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Looking Towards the London G-20 Global Growth Summit

What Will Replace the American Consumer?

Bernard L. Schwartz Economic Symposium

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For the past decade and a half, U.S. consumption has been the principal driver of world economic growth, supplying demand for the consumption of goods that propelled the world economy.

As the U.S. struggles with recession and its consumers are forced to retrench, leaders of the G-20 Summit must make it their first priority to search for new engines of global growth.

Highlights include:

A full agenda and list of participants follows, along with short synopses of each discussion. Video of the full event is available at right; transcripts, MP3 recordings and video excerpts are available below.


Welcoming Remarks

8:45 am
Transcript | Full Video | Video Highlights | MP3

After opening remarks by Steve Coll and Steve Clemons, Bernard L. Schwartz commended the progress of the Obama administration’s recovery program but also offered the critique that the plan is still too small, too unfocused, and too short term. The main objective, he said, should have been on job creation to help overcome the twin decreases of consumer and manufacturing activity in the United States.

Steve Coll
President, New America Foundation
Former Managing Editor, Washington Post
Staff Writer, The New Yorker

Bernard L. Schwartz
Chairman, BLS Investments LLC
Former Chairman & CEO, Loral Space & Communications
Board Member, New America Foundation
Co-Author, "An Economic Recovery Program for the Post-Bubble Economy"

conference moderator and provocateur
Steve Clemons
Director, American Strategy Program, New America Foundation
Publisher, The Washington Note

Opening Keynote Discussion: In the Wake of Collapse: What the U.S. Consumer Left Behind

9:00 am
Transcript | Full Video | Video Highlights | MP3

Martin Wolf and Laura D’Andrea Tyson discussed the G-20 and the Obama Administration’s options for a faster economic recovery.

Wolf stated that the G-20 meeting in April must, at a minimum, reach a consensus that surplus countries like China, Japan and Germany must commit to increasing demand, and that the IMF and other international institutions should provide credit for emerging economies.

Tyson added that the Obama Administration understands the economic crisis was tied closely to the erosion of the incomes and spending power of the middle-class, and that Obama’s policy will be more supportive of working families in America.

The Hon. Laura D'Andrea Tyson
S. K. and Angela Chan Chair in Global Management and Public Policy, Haas School of Business, U.C. Berkeley
Former National Economic Advisor to President Bill Clinton
Board Member, New America Foundation

Martin Wolf
Chief Economics Commentator and Associate Editor, Financial Times
Author, Fixing Global Finance

Panel Discussion-Conversation: The Search for Domestic Drivers of an Economic Recovery

10:00 am
Video | MP3

In this discussion focused on sources of a domestic economic recovery, there was broad consensus among the panelists that the U.S. must move away from debt-financed consumption and toward job creation and competitiveness in the tradable goods sector.

The group largely agreed that the Obama Administration should do this through financial-sector reform, more government stimulus, and strategic public investment.

Mark Zandi
Chief Economist and Co-Founder, Moody's Economy.com
Author, Financial Shock: Global Panic and Government Bailouts

Tom Gallagher
Senior Managing Director, International Strategy and Investment (ISI) Group

Richard Vague
Chairman & CEO, Energy Plus
Founder and Former Chairman & CEO, First USA Bank
Founder and Former CEO, Juniper Financial/Barclays USA

Leo Hindery
Managing Partner, Inter-Media Partners
Former CEO, AT&T Broadband and Yankee Entertainment Sports Network
Chairman, New America Foundation/Smart Globalization Initiative

Jeff Madrick
Director of Policy Research, Schwartz Center for Economic Policy Analysis, The New School
Author, The Case for Big Government

Panel Discussion-Conversation: Can Global Demand Come to the Rescue? What Must We See From the G-20 London Summit?

11:00 am
Video | MP3

Panelists expressed concern that the global economy is now in far worse shape than the U.S. Furthermore, there was a shared fear that leaders in many countries are unwilling or unable to advance policies that will contribute significantly to global demand.

Nicholas Lardy and William Gerrity noted that China’s consumer culture has matured and that the government understands the need to reorient the economy. Yet China’s reforms are not sufficient to fill the consumption gap left behind by U.S. consumers in the near or even medium term.

Sherle R. Schwenninger
Director, Economic Growth Program, New America Foundation
Co-Author, "An Economic Recovery Program for the Post-Bubble Economy"

Desmond Lachman
Resident Fellow, American Enterprise Institute

Clyde V. Prestowitz, Jr.
President and Founder, Economic Strategy Institute
Author, Three Billion New Capitalists: The Great Shift of Wealth and Power to the East

Nicholas Lardy
Senior Fellow, Peterson Institute for International Economics
Co-Author, China's Rise: Challenges and Opportunities

William Gerrity
Chairman & CEO, Gerrity International

Remarks and Discussion: Undoing Fundamentalism: What Would a Sensible Strategy for Economic Recovery Look Like?

12:00 pm
Transcript | Video | MP3

In closing comments, George Soros offered thoughts on the nature of bubbles and his theory of reflexivity, and critiqued the Obama Administration’s failure to adequately capitalize banks upon assuming office. "At that moment of enthusiasm, fresh out of the gate, he would have gotten that money, and then we could have recapitalized the banks the right way," Soros said.

Soros also stated that while developed nations such as the United States have suffered during the crisis, emerging economies that cannot finance deficits face far worse. As a response, he endorsed the proposal to increase issuance of Special Drawing Rights (SDRs) and promote other methods of extending credit to emerging economies.

George Soros
Chairman, Soros Fund Management
Chairman, Open Society Institute
Author, Crash of 2008 and What it Means: A New Paradigm for Financial Markets
(new edition released to public-30 March 2009)

 

Steve Clemons
Director, American Strategy Program, New America Foundation
Publisher, The Washington Note

Closing Thoughts

12:45 pm

Steve Coll
President, New America Foundation
Former Managing Editor, Washington Post
Staff Writer, The New Yorker

Adjournment

1:00 pm

Location

New America Foundation
1899 L Street, NW Suite 400
Washington, DC, 20036
See map: Google Maps
Issues:

Event Time and Location

Thursday, March 26, 2009 - 9:15am - 2:00pm

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