By Mike Whitney and cross-posted from Counterpunch.org
Finance ministers and central bankers from the world’s biggest economies met in Shanghai, China over the weekend to discuss many of the problems for which they alone are responsible. Leading the list of issues, was the steady deceleration in global growth which, to great extent, is the result of experimental monetary policies central banks implemented following the recession in 2009. Surprisingly, the group admitted that their “easing strategies” had failed to produce the durable recovery that they sought, but at the same time, they made virtually no effort to correct their mistake by making the changes necessary to shore up flagging global output. Here’s a brief recap fromBloomberg:
“Finance chiefs from the world’s top economies committed their governments to doing more to boost global growth amid mounting concerns over the potency of monetary policy.
In a pledge that will prove easier to write than deliver and may disappoint investors looking for a coordinated stimulus plan, the Group of 20 said “we will use fiscal policy flexibly to strengthen growth, job creation and confidence.” After a two-day meeting in Shanghai, finance ministers and central bank governors also doubled down on a line from their last gathering that “monetary policy alone cannot lead to balanced growth.”
This is complete gibberish. Finance chiefs from the world’s top economies did not commit their governments to do more to boost global growth. Quite the contrary, they didn’t lift a finger to change anything. That’s why Wall Street has its knickers in a twist, because they didn’t get the lavish handouts they were hoping for. You see, now that stocks are on the ropes and corporate profits have been dropping for two consecutive quarters (which is a sign of impending recession), the big money guys want more favors from Uncle Sugar, this time in the form of fiscal stimulus and “structural reforms” which is an opaque “pro-business” buzzword that refers to the further slashing of workers wages, additional tax cuts for voracious corporations, and more lifting of government regulations to make it easier for Wall Street to fleece We the People.
What the markets were hoping for was some indication that more government freebies were on the way. But the finance ministers couldn’t agree about anything, so the whole issue of stimulus was scrapped. In other words, Wall Street got zilch. That’s why they’re so upset…
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