New York Times Overreacts to Strife at G-20

Looks like the Times overreacted to the lack of substantive agreement at the G-20 with its print headline this morning:

Obama's Economic View Is Rejected on World Stage

From the Times' online report later this morning:

SEOUL, South Korea — Leaders of the world’s biggest economies agreed on Friday to curb “persistently large imbalances” in saving and spending but deferred until next year tough decisions on how to identify and fix them.

The agreement, the culmination of a two-day summit meeting of leaders of the Group of 20 industrialized and emerging powers, fell short of initial American demands for numerical targets on trade surpluses and deficits. But it reflected a consensus that longstanding economic patterns — in particular, the United States consuming too much, and China too little — were no longer sustainable...

The G-20 leaders largely endorsed an approach to imbalances that finance ministers, including Treasury Secretary Timothy F. Geithner, hammered out last month at a meeting in Gyeongju, South Korea, but added a timetable.

The finance ministers, along with the heads of central banks like the Federal Reserve, are to agree by mid-2011 on “indicative guidelines” for identifying big, persistent imbalances, and Mr. Hu said China would host meetings to establish those guidelines.

The International Monetary Fund will then conduct an analysis of the “root causes” of the imbalances and the damage that they cause, by the next G-20 leaders’ meeting, to be hosted by France late next year. The goal, the leaders said, was to “facilitate timely identification of large imbalances that require preventive and corrective actions to be taken.” 

Yes, the unwieldy group papered over deep differences. The FT mocks the communique's "woolly language on indicative guidelines which had little meaning." But according an adjudicating role to the expanded IMF is a positive step. This agreement could be seen as much an attempt to establish a basis for collective authority as it is a deferral. Here's how David Cameron put it to the FT:

David Cameron, UK prime minister, said the “tensions” and “pressures” over currencies and trade imbalances were “never going to be solved overnight”, adding that the G20 process remained valuable. “The key thing is, it is being discussed in a proper multilateral way without resort to tit-for-tat measures and selfish policies”.

If the G-20 puts a significant brake on such tit-for-tat, that is an advance in global coordination. Obama's assessment in the Times seems fair enough:  “Instead of hitting home runs, sometimes we’re going to hit singles. But they’re really important singles.”

Not a strikeout.