For Obama, a global rebuke

Discussion in 'Politics' started by Trader666, Nov 17, 2010.

  1. For Obama, a global rebuke
    Mistakes on a foreign trade deal and U.S. currency undermine global trust that the U.S. can lead the way out of this recession
    By The Denver Post
    Posted: 11/17/2010 01:00:00 AM MST

    President Obama meant to repair our nation's reputation on the world stage but instead received a stinging rebuke at last week's Group of 20 meeting in Seoul.

    The end result could mean that many trading partners will begin tossing up barriers to our exports. And if protectionism supplants cooperation worldwide, our global economy is in serious trouble.

    Normally, it would seem like this would be a good time for Obama to redouble his efforts to illustrate to the world that the United States is open for business and is a protector of a free and open marketplace. But it was, in part, his actions that prompted the G20 stalemate.

    World leaders are no longer won over by Obama just being Obama. The novelty has worn off.

    Obama supported the Federal Reserve's recent decision to print $600 billion in new currency to prop up U.S. exports, which led to other countries wagging their fingers at us. And the president bungled a trade deal with South Korea that he had basically ignored for his first two years.

    As Eswar Prasad, a professor of trade policy at Cornell University, told The Associated Press, the stalemate in Seoul may mean "more open conflicts on currency matters. This has the potential to feed into more explicit forms of protectionism, which could set back the global recovery."

    Obama hoped to work with other G20 leaders to pressure China to cease the artificial deflation of its currency, only to arrive in Seoul roundly ridiculed for supporting Fed chief Ben Bernanke's similar treatment of the dollar.

    Many economists warn that governments are taking great risk when they print money in the way that Bernanke ordered. The flood of extra currency weakens the dollar and can lead to runaway inflation.

    Obama insisted the Fed's action wasn't meant "to have an impact on the currency, the dollar," but to "grow the economy." That explanation didn't fly in Seoul.

    Notably, German Chancellor Angela Merkel joined the chorus of criticism of the Fed action. Meanwhile, Germany, which resisted Obama's call for stimulus spending in 2009, is seeing its economy strengthen, making Merkel's critique all the more embarrassing for Obama.

    In other matters, the same Obama who increased fuel-efficiency requirements for cars and trucks sold here at home blamed environmental requirements for exported cars in South Korea for letting a trade deal collapse with that country.

    With unemployment still near 10 percent and unease lingering throughout the country, a strong showing at the G20 could have been Obama's chance to instill more hope that better days were ahead. By his own accounting, Obama's political party received a "shellacking" on Election Day, in no small part because of its handling of policies like the stimulus.

    He needs to heed that message and give the country steady leadership and stability in economic matters during these shaky times. Other nations shouldn't be wondering whether the U.S. will lead the world out of the global recession.

    Read more: For Obama, a global rebuke - The Denver Post