Tim Geithner’s new slogan 'growth friendly' 

Did Secretary of the Treasury Tim Geithner cautiously float a rhetorical trial balloon last night?

Geithner talked about the need for the G-20 countries to pursue "growth friendly" policies - that is, policies that will power faster, more robust economic expansion - before heading off to a G-20 meeting in South Korea. The phrase also appears in a draft of the declaration that will be released following the end of the Korea meeting.

Geithner's phrase (perhaps the fruit of hours of meetings and rounds of coffee with his communications advisors) also comes ahead of the G-20 summit in Toronto, Canada that will take place later this month.

“Growth friendly” is a nice-sounding label that officials in other G-20 countries headed to Toronto will be no doubt be quick to snatch and paste on their own particular solutions for the global economic slowdown. You can bet we're going to hear "growth friendly" used a lot between now and the summit kick-off in late June.

For example, much of the discussion here in Toronto may likely focus on the merits of imposing a global bank tax. Some leaders (like Geithner's boss, President Obama) believe such a tax would be growth friendly, since the money raised could be used to pay back previous taxpayer bailouts of financial institutions.

Not everyone in the G-20 is sold on the idea of a bank tax being growth friendly. The Canadians hosting the G-20 summit feel that forcing their banks to pay such a tax would be akin to an act of piracy.

Other G-20 countries, like China, are lukewarm towards the bank tax idea. Bank tax opponents will go out of their way to politely throw Geithner's "growth friendly" line back in his face when they issue their own statements and declarations in Toronto.

Shiny slogans aside, the G-20 leaders will need to be seen doing more in Toronto than just debating the pros and cons of a bank tax, if they want to avoid people back home branding the meeting as another do-nothing international talk-fest.

Right now, the minds of the G-20 political leaders and their advisers ought to be focused less on the search for phrases that sound nice in speeches and news releases, and more on workable remedies to the common economic predicament.

As an historian wrote of another period of economic difficulty, what is needed from the G-20 leaders is a commitment to focus "with intense anxiety [on] the adoption of some great and effectual [idea] by which the distresses" of the moment "might be reached at their sources."

This might include, for example, fashioning a broad agreement among the G-20 countries that capital available for investment ought to go toward truly productive activities (like manufacturing of physical goods), rather than plowing that capital into more of the often toxic and speculative financial products (like derivatives) that have been at the root of the global slowdown.

In Secretary Geithner’s “growth friendly” line, The G-20 summit in Toronto has found its “great and effectual” slogan. Now, it just needs to find actual “great and effectual” policies. Too bad the policy-making part of a summit is not quite as easy as the sloganeering part.

 

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Neil Hrab

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