Tales from the Trail

Washington Extra – Ducking the issue

U.S. Treasury Secretary Timothy Geithner testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on The Treasury Department's Report on International Economic and Exchange Rate Policies on Capitol Hill in Washington September 16, 2010.

We were all primed for the release of the Treasury’s global currency report this afternoon, which would have included a ruling on whether China was a currency manipulator. But a decision was taken to delay the report until after the Group of 20 summit in Seoul in mid-November.

Pressure from lawmakers and business had been mounting on President Barack Obama to act, but the delay shouldn’t come as a big surprise. After all, Treasury Secretary Tim Geithner told Congress last month he wanted to rally the G20 around the issue and take a multilateral approach. Perhaps more importantly, the administration is conveniently ducking the issue until after the Nov. 2 congressional elections.

Some Democrats, who have made China’s currency practices an issue in their campaigns, are disappointed today. Our Breakingviews columnist James Pethokoukis says Obama should be given credit for resisting populist pressures for the second time this week, after also declining to heed appeals to impose a national moratorium on home foreclosures.

That may be true but Obama also knows no amount of populism is going to help his party in the midterms, and he is already looking ahead.

It is safe to assume the president wants to avoid starting the second half of his term embroiled in a damaging trade war with China, which also happens to be the largest holder of U.S. government debt. The administration clearly thinks a direct confrontation would be counterproductive, make the Chinese dig in their heels and, if they stop buying U.S. debt, potentially push up long-term interest rates. There are also big issues to address around market access and intellectual property rights, which confrontation would have obscured.

Driving Mr. Summers on financial regulation reform, G20

USA-SUMMERS/Larry Summers, a top economic adviser to President Barack Obama, is a realist when he says “people are imperfect and we have not seen the last misjudgment.”

So,  in his view, financial regulatory reform is just as necessary as, well, laws aimed at ensuring safe driving.

He cites the late Senator Daniel Patrick Moynihan’s belief that people being people are probably going to drive fast and recklessly, and so it would be wise to encourage seat-belt use, build crash-proof bumpers, design highways more carefully, arrest people for drunk driving, and establish a system that made accidents less likely to result from human error.

Hotter ties with Brazil? Tap Obamamania, says expert

BRAZIL-CARNIVAL/The United States’ influence in its traditional “backyard” is waning and needs a boost. Washington should be forging closer ties with Latin America’s emerging powerhouse Brazil, says Johns Hopkins political scientist Riordan Roett.

Best way to do that? Send the Obamas to Brazil because Brazilians will go nuts about the U.S. First Family.

“The White House should send the Obamas to Brazil. Can you imagine the Obamas getting off the plane in Rio de Janeiro? It would be extraordinary, a carnival, absolute madness,” Roett told the Reuters Latin American Investment Summit.

The other G20 news: Obama Olympics, White House honey

Olympics intrigue broke out in the middle of all the U.N., G20, world leader stuff with the rumor that perhaps President Barack Obama might go to Copenhagen after all to pitch his hometown Chicago as the site for the 2016 Summer Games. OLYMPICS-SPORTS/

White House spokesman Robert Gibbs fanned the flames further when asked whether it was possible Obama may go. “Absolutely,” he told reporters on Air Force One headed to Pittsburgh for the G20.

In Washington speak that’s about as close to saying he’s going without announcing he’s going.

First Draft: royal iPod

President Barack Obama gave the Queen an iPod filled with show tunes and pictures from her visit to America. Now watch for those tell-tale ear buds under Her Majesty’s crown.

“I think it was a fun gift for the Queen,”  White House spokesman Robert Gibbs told ABC’s “Good Morning America” from London where Obama is attending the G20 summit. ”I think it was a real treat to call back and tell his kids that he’d met the Queen.” G20/

Obama apparently came away with warm feelings for the British royals after his private meeting at Buckingham Palace. “The president remarked to me this morning that her sensibilities sort of reminded him a bit of his grandmother, only with a much bigger house,” Gibbs told NBC’s “Today.”

First Draft: Queen tea

Protesters hijacked April Fools Day, spinning it into “Financial Fools Day” in London where President Barack Obama and other world leaders are attending the G20 summit.

BRITAIN-POLITICS/Meanwhile back at the Palace, Obama and wife Michelle are invited for tea with the Queen. Will the first lady’s curtsy meet muster?

A little detente is in the air. The United States and Russia saying they will pursue a new deal to cut nuclear warheads as the former Cold War rivals try to rebuild relations after the recent chill.

First Draft: Atlantic crossing

Greeted like a rock star last year in Germany when he was a mere candidate for the White House, Barack Obama will see what reception he gets in Europe now that he’s actually president.

Obama, in dark suit, and his wife Michelle, in white coat with black trim, walked up the stairs to Air Force One, did the obligatory turn and wave, and then they were off.

The arms issue may be raised again if the first lady decides to go sleeveless.OBAMA/

No matter what they think overseas, a new Washington Post-ABC News poll shows Michelle Obama is quite popular at home, with 76 percent of those surveyed giving her a favorable rating.

from MacroScope:

Watch out for the G20 spin

Be careful this week about buying wholeheartedy into any G20-related spin about supposedly savvy, free-spending Britain and America doing more to combat the world economic crisis than supposedly stubborn, overly cautious Germany and France. The actual figures show it is much more complex than that.

A Reuters calculation on discretionary fiscal stumuli and the International Monetary Fund's assessment show that, if anything, Britain is the significant laggard and that German spending almost matches the United States over the next two years. Here are the IMF's numbers (% of GDP):

                                                          2009                     2010