Right words in wrong mouths

The problem with the UK and US positions at the G20 summit is a fundamental one: they are all mouth and no money, writes The Guardian.  

The Guardian

[O]ne of the features of [the G20] is that the right things are being said by the wrong people. So whatever the merits of [British Prime Minister Gordon] Brown's comments ... about the need for fairer, more moral markets, they sound plain odd from the man who was the light-touch chancellor. And Barack Obama is right to call on China, Japan and Germany to pump more money into a world economy showing distinct depressionary characteristics. But for any government to take policy advice from America, the nation that brought us this financial cataclysm, would be like getting stock tips from Bernie Madoff.

The problem with the UK and US positions is a fundamental one: they are all mouth and no money. Mr Brown and President Obama are running big current account and budget deficits that limit their room for manoeuvre. They can call forreflation of the world economy — but they do not have the cash to do it on their own. And those solvent countries with big current-account surpluses, whether in Asia or Europe, are in no mood to listen. This is the first economic crisis in decades in which political muscle and financial might are so badly misaligned. At the Bretton Woods conference of 1944, Washington had the money that enabled it to call the shots. In the emerging-markets crisis at the end of the 90s, the US could act as the consumer of last resort, buying goods from struggling Asian exporters. Pursuing that policy for so long helped to lead America into this predicament — it certainly cannot do it now....