In an eventful foreign policy week, a bipartisan consensus has quietly emerged and held steady On Iran, there has been a near consensus among Iranian experts, serious foreign policy scholars and Republican political and policy leaders -- favoring measured statements that focus on demonstrators’ rights but emphasize Iran’s sovereignty. Meanwhile, the war supplemental funding bill passed 91-5 in the Senate, including groundbreaking new funding for the IMF’s response to the economic crisis, as well as payment of UN arrears and changes to the defense budget. Instead, it was clear that this group of conservatives was taking stands on sensitive international issues with only one thought in mind: too oppose Obama.
The World Bank released a report on Friday that projected the global economy will contract for the first time since WWII. This has led Lawrence Summers, the head of the National Economic Council, to call for a global stimulus effort that seeks to boosts demand throughout the world. The world will be watching the G-20 summit in April for the hope of seeing strong global action along the lines advocated by Summers and Prime Minister Gordon Brown. However, despite the need for countries to take strong action, Congressional conservatives are stuck in a mindset reminiscent of the Hoover-era. Calls for “spending freezes” and to stimulate the economy exclusively through tax cuts, are reflective of a movement that has run out of ideas and has no practical solutions to solve the economic crisis their very own policies created.
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.
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.