Instead of spewing meaningless garbage about global imbalances, the G20 should save itself the trouble and focus on things it can actually achieve, according to our readers. (I’m paraphrasing; they actually just said No in answer to the question: Is the G20 right to focus on global trade imbalances?)
Who knows what our readers really meant, but it seems reasonable to suppose that they view the G20’s efforts as ineffective, rather than fundamentally misdirected. Global trade imbalances are a real and serious problem, as most central bankers agree, but the G20 group of nations is probably not the right body to do anything about them.
Last week’s so-called agreement was actually an agreement to work on an agreement, which will in fact not be an agreement so much as a set of “indicative guidelines” aimed primarily at forcing the Chinese to appreciate their currency, without specifically mentioning exchange rates. Or China.
It is certainly noble for the G20 to try to fix the global economy’s most fundamental problem, but it might be a bit of a stretch. After all, the global economy got into the current mess when there were just eight rich countries running things – and those guys hardly disagreed about anything. With 20 countries sitting at the table, half of them vehemently opposed to the other half, the chances of a good outcome seem low.
Frankly, they probably have a better chance of fixing the environment, and perhaps that’s a better topic for them to focus on. We can all agree that China should be in charge of making electric cars and windmills. Oh, and solar panels too. And America can be in charge of buying them. The Japanese can do all our recycling (or at least sort it into the right bins) and the French can do nuclear power, and that should just about fix things.
As for trade imbalances, the nub of the problem is that Americans over-spend and the Chinese over-save, which is ironic because anyone who’s been to Macau would scarcely believe that the world’s biggest challenge is persuading the Chinese to put a bet on themselves. Interesting times indeed.
Overall, our readers were far from decisive on last week’s poll question, with 56% reckoning that the G20 is wrong to focus on trade imbalances and the remaining 44% in support. It’s a tough call.
