Obama Aims to Lift the Global Economy, and Maybe Himself


images.2WASHINGTON — Facing a Republican resurgence that is blocking virtually every policy move, President Obama will arrive at an international economic meeting in Australia this weekend hoping to press European and Asian leaders to get their economies moving again — and perhaps buoy his own foundering presidency.


But allies may be less than open to that message if they question Mr. Obama’s ability to deliver his own promises in a reordered Washington.

Administration officials understand that a strengthening economic recovery at home could lift the president’s approval ratings and his power as he faces a fully Republican Congress for the first time next year.

Economic issues where there is some common ground between the White House and Republican lawmakers particularly trade agreements, a tax code overhaul and a budget deal offer the brightest possibilities for achievements in the president’s final two years. All three would be far easier to achieve if the economic recovery gathers steam.

But faltering growth in Europe and marked slowdowns in Japan and China are the latest dark clouds on a horizon that never seems fully clear for Mr. Obama.

“We’re not about to have a meltdown that will spill over into the United States and bring us into recession,” Treasury Secretary Jacob J. Lew said on Wednesday in a telephone interview on his way to the summit meeting of the Group of 20 largest economic powers.

“On the other hand, the global economy is highly interconnected, and if things are really bad in Europe and Japan, if there’s a real slowdown in China, that’s a headwind in the United States that we don’t need.”

Mr. Lew and Mr. Obama will arrive at the G-20 meeting in Brisbane in a familiar position: pressing nations to raise their spending and monetary levers while struggling to secure their own economic policies. The president’s first G-20 summit — in London in 2009 — was dominated by a push for fiscal stimulus and monetary easing.

This weekend, he will be back at it.

“The world is counting on the U.S. economy to drive the global recovery,” Mr. Lew said in an address on Wednesday in Seattle to the World Affairs Council. “But the global economy cannot prosper broadly relying on the United States to be the importer of first and last resort, nor can it rely on the United States to grow fast enough to make up for weak growth in major world economies.”

The question is, will they listen, especially in light of Mr. Obama’s electoral rebuke this month and the coming Republican Senate?

“Part of his task is to persuade his G-20 colleagues that he will be successful in adopting a pro-growth agenda in the United States,” said Dan Price, who was President George W. Bush’s liaison to the G-20. “And there will be questions put to him as to how the recent elections play to that agenda.”

Mr. Price said that Mr. Obama’s progress on trade this week with leaders of the Trans-Pacific Partnership and an agreement with China on information technologies “are certainly cause for optimism.”

Mr. Lew was clear that times have changed. In 2009, the global economy was sliding further into the Great Recession, led by the United States’ financial crisis. Would-be allies in the president’s pitch for stimulus were fuming that Washington dared dictate a policy response to a crisis of Wall Street’s making.

This year, he said, “that has flipped dramatically.”

But as in past G-20 summit meetings, Mr. Obama will face serious skepticism from allies who question his ability to deliver, said C. Fred Bergsten, founding director of the Peterson Institute for International Economics.

The president led the way in forging reforms of the International Monetary Fund’s governance structure at the 2010 G-20 in Seoul, for example, only to see them rejected repeatedly — and embarrassingly — by Republicans in Congress.

Moreover, there is no economic crisis driving action, only political bickering at home and abroad, Mr. Bergsten said.

Mr. Lew laid out the president’s plan to keep America’s recovery on track: more spending on education, job training, research, manufacturing and infrastructure; a hike in the minimum wage; an expansion of the earned-income tax credit for low-wage workers; and a comprehensive overhaul of the immigration system. None of that is new, and none of it was adopted, even in a Democrat-controlled Senate.

For Republicans, the Treasury secretary did nod to conservative priorities in his Seattle speech and reiterated the administration’s pledge to “modernize our broken business tax system” and “shore up our retirement and health care security programs to make sure they meet the obligations of future generations.”

In his interview, Mr. Lew pointed to the Trans-Pacific Partnership trade accord and a business tax overhaul as areas where the administration will seek “serious negotiations.” He said he had already reached out to the incoming Republican chairmen and ranking Democrats on key Senate committees.

“I’m optimistic,” he said.

But his choicest words in the Seattle speech were for Europe and Japan. He pressed for “resolute action” by Europeans — fiscal stimulus, looser monetary policy and structural reforms to their economies — “to reduce the risk that the region could fall into a deeper slump.”

“The world cannot afford a European lost decade,” he said.

He also took a jab at Prime Minister Shinzo Abe of Japan for stepping back from his fiscal stimulus, implicitly urging him to back away from a sales tax increase looming over Japan just as the United States is imploring governments to raise domestic consumer demand.

Mr. Abe has to decide in the coming weeks whether to move forward next October with a second sales tax increase, which was approved by a previous government. The first increase in April crimped the economy, with Japan’s gross domestic product contracting by more than 7 percent in the second quarter.

Opposition to the tax increase is mounting, with economists and lawmakers close to the government urging its postponement. “We need to prioritize economic growth,” said Kozo Yamamoto, a lawmaker in Mr. Abe’s Liberal Democratic Party.

Just off his bruising losses in this month’s midterm elections, Mr. Obama appears eager to get the credit for a quickening economic recovery on the international stage that voters appear loath to give him back home, in large part because the vast majority of Americans have not enjoyed much of the bounty since the economy began growing again more than five years ago.

Mr. Lew, focusing on the more positive developments, boasted of private sector job growth that has added 10.5 million new jobs over four and a half years of unbroken growth.

“We have created more jobs since the pre-crisis peak than Europe and Japan combined,” he said in Seattle.


We See The World From All Sides and Want YOU To Be Fully Informed
In fact, intentional disinformation is a disgraceful scourge in media today. So to assuage any possible errant incorrect information posted herein, we strongly encourage you to seek corroboration from other non-VT sources before forming an educated opinion.

About VT - Policies & Disclosures - Comment Policy
Due to the nature of uncensored content posted by VT's fully independent international writers, VT cannot guarantee absolute validity. All content is owned by the author exclusively. Expressed opinions are NOT necessarily the views of VT, other authors, affiliates, advertisers, sponsors, partners, or technicians. Some content may be satirical in nature. All images are the full responsibility of the article author and NOT VT.
Previous articlePortrait of a Modern Revolutionary
Next articleGold And Silver – A Change In Suppressed Down Trend?