsters, mafia gangs and stock market blaggers. Mr Brainard’s USA has states cancelling pensions and filing for bankruptcy, and a Government almost  unable to function financially. And Chinese finance minister Xie Xuren is allegedly in charge of 300 billion people, all of whom want their own flat at the same time – that time being right now. “Despite the most aggressive period of tightening in years, the Chinese government cannot seem to slow the economy down,” said Alistair Thornton, an economist at IHS Global Insight.

And the IMF?  Dominique Strauss-Kahn doesn’t have enough money to bail out a public park motor boat, let alone go poking the planet’s seven biggest countries in the eye.

But there they are, yet again – this freeloading, clueless elite – on another jolly to exchange platitudes, draft releases, and spout gibberish about taking nice steps in concrete to monitor indicative spillover outcome potentials. Compared to this lot, Neville Chamberlain’s ability to get Hitler’s autograph at Berchtesgaden was an historic victory for tough, practical diplomacy.