While all eyes were on the rantings of Mahmoud Ahmadinejad at the United Nations, the United States -- under President Obama -- was surrendering its economic sovereignty at the G-20 summit.
The result of this conclave, which France's president Nicolas Sarkozy hailed as "revolutionary," was that all the nations agreed to coordinate their economic policies and programs and to submit them to the International Monetary Fund (IMF) for comment and approval. While the G-20 nations and the IMF are, for now, only going to use "moral suasion" on those nations found not to be in compliance, talk of sanctions looms on the horizon.
While the specific policies to which the U.S. committed itself (reducing the deficit and strengthening regulatory oversight of financial institutions) are laudable in themselves, the process and the precedent are frightening.
We are to subject our most basic national economic policies to the review of a group of nations that includes autocratic Russia, China and Saudi Arabia. Even though our gross domestic product is three times bigger than the second-largest economy (Japan) and equal to that of 13 of the G-20 nations combined, we are to sit politely by with our one vote and submit to the global consensus. Europe has five votes (Britain, France, Germany, Italy and the EU), while we have but one.
And the process will be administered by the IMF, whose counsel to less-developed nations over the past two decades has consistently called for social pain and economic austerity. The IMF's misguided policies have been responsible for more revolutions than Marx, Engels, and Lenin combined. Its bureaucrats' arrogance is legendary, and its search for appropriate punishments to fit the crime of spending too much on the poor smacks of colonialism and imperialism. They are our new overseers.
This combination of the IMF and the G-20 will not only work to structure national economic policies but to limit executive compensation at financial institutions. The watchful, wise leaders of such nations as Turkey, Saudi Arabia and Indonesia -- among others -- will monitor Wall Street to assure themselves that their compensation is not out of line. One particularly looks forward to the views of the Saudi monarchy on this question of excessive personal enrichment.