The three failures

That is because the US Senate introduced very specific amendments to meet the letter,while openly violating the spirit,of those rules. The first principle that is violated is that of coordination; in a global depression,the timing and nature of domestic fiscal stimuli is something that is an international issue. The drafters barely considered the effects of timing,for example,on this (and other countries’) stimulus’ effectiveness. In not pushing Congress into reviewing this aspect further,is the White House’s first failure. The second principle is that of patience; viewing things in terms of the short-term,second-order effects (“keep our jobs here!”) is dangerous when the medium-term,first-order effects (declining profitability for American industry) could be so pervasive. Here,again,Obama has abdicated the responsibility to make the difficult,complex arguments to Americans that would take some of the political heat off the issue.

And,finally,the third principle is that of an investment in multilateralism over bilateralism. That is precisely what has been jettisoned,even in the face-saving “compromise” version of the stimulus that Lamy damned with faint praise. That version includes the requirement that no bilateral pacts,with Canada or Europe,for example,be violated; but that will not stop it from hurting vast,vulnerable stretches of the emerging world — as well as further stalling international trade talks. It does that by increasing the urgency for individual countries to come to some agreement,however unequal and retrogressive,with the US instead of sitting down and hammering out broad international agreement. On each of these counts,the US’s support,explicit and implicit,for protectionism is deeply disturbing.