On November 15 leaders of the world's twenty-biggest economies will gather in Washington to discuss a coordinated response to the worst global financial crisis since the Great Depression. President Bush will host the meeting. Although president-elect Obama has declined an invitation, expectations for what pundits have dubbed "Bretton Woods II" are high. The original Bretton Woods established a new international monetary order: a fixed exchange-rate system based on dollar-gold convertibility. But we shouldn't expect a similar breakthrough at the Washington summit.
Let's start with timing. Contrary to mythology, the Bretton Woods accords were not hammered out in a single meeting. Rather they were the culmination of years of arduous bargaining between U.S. Treasury official Harry Dexter White and his British counterpart John Maynard Keynes, the twentieth century's most influential economist. The upcoming Washington meeting, convened in the midst of a global crisis, will not benefit from any such thoughtful preparation, reducing the likelihood of major innovation-and raising the risk that any proposals submitted may be ill-considered. Moreover, Bretton Woods occurred under the auspices of Franklin Roosevelt, a president cruising toward an unprecedented fourth election victory. Next week's summit will be hosted by a lame duck with dismal approval ratings. We should not expect any vigorous U.S. leadership on this agenda until Obama is sworn in.