England’s Prime Minister Gordon Brown is in Washington this week. That is no major news there as he and President Obama have met 3 times now and spoken several times on the phone. What is news is why he is here.
Prime Minister Brown is here to ensure that England’s interests in the global economic future are not forgotten or over looked. He intends to discuss this at length with President Obama and the Obama administration as well as speaking directly to the US Congress about the dangers of protectionism or reducing international trade from the United States.
It is a widely held belief that if the US were to start limiting the international trade as a protectionist act, or to implement a buy American policy that other countries would follow our lead and start to reduce trade as well and institute there own buy home grown policies. The fear is that this would spark a more intense global meltdown as each countries economy depends on trade with foreign entities.
Both leaders have dumped massive amounts of money into there countries markets. President Obama has dumped trillions of dollars into the market. His latest influx was a $787 trillion dollar stimulus injection, which amounts to nearly 5.5% of the US Gross Domestic Product, or GDP as it is known. In contrast Prime Minister Brown injected an amount equal to almost 1.1% of Great Britain’s GDP as an economic stimulus. Members of the British Conservative party are echoing the sentiment of the United States Republican party. They both claim this is too much to spend, to great of an amount. Some members of the British Labour Party, of which Prime Minister Brown belongs, are saying that this is not enough. That perhaps England should follow President Obama’s example and inject the equivalent of 5 to 5.5% of Great Britain’s GDP into the markets as a stimulus. It is a gamble either way. But is it a gamble that the Prime Minister will be willing to take?
President Obama is a relative new comer to the financial turmoil that engulfs our world today, but Prime Minister Brown is not.
Before ascending to the position of Prime Minister in June of 2007 as a result of the resignation of then Prime Minister Tony Blair, he was the Chancellor of the Exchequer. A position that is similar to the US Secretary of the Treasury, but with more power. Mr. Brown held this position from 1997 until 2007 during the Blair / Bush years.
Mr. Brown is 10 years deep in the current economic mess, but if he is willing to take the gamble and both the Prime Minister and President Obama guide the international economy out of its current danger in a joint manner, both there political parties control and there career longevity may well be assured.
But the key is working together, and doing so very publicly. On his current trip Prime Minister Brown has been extolling the international willingness to cooperate and work with the United States to stem the tide of the current global economic storm. “Now, more than ever, the rest of the world wants to work with you,” “Never before have I seen a world so willing to come together. Never before has that been more needed. And never before have the benefits of cooperation been so far-reaching.”
On April 2nd England will play host to a G-20 Summit. Prime Minister Brown and President Obama are both hinting that this will be a chance for G-20 leaders to plot a course to economic recovery, of course with President Obama and Prime Minister Brown at the helm. Prime Minister Brown’s Labour party needs him to be in the public eye and to be perceived as one of the main leaders in control as they have an election cycle in the next 18 months that could remove him from power.
It is a risky gamble for Prime Minister Brown to take, but with the British General Elections so close the gain could be immense.
In the end I will look to M. A. for the perspective from England.