WASHINGTON -- For the past seven years, according to Rep. Jim Moran, "We have been guided by a Republican administration who believes in the simplistic notion that people who have wealth are entitled to keep it." Actually, that "simplistic notion" has been the linchpin of the American system of free enterprise for the past two centuries. It has served to make the United States the most bountiful, wealthy and charitable nation on earth. Yet Moran says that system "doesn't work in the long run."
My fellow Americans, welcome to the long run.
The coincidence of an economic downturn and our most recent political realignment have produced calls for urgent, dramatic, decisive action. Liberal politicians, such as Moran, are suggesting that we all would be better off if we'd adopt a more punitive tax code and use the Internal Revenue Service to redistribute the wealth. Republicans and Democrats already have allied to use our tax dollars to bail out an insurance giant, mortgage companies and financial institutions that made bad loans and extended credit to borrowers who couldn't pay. Coming soon: tax dollars to save U.S. automakers. Attached to all these U.S. Treasury checks: countless pages of new fine-print regulations designed to prevent future financial stupidity -- or to ameliorate its consequences. But as they say in the Marines, "You ain't seen nothin' yet."
This week, here in Washington, President Bush is hosting world leaders for a global game of "Monopoly" with yet-to-be-determined rules, regulations and restrictions. Billed as the "Summit on Financial Markets and the World Economy," the weekend seance is being described by some participants as "Bretton Woods II." For the benefit of those who have forgotten their high-school history lessons, the first Bretton Woods conference -- held in July 1944 in the New Hampshire town with the same name -- officially was called the "United Nations Monetary and Financial Conference." At the time, the United States was the world's only economic powerhouse, and the goal was to construct a functioning, sustainable international economic system in the aftermath of World War II. It almost worked. Almost.
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After nearly two years of negotiations and three weeks of formal meetings in the Mount Washington Hotel, the 735 delegates from 44 nations agreed to create the International Bank for Reconstruction and Development, the International Monetary Fund, and rules and regulations for international monetary exchanges, with gold (at $35 per ounce) as the currency standard. Since then, the IBRD has morphed into the World Bank, gold is no longer the "global standard," and thanks to costly energy imports and trade imbalances, the U.S. has become a debtor nation. Now, with the rest of the world following the U.S. into recession, leaders of the most powerful economies have descended on Washington to "fix the problem." It's not a happy crowd.
They call themselves the "G-20": Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States and the European Union. The IMF, the World Bank, the United Nations and the Financial Stability Forum are also "represented." Clinton-era Secretary of State Madeleine Albright -- perhaps best remembered for dancing the "Macarena" with North Korean dictator Kim Jong Il -- will be there for the Obama-Biden transition team. Nobel laureate Al Gore wrote in a New York Times opinion piece, "The bold steps that are needed to solve the climate crisis are exactly the same steps that ought to be taken in order to solve the economic crisis."
Unfortunately, the "bold steps" being contemplated by some of the G-20 participants may prove to be as stifling to the U.S. economy as the solution for Gore's "greenhouse gases." Among the G-20's "official representatives" are those -- such as Brazil's socialist president, Luiz Inacio Lula da Silva -- who blame the United States for the current economic downturn.
French President Nicolas Sarkozy, who claims credit for having come up with the idea for this confab, has said that there is an urgent need to "regulate capitalism" and that the G-20 gathering is a "great opportunity" to "build the capitalism of the future." Among other things, he wants to eliminate "offshore tax havens" and is pressing for the means to enforce new international "codes" against "excessive risk taking."
British Prime Minister Gordon Brown and others in the European Union are advocating the creation of a global regulatory agency for financial oversight and "international transparency" for banking activities. He supports giving the IMF unprecedented authority for surveillance over transactions by borrowers and lenders.
Proposals such as these will be very costly, and it won't be just the expense of yet another bloated international bureaucracy. In the rush to establish "adequate regulation and oversight" over financial transactions, too many G-20 leaders are willing to sacrifice national sovereignty and personal privacy. "In the long run," to use Moran's words, that's too high a price for Americans to pay.
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