Cox & Stokes: US Foreign Policy 
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Essay questionsCox & Stokes: US Foreign Policy
Obama's search for 'unity' in response to the financial crisis
The run-up to the London G-20 summit has witnessed fresh indications of President Barack Obama's vision for the future global economy and the economic dimensions of his foreign policy. This meeting of the G-20 – an informal forum of representatives from industrial and emerging market countries – has come to be seen by many as key initial testing ground for President Obama's plans to rejuvenate the world economy. Coming as it does in the midst of a worsening global economic downturn, the President's ability to mesh the priority of financial recovery for the US (and the world) with previously stated goals such as reducing carbon emissions will come under severe scrutiny.
Equally, Obama's ability to foster and build consensus from among the multitude of voices at the summit will doubtless be regarded as an indicator of the prospects for a renewed era of US leadership of the world economy. Obama himself has been keen to portray the summit as an opportunity to send 'a strong message of unity' on how the world should confront the global financial crisis. 'The most important task for all of us is to deliver a strong message of unity in the face of crisis', the President told journalists before travelling to the summit. Obliquely the call for unity refers to an emerging division over the merits of financial stimulus packages versus the need for greater regulation of financial markets, and this division has both national and international facets. At home, Obama admitted that the idea of 'bailing out' those on Wall Street could be seen by voters as intervening to save those who many view as culpable in the financial crisis. Abroad, it has been widely reported that German Chancellor Angela Merkel is sceptical about the President's economic strategy. Whilst Obama is said to favour greater commitment from Germany and France to stimulus packages (as has been the strategy in the US), Merkel has insisted that tighter regulation of US financial markets is key to global economic recovery.
The context described above indicates emergent fissures between the US and some of its European partners on the issue of economic recovery, and such tensions may well limit the overall significance of the London summit. Irrespective of the summit outcomes, though, the wider question of the US vision for the future global economy and for the place of the US within it remains. Indeed, it is likely to be a defining issue for the Obama administration.
At present, the rhetoric of Obama and his administration adheres closely to what Peter Gowan (see Chapter 17 of the textbook on 'Global Economy') terms as the 'multilateral image': it stresses the language of multilateral co-operation as the key to economic success for the US (and for other states), and thus dovetails with the administration's broader foreign policy. As Obama recently stated, 'All of us are going to have to take steps to lift the [world] economy. We don't want a situation in which some countries are making extraordinary efforts and some others aren't, in the hope that those who are taking those important steps will lift everybody.'
But actually creating and maintaining international co-operation on this issue will require delicate political manoeuvring and, prospectively, a concerted effort to restructure an ailing world economy that many would argue is largely a product of American economic dominance in the post-World War II era (see the section on the 'world empire' analysis of US economic power as outlined by Gowan). The key question now is whether the Obama administration can use its political capital to reshape the world economy, even when the economic dominance of the US is no longer so unquestionable.
Think Points:
Is the current financial crisis an indicator of too much or too little involvement of the US in the global economy in the post-Cold War era?
Why are the key points of consensus/disagreement between the US and the EU on economic recovery?
Should the US encourage reform of key international economic institutions such as the IMF and the World Bank?
Are economic recovery and action against climate change compatible goals in US foreign policy?
How would proponents of the 'world empire' image of global economy explain the current financial crisis and the role of prior US economic policy in it?
How important is US leadership for global economic recovery?
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