The players at the G-20 summit have opened the curtain on Act 1.
First we have Japanese Prime Minister Taro Aso. He holds the position that a strong stimulus program is the only means to pull Europe and the world out of the current crisis. He cited Japan's experience in the 1990s when Japan used a strong stimulus as a way to stimulate growth. He also cited Japan's current stimulus package, which amounts to $720 billion, and he even said that Japan would discuss further stimulus if the need arises.
Standing in opposition is German Chancellor Angela Merkel. She is firmly opposed to more stimulus and demands to know why it is needed. She believes that excessive public spending will not assure a vital recovery.
President Obama, while in favor of a stronger stimulus program, is trying to bring all sides together to recognize the need to move boldly forward.
How all of this plays out is anyone's guess. What we have is a group of extremely powerful players, each one wanting to foster his/her agenda. Let's hope they can work together.
Do you believe anything meaningful will be accomplished?
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Reader Comments (Page 1 of 1)
4-01-2009 @ 1:07PM
joe soule said...
The Germans are closer than Obama or the Japanese. I don't think the French position is useful at this time - maybe later.
4-01-2009 @ 2:01PM
Iridium said...
The point is you can't make money out of thin air. That is what any stimulus plan amounts to.
Japan was only pulled out of its lost decade due to the incompetence of American industry. As Honda, Toyota, Nissan, and Sony trounced American competitors they allowed the Japanese economy to come roaring back. It also was helped by a low value Yen which supported massive exports.
France actually has the best idea. A radical overhaul of the system. The problem is France would overhaul the system in the wrong way. They would increase government intervention.
The problem with the world's economic system is that it is fundamentally based on the transfer of debt, not the generation of income. It is nearly impossible for a corporation to produce product and make money selling through the national retail system.
The system is so skewed toward selling common stock vs selling actual product that it makes no sense to actually make product. Product sales are just a means to an end to prop up share prices.
There is no benefit to being a private corporation unless you are a secretive hedge fund playing the system.
The only solution is to destroy the stock market system and close every exchange in the world. We must return to a real free market system where the only way to make a profit is to create and sell a good or service people want. The publicly traded corporation has destroyed the world economy.
We must also return to the gold standard to back up our monetary notes with a hard asset that doesn't fluctuate in value every minute of the day.
We are witnessing the complete collapse of a system that rewards manipulation and fraud over the ethical pursuit of profit.
4-01-2009 @ 2:50PM
janice skorupa said...
Germany is right on the button. What's the point? France-they are only concerned about themselves-ignore them. The US-we are only stimulating the auto industry and financial institutions. It's worthless., because it is not trickling down to the American people. We are the ones who make the economy move. We spend the money. We buy and sell the homes. We bank the money. We take the loans. We don't have the money ...we can't do it. And that's the way it is.