Letters by a modern St. Ferdinand III about cults

Churchill coined the term 'summit', to describe a meeting of the great men and minds. The original concept like that of the UN, and trans-national agencies is now thoroughly discredited and abused. There is little point to the G-20 or indeed most international meetings. We have a whole range of UN organizations, the G-8, G-20, the 'Non-Aligned', Davos, Jackson Hole, NAFTA, the EU, ASEAN, the African Union, Mercosur.....How many of these confabs do we need? More importantly what is truly accomplished? What real work is performed at these expensive parties which cannot be completed via web conferencing? Why the addiction by heads of state and their sundry ministers to display power, to posture; to issue platitudes and bromides and empty promises? Why do tax-payers put up with this?

The G-20 is by definition a 'financial' meeting. But what is there to discuss amongst 20 very different states which is not already dealt with at other forums, or by other agencies, including regional trade agreements? $1 billion spent on a series of meetings which produced no results is a travesty. Millions of unemployed need retraining. The military needs repair. Infrastructure lies rotting. But Canada can afford $1 billion to host a party for poseurs and baffle-gab innuendo? Doubtful.

Arguments supporting such 'summits' are not convincing.  Most of the participants share little except perhaps some past cultural legacy, [in the case of Europe and North America]; and trading relationships. The military ties are handled through NATO, which has proven itself entirely useless in Afghanistan and is anyways a stand-alone organization with a permanent headquarters in Brussels. G-20 'summits' by definition are supposed to focus on the economic. But in reality there is a large degree of economic divergence and interests of the 20 participants. As such there is no 'united' front which can be organized.

Why the G-20?:

The G-20 grew of the G-7 and G-8 affiliations, whose stated purpose was to co-ordinate economic policies, and fiscal programs across 7 or 8 very diverse states, which are apparently the 'richest' in the world. But coordinate what exactly?
More spending?
More government distortion of trade?
More government regulation of the over-regulated and super-taxed banking sector?
More government programs of compassion, love, home-ownership, or socialization of some sector?
More words from governments about how they will 'save' the economic 'recovery' and the children's future?
What precisely are the benefits from the rhetoric and self-absorbed posturing?

Divergent interests:

There is little to show for all of these grandiose experiments in state power. The reality is simply this – the G-20 states have little in common. Brazil for example is an ally of Turkey and Iran and has little in common outside of some relatively minor trade flows as a percentage of its total economy; with Canada, India, the US or Europe. Italy, Spain and Greece are bankrupt and riven by Marxism and unionism. At least 5 or 6 EU states will need more US and the IMF transfers to save the Euro and the EU. Though the US is becoming more European than Europe – it still possesses a real military, and has diverging interests with other G-20 actors, especially with regards to China and India. Its capacity however to prop up the EU and its Euro currency is fast-fading. There are no common sets of interests within the G-20 and those which do exist are handled in other fora.

Social spending; buying of votes; and the continued socialization of the economy are being pursued by all the G-20 states. The only so-called 'coordinated' reform, will be to raise taxes.

Given the reality of the above, what is the point of such an expensive meeting?

Political-Economy:

Every state has its own political-economy, with its own cultural preoccupations and self-interests. There is little to no 'unified' trends or flows which demand a unity of 20 states acting in accord. Trade as a total percentage of GDP for all of these states is no more than 40%. Intra-country trade between individual states is very small when compared to the domestic economies of the states in question. The trading system is protected and usually distorted at the macro-level by the WTO a UN affiliated organization; and by the regional trade pacts of NAFTA, the EU and ASEAN. The G-20 has no prerogative over trade.

The G-20 might claim some 'rights' to 'balance' the financial systems, but considering that every political-economic actor has its own, and usually very different set of banking regulations and standards, the ability to achieve a unity of purpose over banking regulations, taxation or supervision is impossible. In any event the 'Basel Accord' meetings are designed to focus on banking supervision and rule-making. The G-20 is thus redundant.

Dangerous Vapidity:

So what exactly are these leaders doing at the G-20?

We have the usual gibberish and empty promises. One idea was to sur-tax the banks, with the money to go into general revenues – to fund deficit spending of course. The idea is dumb, but not yet dead. According to the WSJ:

“Absent consensus on a bank tax, leaders agreed that financial institutions should help pay for any interventions to help the financial sector, but noted a range of options.”

That communique could have been drafted on a Web conference call. But the concept that taxpayers in North America should transfer money to Europe to fund their deficits is still sadly, a possibility:

“U.S. and European countries remain divided on an international leverage ratio and on whether to recommend taxes on banks. The U.S., Germany, U.K. and France back a levy to pay for the costs of bailouts while countries including Canada, Brazil and India, which didn't have to lay out public funds to recapitalize banks, oppose the idea.”

Really clever minds scheming. Why should a Canadian pay for the livelihood of a Greek? International welfare is immoral. Europe needs to reform itself without non-EU monies.

But what was particularly delightful was the G-20's declarations of deficit reduction. Deficits within a few years will be cut in half or more. Government debt will shrink. Economies will grow. Spending will be cut. Taxes will rise. Pigs will sprout wings. Dogs will walk on two legs. And Obama will make speeches extolling the virtues of children, small-dogs, and apple-pie. Vapid nonsense.

In all G-20 states the ratio of real, total debt to GDP is 800%.  Historically states go bankrupt once the threshold of 200% is crossed. What are the chances that politicians will fore-go vote-buying and spending? What are the chances that governments will cause civil unrest by denying all the goodies and lollipops of socialized guarantees including health care and pensions, or reforms thereof? These politicians will only increase taxes to reduce deficits. But taxes will need to triple to fund the 800% of debt to GDP. This is impossible. Bankruptcy is far more likely.

Wasting time and money:

Governments cause economic cycles and problems. They deepen recessions. They spend too much money. They rigidify and socialize markets, labor and capital. Government is the main problem we have. What then is the good of having politicians meet and make more promises and spending $1 billion which is needed elsewhere, not the least of which could include $1 billion in tax cuts?

Instead of meeting and wasting time, why not use Web conferencing tools, email and phone calls? The same bafflegab can be produced using digital technology. There is no need for yet another 'summit' meeting between 20 states which have little in common, and no interest in 'united fronts'.