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.
Perhaps as part of his public spasm of apology, President Obama
also strove successfully to increase the voting strength of the debtor
nations on the IMF from the current 43 percent to 48 percent. This is the
economic equivalent of giving deadbeat debtors more votes on their bank's
governing board of directors.
Thus, the world's most successful economy, ours -- which is the
only one that has produced reliable economic growth for three decades and
has lifted real personal incomes almost every year -- is going to subject
itself to the burden of justifying its own economic policies in front of a
global community of 20 nations, some of which do not even embrace
free-market economies in the first place.
Indeed, it is only through access to our markets that nations
have been able to escape poverty. Japan, Germany, South Korea, Taiwan,
Singapore, China and India have sequentially trod this path into prosperity.
Obviously, we live in a global economy. But the United States
is 24 percent of it. We are entitled to more than one-twentieth of a voice,
and it is the world that should be following our policies -- not the other
way around.
Much of the damage of the Obama administration can be undone at
the next election. But such grants of sovereignty to autocratic, backward,
bureaucratic and even communist nations will be hard to undo.
The world is recovering from its leftist obsession -- e.g., the
Angela Merkel victory in Germany. But by the time the voters discover how
phony, failed and fraudulent these policies are, we may have given it all
away already. Irrevocably.