Obama's New World Order

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Barack Obama's New World Order

Obama Addresses 'Anti-Americanism' Play Video ABC News – Obama Addresses 'Anti-Americanism'

France's President Sarkozy, Denmark's Prime Minister Fogh Rasmussen, German Chancellor Merkel and US President Obama arrive for a working dinn Reuters – France's President Nicolas Sarkozy (L), Denmark's Prime Minister Anders Fogh Rasmussen (2nd L), …
By MICHAEL SCHERER / STRASBOURG Michael Scherer / Strasbourg – Fri Apr 3, 7:55 pm ET

The United States is still the same country it was a year ago, give or take about 6 million jobs. But its international branding campaign, as led by the new President, Barack Obama, is so different that the rest of the world might be forgiven if it has to do a double take.

Most of the hallmarks of the foreign policy of George W. Bush are gone. The old conservative idea of "American exceptionalism," which placed the U.S. on a plane above the rest of the world as a unique beacon of democracy and financial might, has been rejected. At almost every stop, Obama has made clear that the U.S. is but one actor in a global community. Talk of American economic supremacy has been replaced by a call from Obama for more growth in developing countries. Claims of American military supremacy have been replaced with heavy emphasis on cooperation and diplomatic hard labor. (Read "Obama in Europe: Facing Four Big Challenges.")

The tone was set from Obama's first public remarks in London on Wednesday, at a press conference with Prime Minister Gordon Brown, where the American President said he had come "to listen, not to lecture." At a joint appearance with German Chancellor Angela Merkel in Baden-Baden on Friday, a German reporter asked Obama about his "grand designs" for NATO. "I don't come bearing grand designs," Obama said, scrapping the leadership role the U.S. maintained through the Cold War. "I'm here to listen, to share ideas and to jointly, as one of many NATO allies, help shape our vision for the future."

On Thursday night, after the G-20 summit ended, Obama took so many questions from the foreign press, including British, Indian and Chinese reporters, that a group of them applauded when he left the stage. Two American reporters asked Obama for his response to the claim by Brown that the "Washington consensus is over." Obama all but agreed with Brown, noting that the phrase had its roots in a significant set of economic policies that had shown itself to be imperfect. He went on to talk about the benefits of increasing economic competition with the U.S. "That's not a loss for America," he said of the economic rise of other powers. "It's an appreciation that Europe is now rebuilt and a powerhouse. Japan is rebuilt, is a powerhouse. China, India - these are all countries on the move. And that's good."

At a town hall in Strasbourg, France, Obama stood before an audience of mostly French and German youth and admitted that the U.S. should have a greater respect for Europe. "In America, there's a failure to appreciate Europe's leading role in the world," he said before offering other European critical views of his country. "There have been times where America has shown arrogance and been dismissive, even derisive."

The contrast is striking. Only four years ago, George W. Bush, in his second Inaugural Address, described what he called America's "considerable" influence, saying, "We will use it confidently in freedom's cause." Bush's vision of American power was combative and aggressive. He said the U.S. would "seek and support the growth of democratic movements and institutions in every nation and culture." He continued, "We go forward with complete confidence in the eventual triumph of freedom."

Obama, by contrast, is looking for collaboration. He is looking to build a collective vision, not to impose an American one. And the response has been notable, from the endless flashbulbs that fired off at his town hall to the cheers of spectators who lined his motorcade routes and gathered outside his events in London. At the end of Obama's Friday press conference, French President Nicolas Sarkozy addressed the issue directly, speaking through an interpreter. "It feels really good to be able to work with a U.S. President who wants to change the world and who understands that the world does not boil down to simply American frontiers and borders," he said. "And that is a hell of a good piece of news for 2009."

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G-20 Shapes New World Order With Lesser Role for U.S., Markets

By Rich Miller and Simon Kennedy

April 3 (Bloomberg) -- Global leaders took their biggest steps yet toward a new world order that’s less U.S.-centric with a more heavily regulated financial industry and a greater role for international institutions and emerging markets.

At the end of a summit in London, policy makers from the Group of 20 yesterday delivered a regulatory blueprint that French President Nicholas Sarkozy said turned the page on the Anglo-Saxon model of free markets by placing stricter limits on hedge funds and other financiers. The leaders also pledged to triple the resources of the International Monetary Fund and to hand China and other developing economies a greater say in the management of the world economy.

“It’s the passing of an era,” said Robert Hormats, vice chairman of Goldman Sachs International, who helped prepare summits for presidents Gerald R. Ford, Jimmy Carter and Ronald Reagan. “The U.S. is becoming less dominant while other nations are gaining influence.”

A lot was at stake. If the leaders had failed to forge a consensus -- Sarkozy this week threatened to quit the talks if they didn’t back much tighter regulation -- it might have set back the world’s economy and markets just as they’re showing signs of shaking off the worst financial crisis in six decades.

That’s what happened in 1933, when President Franklin D. Roosevelt torpedoed a similar conference in London by rejecting its plan to stabilize currency rates and in the process scotched international efforts to lift the world out of a depression.

More Conciliation

Seeking to avoid a repeat of that historic flop, President Barack Obama junked the at-times go-it-alone approach of his predecessor, George W. Bush, and adopted a more conciliatory stance toward his fellow leaders.

“In a world that is as complex as it is, it is very important for us to be able to forge partnerships as opposed to simply dictating solutions,” Obama told a press conference at the conclusion of the summit.

Stock markets rose in response to the steps taken by the G-20 leaders. The Standard & Poor’s 500 Index climbed 2.9 percent to 834.38. The Dow Jones Industrial Average added 216.48 points, or 2.8 percent, to 7,978.08. Both closed at their highest levels since the second week of February.

In an effort to promote harmony, Obama soft-pedaled earlier U.S. demands that the summit agree on a specific target for fiscal stimulus in the face of opposition from France and Germany. Instead, he settled for a vague pledge that the leaders would do whatever it takes to revive the global economy.

Repudiation of Past

The president also signed on to a communiqué that Nobel Laureate Joseph Stiglitz said repudiated the previous U.S.-led push to free capitalism from the constraints of governments.

“This is a major step forward and a reversal of the ideology of the 1990s, and at a very official level, a rejection of the ideas pushed by the U.S. and others,” said Stiglitz, an economics professor at Columbia University. “It’s a historic moment when the world came together and said we were wrong to push deregulation.”

In bowing to that view, the leaders conceded in a statement that “major failures” in regulation had been “fundamental causes” of the market turmoil they are trying to tackle. To make amends and to try to avoid a repeat of the crisis, they pledged to impose stronger restraints on hedge funds, credit rating companies, risk-taking and executive pay.

“Countries that used to defend deregulation at any cost are recognizing that there needs to be a larger state presence so this crisis never happens again,” said Argentine President Cristina Fernandez de Kirchner.

Financial Stability Board

A new Financial Stability Board will be established to unite regulators and join the IMF in providing early warnings of potential threats. Once the economy recovers, work will begin on new rules aimed at avoiding excessive leverage and forcing banks to put more money aside during good times.

German Chancellor Angela Merkel, who had unsuccessfully sought to convince the U.S. and Britain to sign on to similar steps before the crisis began in mid-2007, hailed the communiqué as a “victory for common sense.”

The U.S. did, though, take the lead in getting the summit to agree on an increase in IMF rescue funds to $750 billion from $250 billion now. Japan, the European Union and China will provide the first $250 billion of the increase, with the balance to come from as yet unidentified countries.

“This will provide the IMF with enough resources to meet the needs of East European nations and also provide back-up funding to a broader set of countries,” said Brad Setser, a former U.S. Treasury official who’s now at the Council on Foreign Relations in New York.

IMF Allocation

The G-20 also agreed to an allocation of $250 billion in Special Drawing Rights, the artificial currency that the IMF uses to settle accounts among its member nations. The move is akin to a central bank such as the Federal Reserve effectively creating money out of thin air, except it’s on a global scale.

The increase in Special Drawing Rights will allow countries to tap IMF money without having to accept changes to economic policies often demanded as a condition of aid. The cash is disbursed in proportion to the money each member-nation pays into the fund. Rich nations will be allowed to divert their allocations to countries in greater need.

The G-20 said they would couple the financing moves with steps to give emerging economic powerhouses such as China, India and Brazil a greater say in how the IMF is run.

Emerging Markets Benefit

Citigroup Inc. economists Don Hanna and Jurgen Michels called the summit agreement “a boon to emerging markets” in a note to clients yesterday.

Mexico said Wednesday it will seek $47 billion from the IMF under the Washington-based lender’s new Flexible Credit Line, which allows some countries to borrow money with no conditions.

Emerging-market stocks, bonds and currencies rallied yesterday on speculation other developing nations will follow Mexico’s lead. Gains in Polish, Czech and Brazilian stocks helped push the MSCI Emerging Markets Index up 5.6 percent to 613.07, the highest since Oct. 15.

In a bid to avoid another mistake of the depression era, G-20 leaders repeated an earlier pledge to avoid trade protectionism and beggar-thy-neighbor policies that could aggravate the decline in the global economy.

The Paris-based Organization for Economic Cooperation and Development predicted this week that global trade will shrink 13 percent this year as loss-ridden banks cut back on credit to exporters and importers.

Trade Finance

To help combat that, the G-20 said they will make at least $250 billion available in the next two years to support the finance of trade through export credit agencies and development banks such as the World Bank.

The summit took place amid speculation among investors that the deepest global recession in six decades may be abating. Data released yesterday showed orders placed with U.S. factories rose in February for the first time in seven months, U.K. house prices unexpectedly gained in March and Chinese manufacturing increased. Still, a report today is forecast to show U.S. unemployment at its highest in a quarter-century.

“If the economy turns more favorable, this meeting will probably be viewed as a milestone,” said C. Fred Bergsten, a former U.S. official and director of the Peterson Institute for International Economics in Washington.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union. Officials from Spain and the Netherlands were also present.

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Chavez tells Israelis to disobey 'genocidal' govt

By ALBERT AJI (AP) – 14 hours ago

DAMASCUS, Syria — Venezuelan President Hugo Chavez told the Israeli people not to support their government, which he described as "genocidal" on Friday, the second day of his trip to Syria.

Chavez is on an 11-day trip to Libya, Algeria, Syria, Iran, Belarus, Russia and Spain in what he is describing as a bid to build a multi-polar world and decrease U.S. influence in the region.

The Venezuelan president has singled out Israel for criticism during his visit to Syria, slamming it for mistreating the Palestinians and being an agent of U.S. imperialism.

"The state of Israel has become a murderous lackey at the service of imperialism," Chavez said. "It's a genocidal government. I condemn that Zionist government that persecutes the heroic Palestinian people."

Chavez, whose remarks were broadcast by state television in Venezuela, added that "the people of Israel shouldn't support a genocidal government."

Chavez spoke in front of about 10,000 people who gathered at a football stadium in the city of Sweida, some 110 kilometers south of Damascus, near the Jordanian border.

More than 200,000 people from the Sweida area carry Venezuelan citizenship and most are members of Syria's Druse sect, who immigrated to Venezuela in the past century.

Chavez later inaugurated a public garden in the city, naming it after 19th century Latin American independence leader Simon Bolivar.

The firebrand Latin American leader has built close ties with Iran, Syria, Cuba and other countries while his relations have grown tense with Israel.

Chavez strongly criticized Israel's war against Gaza in December and January and said the Jewish state should return to Syria the strategic Golan Heights that it captured in 1967 Mideast war.

Chavez also called for Israel to "take its hands off Latin America also. Because there the U.S. empire is trying to turn Colombia ... into the Israel of Latin America."

Venezuela and Colombia have been feuding for weeks over negotiations between the Colombian government and Washington that would allow the U.S. military to increase its presence at seven Colombian bases through a 10-year lease agreement.

Chavez calls the pending deal a threat to Venezuela. Colombia says it's necessary to more effectively help fight drug traffickers and leftist rebels.

Later Friday, Chavez arrived in Tehran and praised Iran for standing up to he said were "western forces" attempts to destabilize it after the elections there. The Iranian opposition alleges the country's June 12 election was rigged in Ahmadinejad's favor and that pro-reform challenger Mir Hossein Mousavi was the true winner.

After the election, Iranian security forces, including the Revolutionary Guard and pro-government Basij militia, crushed mass street protests against Ahmadinejad's re-election in a heavy crackdown that prompted heavy criticism from the West.