By Daniel Politi
The Washington Post leads with a new World Bank report that warned the global economy will fall into a recession for the first time since World War II as world trade suffers its steepest plunge in 80 years. The crisis will put a dent in poverty-fighting efforts, and multilateral lenders don’t have enough money to help developing nations get through the downturn. The World Bank called on developed nations to dedicate 0.7 percent of whatever they spend on stimulus programs toward a Vulnerability Fund to help developing countries. The New York Times leads with a look at how the dollar is increasing in value, a good thing for the United States that appears to be making the crisis worse in other countries. The dollar has risen 13 percent against major currencies in the last year and “has once again been affirmed as the global reserve currency,” declares the paper. The Wall Street Journal leads its world-wide newsbox with word that the White House will push world leaders to increase government spending to deal with the global downturn. The move could cause tensions with European governments that think overhauling financial regulation should be the first priority.
The Los Angeles Times leads with the U.S. military’s announcement that 12,000 American troops will leave Iraq within the next six months. It marks the first step in President Obama’s plan to withdraw combat forces from Iraq by August 2010. Hours before the announcement, a suicide bomber killed at least 33 people and provided a “grim reminder of the lingering danger” in Iraq, even as U.S. officials prepare the troop drawdown. USA Today leads with a look at how government-funded service programs are seeing a sharp increase in applicants this year. AmeriCorps has seen its online applications come in three times faster this year, and the number of people applying to the Peace Corps has increased 16 percent. Obama wants to boost funding for these organizations so more people can participate in the coming years.
In its report, the World Bank said 94 out of 116 developing countries are suffering through an economic slowdown and estimated that approximately 46 million people will be pushed into poverty this year. The report called attention to what has been called a “crisis within a crisis” as troubles that started in the developed world are beginning to spiral into developing nations. The IMF has been giving out billions of dollars to nations in need, but there’s a growing concern about what will happen in nations that are thought to be relatively well-off and not traditional recipients of IMF funds but that don’t have enough money to pursue their own bailouts. “I’m worried about what happens when you see that a Greece or an Ireland that might need bailouts,” said a former IMF chief economist. “Where is the money going to come from?”
As more American investors are staying away from foreign markets and U.S. debt continues to be an attractive place to sink money for foreigners, the dollar is increasing in value and providing much-needed financing for the United States. But as more money goes into the United States, there’s less of it to flow into developing countries. Although developing countries would normally be able to benefit from a devalued currency, since it makes their exports cheaper in the world market, that might not work so well this time around, considering that the global recession is decreasing demand for their products.
At the Group of 20 summit in London, Obama plans to push leaders to increase government spending, but many European nations want the meeting on April 2 to focus on tightening regulations on financial markets. U.S. officials insist the world will be looking at the summit to figure out whether the most economically powerful nations can come up with a coordinated response to stem the global downturn. A White House official tells the WSJ that coming up with a coordinated course of action to deal with the crisis is the “first and most important” goal of the summit.
The WSJ fronts a look at how credit markets are freezing up again after some signs earlier this year that they were thawing. Fear appears to be increasing among investors as they wait for more details from the government about its plans to boost ailing banks. Bond investors are particularly worried that the government rescue packages “are undermining the very foundations of bond investing: the right of creditors to claim their assets first if a borrower defaults,” explains the Journal. Analysts worry that the credit markets will continue to deteriorate until the government clearly outlines its plans for the financial sector. So far, investors seem only to trust securities that are explicitly backed by the government, since nobody knows the true value of bonds that aren’t affected by the bailout.
While much attention has been paid to Obama’s plans to sign an executive order that will lift the limits on funding for human embryonic-stem-cell research today, the NYT points out that the president plans to sidestep “the thorniest question in the debate” and leave it to Congress to decide whether government funds should be used to finance experiments on human embryos. Unless Congress decides not to renew the Dickey-Wicker amendment, which first became law in 1996, researchers won’t be able to create their own stem cell lines. Obama doesn’t plan to take a position on the issue.
Along with the executive order dealing with stem cell research, Obama will also issue a presidential memorandum that will seek to “restore scientific integrity” to public policy decisions. The goal would be to protect scientific decisions from political influence across the federal bureaucracy.
The LAT fronts word that Pakistan has thwarted efforts by U.S. counter-terrorism officials to find would-be terrorists currently living in the United States. After the Mumbai attacks, U.S. officials sought to learn more about the Pakistani group thought to be responsible and to figure out whether any additional plotters might be living in the United States or might be citizens of a country that doesn’t require a visa to enter the United States, such as Britain. Some think that extremists with ties to Lashkar-e-Taiba now pose the biggest threat to the United States. Evidence collected from militants suggests that there are Lashkar representatives in several cities in the United States. Pakistani officials say the government wants to cooperate but can’t turn over all its information in one sitting.
As the Obama administration announces the first step in the withdrawal of combat troops from Iraq, USAT reports on new figures from Afghanistan that illustrate how the country is deteriorating. Improvised explosive devices killed 32 coalition troops in the first two months of the year, compared with 10 during the same period last year. The increase in attacks “foreshadow a violent spring and summer,” notes USAT.
In the WP‘s op-ed page, Robert Samuelson calls Obama “a great pretender.” The president claims his budget makes hard choices and will usher in a new era of responsibility when it does nothing of the sort. And it’s not just the budget. Obama “repeatedly says he is doing things that he isn’t, trusting his powerful rhetoric to obscure the difference.” A responsible president would make the “tough choice” of concentrating on the economy, and leave “his more contentious agenda” for another day.
The WP‘s E.J. Dionne Jr. says “it’s balderdash to call Obama’s policies ‘radical.’ ” In fact, in trying to deal with the ailing banks, it seems Obama is really interested in pursuing a moderate course, but this is a case where “moderation may be exactly the wrong recipe.” So far, all the money that has been injected into banks appears to have had no effect, and no one is sure how the administration’s actions will eventually lead to a recovery. “Obama’s calm and deliberative style is one of his greatest strengths. … But sometimes excessive caution can be as dangerous as impetuousness. The president has no choice but to be bold. If there is one thing he should fear, it is fear itself.”