Sunday, May 18, 2003

If one had to argue for a comparison of the recent meeting of the Group of Seven (plus Russia) in Deauville, France (or is that Deauville, Freedom?) this weekend with either the Seven Chinese Brothers or the Seven Dwarves, I'd have to take Walt Disney's animated classic. While you might be tempted to pick the Brothers who all look alike and sound alike -- and all await imminent execution -- let's instead cast the G-7 ministers as well-intentioned misfits who hang out in the woods a lot and don't know a lick about keeping the house tidy.

Deflation is stalking the global economy, Japan is facing a major banking crisis, Germany along with half of Europe is in official recession, and these yahoos actually had the audacity to state collectively they are "nonetheless confident in the potential for stronger growth." Exactly when is this supposed to occur?

The game for distributing the costs of globalization's first dramatic impasse has begun. The decline in the US dollar since February 2002 has put significant pressure on first the Japanese and now the Europeans to cushion the blow to their export-dependent economies. If the ministers can't start to plot out a compromise which will talk the dollar down from its suicidal heights without simultaneously driving both Japan and Europe into economic depression, things will get real ugly real fast. The EU is already holding $4 billion in WTO sanctions over the head of the US, and now the US says it is filing a complaint with the EU over its policies on genetically-modified foods. Iraq continues to be a sore point, NATO is in turmoil, and all these guys can do is give us George H. W. Bush's famous campaign pitch from 1988: "Stay the course"??

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