The leaders of the eight leading industrialized nations meet in the G-8 summit in Italy today. This meeting comes just a few months after the G-20 summit in London, which sought to create a unified global response to the economic crisis. The IMF today reinforced the concern that much work remains to be done, and that it is too early to back away from stimulus policies and support for poorer countries.
This weekend, world leaders will gather in Washington to discuss the financial crisis. After World War II and the great depression the world’s leaders recognized that the international financial system was too complex and interconnected for countries to go it alone and responded by establishing the Bretton Woods institutions. The international financial mechanisms they created helped war-torn economies recover – and set the stage for the US economy to grow and thrive atop the global economy for the half-century that followed.
In times of crisis it is essential that a leader have the temperament and judgment to guide America with a steady hand. Sen. McCain’s response in times of crises that has been erratic and reckless. During this campaign, McCain’s reaction to the global financial crisis and the outbreak of war between Russia and Georgia led many to question his judgment and his temperament. McCain’s erratic and hasty responses to past and present international crises raise real doubts about his ability to lead America through a crisis with a steady hand.
Last week it became apparent that only a unified international response can stop the global credit crisis. This weekend, a coordinated approach was finally crafted after meetings of the G7, IMF, World Bank, European Union and other international organizations. The international infrastructure of alliances and institutions that was set up after World War II played a crucial role in helping forge a strategy which, by infusing capital into the banking system and guaranteeing interbank loans, has at least for the moment buoyed the markets.
America’s economy underpins its position as the world’s most powerful nation. Today’s collapses in our strategic and economic strength are linked – and mutually reinforcing. Unchecked military spending and faulty strategic thinking have left us in an unsustainable global position, and as the financial crisis has spread across the globe, world leaders are seriously questioning the United States capability for continued economic and strategic leadership.