Monday, March 30, 2009

Still Time to Cancel the G20 Summit

Subject of an interview on the World Tonight on CHQR Radio

It has already started. The lowering of expectations for the G20 summit, which takes place over just seven hours this week at a cost of around $31 million an hour. The Toronto Star notes today that, instead of a consensus on the need to open their wallets, “the G20 leaders – including Canadian Prime Minister Stephen Harper – are expected to agree on the importance of avoiding trade protectionism, increasing support for developing nations battered by the recession and coordinating international efforts to tighten regulation of banks and investment houses”. In other words, a replica of the meeting of the G20 held last November.

Gordon Brown, who has staked his political future on this summit, is the biggest loser. He has been wandering in the wilderness of Latin America, the US and Europe trying to persuade attendees to spend more and tax less and has been rebuffed by all. The German Chancellor, Angela Merkel, has firmly put him in his place as has the Governor of the Bank of England.

Someone has to pay for all of this debt and it will lead to less government (just when the UN has published its agenda for Copenhagen’s climate change summit in December which seeks the largest range of government intervention on a global scale in the history of the planet), more taxation and more poverty.

What is also the case is that someone has to lend the money to fuel the spending and support the debt. Everyone looks to China, but they signaled last week that they weren’t too sure how much more debt they want to buy. George Soros, not exactly Britain’s friend and an unlikely guru, has suggested that the G20 better be good since otherwise supporting debt will get more difficult. In this he is right. The failure of the UK to secure buyers for its debt (other than banks fully owned by the Government) was a signal last week.

I suspect the only new thing the G20 will discuss is the ending of tax havens – Cayman Islands, Bermuda etc. Big deal. This will make a massive difference to Ethel and Jo Public who, wondering where their next slice of bread was going to come from, were also pondering whether to deposit their fuel allowance in an offshore account.

So I still say it’s not too late to cancel the G20 summit – save us all a lot of air time, nonsense and posing.

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