Reporting from Los Angeles and London -- The G-20 leaders will pour at least $1 trillion into the global economy in an effort to stimulate recovery from a worldwide downturn and will push for greater regulation of the financial industry, officials said this morning.
In a televised news conference from London, British Prime Minister Gordon Brown announced the key elements of the plan, including an additional $500 billion for the International Monetary Fund, $250 billion in IMF Special Drawing Rights and $250 billion to boost trade.
The leaders of the major economies also pledged to work on such regulatory issues as pay and bonuses for executives and bringing financial instruments such as hedge funds into tighter government control. Many blame the new investment instruments, including derivatives and credit swaps, for the economic contraction around the world.
"This is the day that the world came together to fight back against the global recession," Brown told reporters.
"Our message today is clear and certain. We believe that in this new global age, our prosperity is indivisible,' he said. "We believe that growth, to be sustained, must be shared, and that trade must once again become an engine of growth. The old Washington consensus is over; today we have reached a new consensus."
"There are no quick fixes. But with the six pledges that we make today, we can shorten the recession and save jobs."
The six pledges may not have been everything Obama said he wanted, but it is excellent nonetheless. And when you're dealing with someone like Obama, a cautious poker player, it's difficult to say that his "Ask" wasn't merely a strategic opening, leading to the outcome he originally desired. A trillion dollars is no slouch, and the work to strengthen regulations is key to establishing a healthy period of real economic growth.
The Republicans really need to learn how to set expectations. They've turned this trip from an impending disaster, where the EU rebukes Obama harshly, into a remarkable accomplishment, with Obama brokering deals and closing the breach between American and the rest of the world.