Matt Yglesias asks for "better finance policy and more effective international coordination of anti-recession efforts."
Quite frankly I don’t think “coordination” is the right word European governments and the ECB are acting as if the recession is no big deal. They are willing to stimulate so long as it doesn’t cause budget deficits. That is they are totally confused or trapped by ideology or … well it doesn’t matter much. Obama needs to light a fire under them.
Now I know the idea was to be all internationalist and respectful and stuff, but he can’t let the world fall into a depression because the alternative would be to be rude.
Now how can this fire be lit under them ? I think the appropriate agency of the US gov is it’s AIG division which is sending tons of money to European banks. That is currently the US Treasury is sending tons of money to European banks. The Treasury has a limited liability stake in AIG. Beggars can’t be choosers and sometimes neither can ceditors.
I think that Obama has to say to Trichet, Merkel, Sarkozy, Brown and Berlusconi “nice banking system you have over there. It would be a shame if something were to happen to it.”