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--By George Mason |
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Ready for the G8? What was once a series of recitals from a string ensemble has turned into a full orchestra with an accompanying choir. The G7/G8 Summit at the Palazzo Ducale, Genoa, Italy, is a serious attempt at genuine global governance from the social democrat side of the leading world economies. For the first time since the G7 meetings began in 1975, the United Nations will be included in some of the meetings as will the World Bank. Selected civil society organizations will be participating as well. The "civil society" segment consists of non-governmental organizations (NGOs), labor and environmental groups. These self-appointed, cross-country organizations (such as Doctors Without Borders) do not represent sovereign states or citizens of one nation but still expect to contribute much to the summit preparations and play a real role in program delivery. The Bush administration will take positions on loans or grants for poor nations and the battle against the pandemics of AIDS/HIV, malaria and tuberculosis. There will be any number of side issues discussed at the ministerial level. The big three topics, however, will be Global Warming, Global Cooling and Super Bully strategies.
Kyoto and Beyond The Kyoto Protocols, said French President Jacques Chirac, represented the first component of authentic global governance. Cherac naturally assumed that Europe would set the terms and dominate that governance, said columnist Lowell Ponte. It would be a way for Europe, with its economies bogged down in the quicksand of socialism and its politics hamstrung by the anti-growth greens, to force the free market nations to carry the same dead weight of economic and political stagnation that is the burden of Europe today. Europe needs, Ponte concludes, something like Kyoto for economic survival and to regain political dominance. o the Euro-romantic, the protocols would create a path to more power and influence. The necessary pollution taxes might even be paid directly to the United Nations and thereafter be administered from Brussels. Global warming would obviously require global governance. Who would be better than French technocrats? For any brand of socialist, the prospect of transferring wealth from private individuals and corporations to the control of governments was beyond exciting. Implementing Kyoto would cause one of the biggest wealth transfers to government in history. Europe could regain its rightful position at the center of the world stage. There is just one problem, however. For Europe to succeed, the United States has to be removed from center stage. That would require the devastation of the American economy - something on the order of a return to the Carter years. Now the dirty little secret of the green movement is that virtually all of their proposals have a devastating impact on the poor. How do you disrupt America while avoiding a backlash from the poor nations? Simple. Exempt them from the rules. Along comes George Bush. He refuses to join the ranks of the deluded. Not only that, his actions may persuade others to throw off the net as well. The Kyoto restoration meetings in Bonn, Germany over the next two weeks will fumble and stumble and shove decisions off until the next meeting in the fall at the COP 7 sessions in Marrakech, Morocco. No politician wants to propose a policy that would create a permanent period of global depression. However, if they can avoid the treaty’s economic impact while blaming George Bush for the impasse, they may survive to run for re-election.
Global Cooling Alan Greenspan, in his mandated twice-yearly appraisal of the economy, noted that the Fed policy of reducing interest rates by 275 basis points over the last six months did not yet show signs of working. Since the first interest rate reduction was just last January 3rd, a time lag of 6-9 months would be considered normal. There is no inflation in sight and energy prices seem to be in decline, he reported. Auto purchases and new home construction are both still strong. Further interest rate cuts might be expected, Greenspan said. In a cautious note, he sided with the view that the third quarter might see the bottom and things would then head up for a positive 2002. For now, price sensitive commodities, including gold, continue to decline. That, said Jack Kemp in the Wall Street Journal, is a signal of ongoing deflation. Kemp represents the minority view than long-term stagflation is possible. That is the anxiety President Bush will hear expressed in Europe. Within the halls of Congress and The White House, a nagging fear haunts the policy makers. The hard truth, Robert Novak points out, is that nothing is being done today that will turn around the economy in the foreseeable future. Politicians of both parties seem oblivious to the problem of insufficient liquidity. Commodity prices are near 15-year lows and there is no rise indicated in commodity futures prices, a sign that Fed policy is still too tight. The Fed-induced economic slowdown that began a year ago has now spread around the world and has rapidly created a synchronized downturn for the first time in a decade. Only China, says The Washington Post, seems to be immune. The U.S. consumer has been the world’s purchaser of last resort. This time, however, there may be no fuel in the tank. The American consumer is heavily in debt. The tech sector has not worked off its inventory yet. The strong dollar makes U.S. products expensive and works against expanded exports. The message that the G-8 takes from this is that the world has become too dependent on the U.S. economy. The fear is that international interdependence has perhaps transmogrified into global contagion. An overly strong dollar and weak exports reduce American growth prospects. American executives are reluctant to make capital investments in the face of falling profits and continued high inventories and over-capacity. The unspoken underlying anxiety is that global economic weakness will boomerang back to the United States, knocking out prospects for a quick rebound and dragging the global economy into recession. When the U.S. unemployment rate exceeds 5.0 percent this fall, all bets are off.
Super Bully Under Marxist analysis, one can only gain at the expense of another. It is both fashionable and politically correct for the left to explain away America’s economic success as coming at the expense of others. The common charge, for example, that the United States has four percent of the world’s population yet produces 20 percent of C02 emissions ignores the fact that the U.S. also produces 25 percent of the world’s economic output. The full facts show that the U.S. produces more than it consumes. Instead, the criticism is framed to look as if an innocent world is being pushed around by a dominant economy – a greedy bully grabbing more than he deserves. It is a strategy being pursued by the countries of Europe as well as Russia and China. The greatest threat to the Atlantic alliance, says Newsweek, comes not from American unilateralism but rather from European disarray and resentment. France and Germany are on different tracks. While they both want to keep their citizens in what Alexis de Tocqueville called "perpetual childhood," France wants to do it European citizen by citizen and Germany wants to do it nation by nation. Much of Europe and all of Russia and China are increasingly defining foreign policy as being different from and opposed to America. They are, Newsweek concludes, finding common ground only in their shared resentment over living in an American (and therefore capitalist) world. The current issue that brings Super Bully resentment into focus is missile defense. The momentum lies with the Bush administration by virtue of a successful preliminary test. Starting nearly 5,000 miles apart, a 120-pound robot destroyed an object the size of a garbage can 144 miles up in space when both were traveling at a combined speed of 16,200 miles per hour. As columnist Rich Lowry notes, if missile defenses weren’t caught up in partisan politics, they would be regarded as one of the great technological adventures of the age. The United States has the scientific and technical brilliance to thwart missile blackmail from China or anyone else. With some 31 nations now having missile capability, it will no longer be acceptable U.S. policy to remain completely vulnerable to missile attack as the 1972 Anti Ballistic Missile Treaty mandates. Mutually Assured Destruction (MAD) is not enough. A credible, multi-layered missile defense will save lives and avoid incomprehensible destruction .The other word for MAD, after all, is revenge. For our allies, it may turn out that the United States is the one who saves them from the bully of nuclear blackmail. Europe and the Middle East aren’t all that far apart as the crow, or missile, flies.
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