Appearances Likely to Trump Substance at Downtown G-20 Meeting
Conte, Andrew, Tribune-Review/Pittsburgh Tribune-Review
The most important moment of this week's Group of 20 meeting may be the "family portrait" of world leaders who gather at the David L. Lawrence Convention Center.
Image often trumps substance at these meetings, experts said. Leaders want to send the message that they're working on common solutions -- even if underlying problems remain intractable.
"When you get a financial crisis and everybody's panicking, it's very important to have the impression that you have somebody at the steering wheel, even if this somebody doesn't do anything," said Daniele Archibugi, research director for the Italian National Research Council in Rome.
This time, the message likely will be not only that the members are getting together again, but that some of their earlier measures are starting to take hold, economists said. Although it's true that massive stimulus spending led by the United States and China has started working its way through the economy, many challenges remain.
"It'll be more spin than substance," said Allan Meltzer, a professor of political economy and public policy at Carnegie Mellon University.
"Most countries of the world need to talk about how to get their budget deficit down and how the world is going to look very different because the United States has to increase its exports, reduce its imports and reduce the rate of consumption. Those problems are not being addressed."
Heads of state from 19 countries and the European Union first met at November's G-20 summit in Washington, and then they got together again for April's London summit. Before then, only finance ministers and bank governors attended the sessions.
"The idea was if these leaders got together, it would instill confidence to change things," said Jenilee Guebert, senior researcher for the G-20 Research Group at the University of Toronto. "That's not what happened."
After the Washington meeting, the Dow Jones industrial average plummeted 1,800 points to a low of 6,440 in March before rebounding above 9,600 recently. The U.S. Bureau of Labor Statistics says that more than 4 million Americans have lost their jobs since November.
Even before the leaders gathered, G-20 sessions had maintained an upbeat tone. The 2006 session in Australia featured the optimistic theme of "sustaining prosperity." A year later, as fuel and commodity prices started rising, the finance ministers predicted only a modest slowdown.
"They received very few warnings and, even in retrospect, most analysts believe that there was no way to anticipate the depth of the economic and financial plunge," said Fred Bergsten, director of the Peterson Institute for International Economics in Washington.
In response to the global recession -- driven by the subprime mortgage crisis in the United States and exacerbated when Wall Street investment firm Lehman Brothers declared bankruptcy in September 2008 -- leaders have focused on two main responses: government spending to stimulate the economy and increased regulation to rein in corporate excesses.
"Stimulus was the answer to the short-term problem," said Gunduz Caginalp, a mathematical finance professor at the University of Pittsburgh. "They needed to have cash put into the system because it was becoming a danger. Longer term, why did this happen and what do we do?"
Participants who advocated spending can pat themselves on the back as they ride into Downtown from Pittsburgh International Airport. They will pass a $16 million construction project on state Route 60 that is part of $16 billion worth of federal spending statewide. …