The Financial Times gives us the rundown and has a handy little cheat-sheet for us to peruse. Take a look, and tell me whether you really find it all that impressive. I don’t; most of the resolutions lack details and much of the G20 communiqué is devoted to kicking the can down the road. There has been no agreement on further fiscal stimulus (not that I want further fiscal stimulus, but still), lip service has been given to fighting protectionism (a pledge worth the paper it is written on when one considers that the Obama Administration is in the act), details of IMF funding for Special Drawing Rights (SDRs) still need to be worked out, as do details for regulatory and institutional reform.
Much of the world is squealing with admiration over the news that President Obama resolved a dispute between Nicolas Sarkozy and Hu Jintao over the issue of tax havens by splitting the difference between the demands of the two and taking “note” of the fact that the Organization for Economic Cooperation and Development identified a list of “rogue” tax havens. (Sarkozy wanted the list to be “endorsed,” Hu wanted it to be ignored altogether.) If anyone really believes that this is the greatest feat of diplomacy since the Age of Metternich, I have some mortgage-backed securities to sell them. Sarkozy was never going to get his dream of cracking down on tax havens and at the end of the day, the G20′s position was much closer to Hu’s. Sarkozy may be able to go back to France and claim that he was able to do something about tax havens, but the claim has no bite to it whatsoever. Essentially, the President simply reinforced the Chinese position.
That turned out to be good policy, since tax havens have nothing whatsoever to do with this crisis, and scapegoating them is nothing short of absurd. But let’s stop pretending that President Obama exhibited some kind of masterful diplomacy to heal an almost-irreparable breach between the French and the Chinese. It really wasn’t all that.