Deal with the banks while they are down

Bromley illustration

Economic summits are always more about messaging than substance. In recent days officials have been striving, they say, to “lower expectations” about what this week’s meeting of the Group of 20 leading nations in Pittsburgh might achieve. I had not noticed that expectations were dangerously high. I had supposed they could hardly be lower. Usually this would be no great cause for concern, but 2009 is different.

In many ways, events are following the standard pattern. One of the clearest messages from the first summit of this crisis, in November last year, was the collective commitment to hold back protectionism. Since then, every government has been bending or breaking international rules on subsidies and import barriers to protect jobs. Admittedly, they have shown some restraint, for which one is grateful. But the leaders’ fine words still cloak the classic beggar-thy-neighbour response.

On the very eve of the Pittsburgh summit, Barack Obama’s administration raised tariffs on Chinese tyres. This was probably technically legal under the World Trade Organisation’s “safeguard” procedures. It is protectionism nonetheless, and in plain breach of the earlier commitment, which Mr Obama has repeatedly affirmed. We shall see whether kneeling down to the unions in this case abates the demand for further protection, or stimulates it. My guess is the latter.

The remainder of the article can be read here. Please post comments below.

Clive Crook’s blog

This blog is no longer updated but it remains open as an archive.

I have been the FT's Washington columnist since April 2007. I moved from Britain to the US in 2005 to write for the Atlantic Monthly and the National Journal after 20 years working at the Economist, most recently as deputy editor. I write mainly about the intersection of politics and economics.

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