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...laced industrial units, the grinding of saws behind closed doors drowning out the faint crackle of the power lines overhead. Inside a tiny corrugated iron shell, the air thick with the smell of fried eggs and sausage, Ahmet Yucetan's café relies on the local laborers for its trade. Business is down 30% in recent weeks, and he's already laid off one member of staff. But he's holding out little hope for help from the G-20. "People," the burly 50-year-old says, "are left to fight for themselves...

Author: /time Magazine | Title: G-20 Site: 'A Cesspool, Bubbling with the Foul Products of Decomposition' | 4/1/2009 | See Source »

...elephant in the room on Wednesday. But he brought it up anyway, during a joint press conference with British Prime Minister Gordon Brown. A British reporter asked Obama about the proper size of government stimulus spending, and the U.S. President decided to talk about the perilous balance of global trade...

Author: /time Magazine | Title: The G-20's Hidden Issue: A Global Trade Imbalance | 4/1/2009 | See Source »

...Largely left out, however, is the vital role that trade balances played in igniting the crisis in the first place. Since the late 1990s, the U.S. has been spending far more than it has earned, sending huge sums of capital overseas, a dynamic measured as the current account deficit. This "giant pool of money," as the radio program This American Life described it, did not stay in low-spending surplus countries like China or oil-producing states. Instead, much of it came back to the U.S. in the form of cheap credit. "Like water seeking its level, saving flowed from...

Author: /time Magazine | Title: The G-20's Hidden Issue: A Global Trade Imbalance | 4/1/2009 | See Source »

...glut of investment led to what economists call an "underpricing of risk," as lending standards were weakened and leverage grew. Economists now widely agree that the systemic sloshing about of capital was a recipe for disaster. If a lack of regulation allowed the fire to spread quickly, the global trade imbalance provided the dry kindling to start...

Author: /time Magazine | Title: The G-20's Hidden Issue: A Global Trade Imbalance | 4/1/2009 | See Source »

...Over the past year, government officials have been somewhat hesitant to bring the issue of trade imbalances up because it isn't as pressing as getting people back to work and restoring confidence. At the first meeting of the G-20 last fall, it was hardly mentioned at all. But as former Treasury Secretary Hank Paulson said in November, it cannot be left untreated over the long term. "The pressure from global imbalances will simply build up again until it finds another outlet," he explained. (Read "The G-20 Summit: Obama Can Stay Home...

Author: /time Magazine | Title: The G-20's Hidden Issue: A Global Trade Imbalance | 4/1/2009 | See Source »

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