The G20 meeting in London has a topic: Fixing the world economy. It even has a method: Bring together the most powerful men and women in the world to shake hands and talk seriously about the economic catastrophe and what will be done to fix it. Beyond that, it has specific subject matters: Stimulus, trade, regulations, developing countries, tax havens, etc. But what exactly are the goals? How will the worlds citizens know if the meeting has been a success or not?
Here is where it gets a bit tricky, because by apparent mutual agreement most of the leaders of the world have decided not to talk to much about specifics. On the Air Force One flight to London, Robert Gibbs was asked what the measuring sticks should be for success at the G20. “I think it’s likely that we will come out of the G20 with very broad agreement on measures that have to be taken to address the global recession,” he said. “We’ve already gotten — despite what a lot has been written about — at the financial ministerial level just a couple of weeks ago the commitment to continue to evaluate what has to be done to spur the global economy along.”
He went on to speak a bit more specifically, but not that much. On the two big issues, financial regulations and stimulus, there is unlikely to be an abundance of detail in the final G20 report. Countries will agree in vague terms to do whatever is necessary to support the global economy, for instance, but they are not expected to agree on just how much government spending by which governments will be needed to make that happen. They will agree on broad regulatory guidelines, but leave many of the details to other organizations, like the international Monetary Fund, the Financial Stability Forum, or the Basel Committee on Banking Supervision. And, of course, there is sure to be yet another meeting of the G20 in the not too distant future, when even more agreements and details can be announced.
The bet here is that the details do not matter as much as broadcasting, loud and clear, a macro message: The world’s leaders are on the case. There are, in fact, adults in charge. They know the system is failed and are determined to make adjustments. It is a message directed less at the head than at the gut–a confidence builder, because even the most pointy-headed economists will tell you, confidence is the key. Without it, no matter of stimulus or regulation alone can save us.