Small groups, gathered in meeting rooms scattered around the world and focused on a single issue, can affect the way we live, at least now and perhaps for a long time. And not necessarily for the better. Consider only this week’s conclaves.
In Washington, D.C., the Federal Reserve Board’s monetary policy gurus met and decided to keep interest rates low even though they agreed that the economy is improving.
Meanwhile, meeting in committee rooms and in the corridors of power, Congress gave the White House what its economists and the president, meeting in the Oval Office, demanded: More stimulus spending.
Meanwhile, in Vienna, members of OPEC met and decided that $80 is just about the right price for their crude oil. That means the cartel is not prepared to support the fragile worldwide recovery by lowering oil prices.
On to meetings in China. At the regime’s annual gathering, its leaders made it clear the peg of the yuan to the dollar is here to stay for a good while. The OPEC meeting reduced the hopes of the Washington meeting that the economy would resume growth, and the Beijing meeting put a damper on hopes that the U.S. could engineer an export-led reduction in unemployment.
Not to be outdone by meetings in Washington, Vienna and Beijing, Europe held its own round. In Brussels, key European Union officials met and agreed that Greece would not be allowed to go under and, more important, in effect agreed to extend monetary union to fiscal affairs.
The real question is whether these meetings really matter, whether they are full of sound and bottles of mineral water, but signify nothing. It’s arguable that in the end you can’t fight markets. If Iraq returns to full production and natural gas realizes its potential, all of OPEC’s resolutions will not keep oil at $80.
If the rating agencies decide continued deficits in America are taking sovereign and related debt to levels that will place a claim on too large a portion of national income, nothing the Fed will be able to do at any meetings will prevent interest rates from rising and growth slowing.
But that’s for the long run. At least for now we must live with results of these many meetings. Fiscal policies that increase national debt. Continued loose monetary policy that threatens a return of inflation. An undervalued yen, putting pressure on President Barack Obama to resort to protectionism to create “good, high-paying American jobs.” High oil prices. Not very happy results of all these meetings.
And soon Obama will fly off to still more meetings. Perhaps the world’s luck will turn, and positive results will be had. But only perhaps.
Examiner columnist Irwin M. Stelzer is a senior fellow and director of the Hudson Institute’s Center for Economic Policy Studies.