The cheering over the positive news from the global summit of the so-called G20 nations is well deserved, but no one should think that all’s well.
It’s one thing to pledge more stimulus money and promise tighter financial regulations. That’s all well and good, and the stimulus efforts are especially timely at this point. But let’s be clear: a new round of global stimulus will, at best, slow, perhaps stop the bleeding at some point, but probably not until later this year, at the earliest. As for economic growth, it’s far too early to think of such things.
In fact, a fair amount of the good news dispensed by the conference of the world’s biggest economies is related to what didn’t happen. If the talkfest had ended with recrimination and a muddled outcome, as some thought was likely, the global economy would suffer that much more. Think of Nero playing his fiddle with Rome in flames.