Fratto: London Calling - G20 And The Clash

London calling, see we ain’t got no swing
‘cept for the ring of that truncheon thing

On April 3, 1980, Tom Carson began his Rolling Stone review of "London Calling" — the then-latest album from the The Clash — with these words: “By now, our expectations of the Clash might seem to have become inflated beyond any possibility of fulfillment.”

Thirty years after release of the album, London called again – this time by gathering leaders of the Group of 20 economies. But no one feared the same inflated expectations Clash fans might have had in advance of London Calling. In preparation for this meeting, G20 members so successfully lowered expectations that merely lining up in proper order for the obligatory group photo could be hailed as an historic achievement.

Having fulfilled the low expectations, the leaders then stepped out to duly proclaim their triumph and overstate their achievements.

The headline deliverables from the summit – despite all the talk of “new economic orders” and “rewriting the Bretton Woods system” – were two: the necessary, but previously agreed upon increase in resources for the IMF; and a name-and-shame crackdown of four so-called tax havens. The latter compromise was made possible, as anonymous White House officials tactfully briefed to reporters, by President Obama — who apparently found it necessary to stop President Sarkozy from holding his breath until his face turned blue.

London calling at the top of the dial
After all this, won’t you give me a smile?

Yes, there were smiles all around – including from the assembled press corps during President Obama’s concluding news conference. Everyone had a good laugh with the President’s pithy remark that the achievements this week were significantly more difficult than the Bretton Woods conference in 1944 – “the last time you saw the entire international architecture being remade.”

Said the President, “Well, if it’s just Roosevelt and Churchill sitting in a room with a brandy, you know, that’s an easier negotiation.”

The line adheres to this White House’s modus operandi of belittling the accomplishments of prior Administrations, but the line also suffers from accuracy in two ways:

First, Bretton Woods wasn’t Churchill and Roosevelt sitting in a room sipping brandy. It involved 44 nations – more than twice the number gathered in London this week – and more than 700 delegates negotiating for three weeks in Bretton Woods, New Hampshire.

Second, unlike this meeting, Bretton Woods actually did remake the global financial architecture – establishing a global monetary framework, a trade and tariff regime, and creating important international financial institutions like the IMF and the World Bank. In fact, the Bretton Woods leaders sought to address, however imperfectly, the core threats to the post-war economy: reconstruction and monetary stability.

By contrast, when London called this week, the G20 leaders avoided addressing the core cause of our present crisis: the huge surpluses in exporting nations, and corresponding deficits in the United States — exacerbated by asymetric currency adjustment, including China’s managed currency regime.

China, in fact, had the most successful summit. In return for promising to contribute to IMF resources, the country received not a whisper of criticism for its own role in generating global imbalances. Even the first bilateral meeting between President Obama and Premier Wen went off well, where the major announcement was to rebrand the Bush Administration’s Strategic Economic Dialogue as the Obama Administration’s Strategic and Economic Dialogue. ('Change you can believe in,' in this case, amounting to a conjunction.)

And in order to maintain harmony with France and Germany the White House sacrificed its understanding of the demand gap, backing away from its previous view that greater stimulus was needed from Europe.

London calling-and I don’t wanna shout
But when we were talking-I saw you nodding out

If you were paying attention at all, you’ll be forgiven for nodding out.

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Tony Fratto is a CNBC on-air contributor and most recently served as Deputy Assistant to the President and Deputy Press Secretary for the Bush Administration.