Gee whiz, here comes that G20 again. Finance ministers and central bankers from the Group of 20 principal economic powers have just met in Gyeongju, South Korea, for detailed advance work for the November summit of heads of member governments in Seoul.
This latest gathering of finance gurus has occurred as the United States dollar slides against other currencies, fiscal and payment deficits continue to balloon, and financial services firms remain mired in mortgage foreclosure review misbehavior.
From a more personal perspectives in the United States, unemployment persists unacceptably high near 10 percent, individual private debt remains a heavy collective burden, and political rhetoric escalates emotionally just before the November elections.
Who cares about a gathering of government big shots who dwell in a world removed from the average person?
The answer is you should care, for several central reasons.
Today, actions taken by these officials have profound lasting impacts on the majority of the population of the world. National finance ministries manage international policy machinery, which is proving to be remarkably effective, and this system long-term has undeniably promoted both global economic prosperity and international political stability.
That translates into a better, more secure life for most people. The many who have lost money and lost jobs in the recession have better odds to regain economic ground, and recover sooner, because of this relatively stable underlying foundation.
In one sense, the G20 is coming home again through the Korea meetings. The international financial organization was established in 1999, spurred by the Asia financial crisis of 1997. In that experience, the sudden collapse of the Thai currency spread like a financial gasoline fire throughout the enormous Pacific region.
Rapid response by policy leaders, led by the United States, mobilized public and private liquid capital to relieve nearly disastrous financial pressures on the Asia economies. U.S. Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin deserve credit for working effectively with President Bill Clinton to calm that earlier crisis.
South Korea was badly hurt by the events of 1997, thanks to excessive financial speculation in the run-up to the crisis. By contrast, the enormous rapidly emerging economy of China, and the sizable relatively sheltered mature economy of Japan, in that context provided useful stabilizing influence.
Japan was a participant in the then-central G7 organization of economically advanced nations. The successor G20 has provided a wider arena to include China, along with Brazil, India and other rapidly industrializing large economies of the world.
The fact that worldwide very poor people are becoming prosperous is good news for everyone. They represent new competitors in the global economy, but also potential new consumers of our products and partners in our investment efforts. Wars are on balance less likely.
President Barack Obama shrewdly picked Pittsburgh as the site for the fall 2009 G20 summit. In the 1980s, that city personified economic decline, as domestic steel manufacturing faded and unemployment approached 20 percent. Sustained high-tech investment has turned that around.
At the 2009 summit, Bill Gates of Microsoft dedicated a new computer science complex at Carnegie-Mellon University. Apple, Disney, Google and Intel are some of the other recent investors in the city.
We've learned through the terrible 20th century experiences that protectionism is ultimately self-defeating, nationalism is dangerous, and there is no substitute for market competition. The G20 provides a workable means of implementing this understanding.
Arthur I. Cyr is Clausen Distinguished Professor at Carthage College. E-mail him at email@example.com