Leaders gathered in Beijing to confront the financial/economic crisis. On November 15, a group of 20 will meet, hosted by Bush. The most vocal person, France’s President Sarcozy, wants more regulation. So does Chinese Premier Wen Jiabao. Their general idea is somehow to make the New Deal type banking and capital market systems work, which means expanding the House that FDR Built atop the foundation of central banking. There will be no fundamental overhaul, no movement toward free markets, and no movement toward sound money. It will be the opposite — an absorption of capital and capital markets into government. These guys constantly speak of free market failures. They only believe in government.

For years now, major central banks worldwide (as in the U.S., China, Japan, and India) have been inflating and manipulating their currencies. Equally important, governments worldwide have been manipulating trade and industrialization politically. This depression’s root causes are government policies and central banking systems worldwide. The U.S. credit and mortgage mess is bad, but it is the tip of a larger worldwide iceberg. Chinese and Japanese economic and financial policies, among others, are important causes of the current difficulties. Countries that artificially stimulate export industries while managing their currencies create major distortions in labor, capital, and capital goods markets. Government policies are coming home to roost. The political summitry going on is posturing and superficial. It is playing for local advantage and power. It will do absolutely nothing to alter the basic behavior of these States and central banks. Their game is to extend and cement the House that FDR Built.