It was all very nice wasn’t it? Seeing the worlds leaders rub shoulders with one another, seeing Brown playing host and not cocking it up as much as I had suspected, seeing the Queen being warmly embraced by Barack and Michelle Obama, who was clearly unaware of protocol when she place her hand on the Queen’s back and pulled her in for a hug, (although Her Majesty clearly did not mind as she responded in kind) so all in all it was a very nice spectacle. But I have a sneaky suspicion thats all it was; a spectacle and a bloody expensive one at that. I don’t know about the rest of you but I find the idea that we have just funded a multi million pound conference, which naturally drew huge protests incurring yet more disruption and cleanup cost to the capital, in the middle of a recession a tad bit irritating.
So what have we got out of it all? Well the photos are for keeps thats for sure. It also gave the leaders of the world a chance to get to know the Obama’s and certainly gave Brown his much sought after ego rub to be seen as the Saviour of the World alongside the Chosen One. But what will this summit really achieve? I suppose we are all meant to look on in awe at todays announcement that a deal has been reached between the supposedly irreconcilable leaders of the world, although I always suspected that the chasm between them was being over stated purely for political purposes, so that when they finally did come together the citizens of the world would be overwhelmed by the leaders’ brilliance. However the truth is what sane politician would look at what is happening in the world financial system and think something didn’t need to change? What credible politician would not look at the reckless action of the banks over recent years and think ‘we need more regulation’? There was more of an agreement that change was needed in the financial system than we were led to believe at times.
Furthermore lets call a spade a spade… all this talk of reforming hedgefunds, bonuses, tax havens etc… what is that going to do to help economic recovery today? Oh yes it all sounds very good; lets squeeze the rich a bit more and deny them tax havens, everyone (apart from the rich) likes to hear that during a recession when times are tough. But the question remains how are such measures really going to help the recession as it stands now? How is it going to help the British, the American, the German, the French taxpayer struggling to keep their home and struggling to get a job? The truth is it won’t. It’ll just stop the rich getting richer. So what else have the leaders got to tout about?… ah yes… the £500bn donation to the IMF. Well theres not much that needs to be congratulated there either as that was effectively agreed at the finance ministers’ summit last month, and has merely been held back in case the rest of the summit was a complete disaster, although having said this more money to the IMF is certainly required and a positive step forward…who knows we might have to go to it ourselves in the near future!
The biggest problem that came out of this summit and the pink elephant in the room that few seem to be noticing is the fact that the leaders have failed to come up with a solution for disposing of banks’ toxic assets which continue to impede a recovery. Until this question is settled no matter how much money is donated to the IMF, no matter how close and eye we keep on hedgefunds and bonuses and no matter how much we regulate and restrict tax havens the recession will continue, get worse until the question is solved and then we can begin more speedy recovery. One thing that is for sure however is that the age of Margaret Thatcher and Ronald Reagan style economics is over. It has served us well and provided up to present unprecedented stability and growth, reversing the 30 year slump that preceeded it, but as Jim Callaghan once said “every 30 or so years there is a sea change in politics” such a sea change is occuring. It remains to be seen whether it is one for the better.