The New, Super-Sized IMF
Everyone leads with the agreement reached by the leaders of the world's largest economies to provide new funds to help countries that have been hit hard by the global recession and introduced a host of new oversight measures designed to increase regulation of the financial sector. At the Group of 20 summit meeting in London, leaders agreed to provide $1.1 trillion in loans and guarantees to boost international trade that would greatly increase the International Monetary Fund's coffers. They also vowed to implement new regulations for hedge funds and large financial institutions, as well as a crackdown on tax havens, although these would have to be implemented by individual nations. The Los Angeles Timesdeclares that while these measures may not amount to a "new global deal" that President Obama had called for, "the outcome still surprised many observers with its unusually substantive achievements." USA Todayseconds that sentiment, saying that the "landmark agreement … was more than what experts expected." And the Washington Post says that the "consensus was remarkable given the discord that preceded Thursday's meeting."
The Wall Street Journal and the New York Timesare decidedly less impressed. The WSJ says the leaders "deferred many of the trickiest decision or forwarded them to international institutions unaccustomed to the responsibility." While the "measures may ease some pain … many declarations were of principles that have to be followed up" at a later date, notes the paper. The NYT points out that "the final accord was far more forceful in addressing the plight of emerging economies … than it was in addressing the deep recession in the largest countries where the crisis began." Critics were quick to note that the agreement was more than a little vague on how the world should tackle some of the root causes of the financial crisis.
Even those who took the glass-is-half-empty view of the G-20 agreement seem to recognize that, at the very least, world leaders would avoid repeating "the failure of a similar gathering in 1933, which was followed by a surge of protectionism that prolonged the Great Depression," notes the NYT. In the end, there was no commitment for individual countries to boost their government spending, but that was hardly surprising considering that the "White House had lowered expectations for such a result before the summit," says USAT. "These summits are all about managing expectations, and going into this week the expectations were very low," said Edward Alden of the Council on Foreign Relations. "The goal here was to show a united front, and they did that.
Before the summit, France and Germany had been pushing for the world leaders to come up with a new set of regulations for the financial markets. In the end, the nine-page "Leaders' Statement" included vows to crack down on tax havens, impose new regulations on hedge funds, and implement controls on executive pay. French President Nicolas Sarkozy didn't get what he wanted—he had previously called for a global financial regulator—but emphasized that the final agreement shouldn't be seen as a "victory of one camp over another."
Inside, the WP notes that the plans to increase financial regulations could take a while to implement and individual countries have no obligation to accept them, so it is the pledge for $1.1 trillion in new loans and guarantees that "will have the most immediate effect." In order to disburse this money, world leaders will rely on the International Monetary Fund, "which emerges from the summit with a vastly redefined and enhanced mission." In addition to the help for emerging economies, the IMF will also be in charge of a $250 billion line of credit that will mostly go to industrialized nations, potentially even the United States. The WSJ points out that the IMF will have to take on responsibilities that go beyond its "traditional role, and may require the fund to show more spine in dealing with its largest members than it has managed in the past."
Everyone points out that markets around the world soared. Many papers credit the 2.8 percent increase in the Dow Jones industrial average to the G-20 meeting, but the NYT says stock markets in the United States seemed more influenced by "an arcane change in American accounting regulations that would make it easier for banks to defer writing down the value of their most troubled toxic assets."
The LAT and NYT front looks at how Obama did in his debut performance as president on the world stage. "Well, I think I did O.K.," Obama said. Most seem to agree. Although he was criticized for appearing a bit distant, the NYT points out that he "took pains to project a cheerful, humble image." And he was even able to show off his diplomatic skills, thanks to a disagreement between France and China over whether the group of leaders should recognize a list of tax havens being published by the Organization of Economic Cooperation and Development. China was against it, partly because it doesn't belong to the OECD and because it could risk embarrassment since the list might include Hong Kong and Macao. So Obama took each country's leader aside for a small chat and suggested that instead of using the word recognize, they should use the word note. It may seem ridiculous, but the LAT points out that that's "the kind of small dispute that holds up international agreements all the time." The leaders liked Obama's solution, and they all shook hands. "It was not a Middle East peace accord," notes the NYT. "But Mr. Obama had his first moment as a statesman."
"All in all, a pretty successful opening-night performance for President Obama on the international economic stage," writes the WP's Steven Pearlstein. "He achieved most of what he wanted while allowing others to claim victory and allowing the United States to shed its Bush-era reputation for inflexibility and heavy-handedness. And by the standards of past summits, this one was full of accomplishment."
The WP off-leads a long look at Treasury Secretary Timothy Geithner's tenure as head of the Federal Reserve Bank of New York that was reported in conjunction with ProPublica, a nonprofit investigative journalism organization. Geithner and his partners at the New York Fed "missed clear signs of a catastrophe in the making" and spent much of their time trying to solve "narrow mechanical issues in the derivatives market." Geithner wasn't blind to what was happening. Indeed, he often raised concerns that banks were taking on too much risk and ordered a 2006 confidential review that found banks couldn't really understand, and didn't have a scientific way to measure, the risks they were taking. Despite this information, he failed to "act with enough force to blunt the troubles that ensued" and ultimately "relied too much on assurances from senior banking executives that their firms were safe and sound."
The NYT continues its tradition of revealing extremely troubling information about what takes place inside immigration detention facilities. We already knew that detainees with advanced illnesses or severe injuries had been ignored and denied treatment, with lethal results. Today, the NYT takes a look at the case of Ahmad Tanveer, a 43-year-old Pakistani New Yorker who died in custody but seemed to disappear from the system as soon as he did. Even though civilian activists, the ACLU, and the NYT were all trying to get information on the case, it took months for the government to acknowledge that the man had even died. And a supposedly comprehensive list of deaths excludes others who are known to have died while in custody. "We still do not know, and we cannot know, if there are other deaths that have never been disclosed by [Immigration and Customs Enforcement], or that ICE itself knows nothing about," an ACLU lawyer said.
Daniel Politi has been contributing to Slate since 2004 and wrote the "Today's Papers" column from 2006 to 2009. You can follow him on Twitter @dpoliti.