How about some change we can believe in

On the first market day following S&P's downgrade of U.S. debt, the world looked to Washington for leadership and confidence. Instead, the world got a few minutes of dispiriting remarks from a President that is clearly in over his head.

On Friday, we learned that the United States received a downgrade by one of the credit rating agencies -- not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act. The markets, on the other hand, continue to believe our credit status is AAA. In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.” I, and most of the world’s investors, agree.

Investors didn't agree. The Dow Jones Industrial Average, which was already down about 400 points when the President went on the air, dropped another 200 points in the final two hours of trading.

Investors and the rest of the world were surely looking for concrete steps to stem the crisis. Instead, the President used the White House stage to chide Congress for its intransigence and to make a vague call for change. At the same time, the President revealed that he had nothing to offer beyond some empty words.

Given the crisis that we are facing, Congress should immediately call itself back into session. The President and Congress should then take the following steps to improve the economy and restore confidence:

• Ratify the outstanding free trade agreements with South Korea, Panama, and Columbia that Republicans want and the extension of Trade Adjustment Assistance that Democrats want. The President and Congress appear to have an agreement for these four pieces of legislation to begin moving forward in September, but why not remove all uncertainty and pass the package now?
• Negotiate an agreement for and pass the fiscal year 2012 federal budget. The budget should include a continuation of the 99-week unemployment benefits.
  
• Complete and pass the two-year bipartisan transportation reauthorization that has been negotiated by Senators Barbara Boxer and James Inhofe.
• Negotiate and pass the long-term reauthorizations of the FAA, No Child Left Behind, and a host of other bills stalled by partisan infighting.
• Drop all single-senator holds on the President's nominees and hold votes on the nominees' confirmations.

None of these actions would be a magic bullet. However, action on each is needed, could make modest improvements to the country's economic functioning, and is achievable in short order. Despite their "small ball" nature, completion of each would be a vast improvement over lurching from one self-inflicted crisis to the next.

Positive reviews for the President's first major foreign trip

Steve Pearlstein comments favorably on the President's trip to the G-20 summit.

International economic summits deserve to be regarded with skepticism: The most important decision to come out of them is usually the call for yet another meeting.

But yesterday's G-20 meeting in London was an exception. While President Obama may have overstated things a bit when he declared it a 'turning point' for the now-shrinking global economy, the meeting did manage to boost the confidence of financial markets, inject another trillion dollars into the financial system and provide needed political cover for world leaders to take unpopular actions back home.

Pearlstein concludes

All in all, a pretty successful opening-night performance for President Obama on the international economic stage. He achieved most of what he wanted while allowing others to claim victory and allowing the United States to shed its Bush-era reputation for inflexibility and heavy-handedness. And by the standards of past summits, this one was full of accomplishment.

Fred Kaplan has positive comments for the President's return to realistic diplomacy

Vast multinational conferences, like the G20 summit in London, are useful mainly for the "bilaterals"—the one-on-one side-room conversations—and, in these forums, President Barack Obama is living up to high expectations.

Which is to say, the United States seems to be returning to diplomatic basics—a development that in the wake of the last eight years is practically revolutionary.

...At his press conference on Wednesday, Obama emphasized that the United States and Russia have serious differences and that he wouldn't paper over them; from the start, he told Medvedev to forget about recognition of Abkhazia or South Ossetia as independent states, and he protested the beating of prominent human rights activist Lev Ponomaryov. But Obama also said he wouldn't let those differences get in the way of vital matters—such as nuclear proliferation, counterterrorism, regional conflicts, and international trade—where cooperation could promote (again) the interests of both countries.

An analysis piece in the New York Times paints a more modest picture

After more than 11 hours of meetings, Mr. Obama emerged Thursday from his first summit meeting with a handful of modest concrete commitments. He did not get much of what American officials had been hoping for, notably failing to persuade other countries to commit to more fiscal stimulus spending.

But he, along with the other world leaders present, did get a more forceful and detailed blueprint for a global recovery than a similar gathering 86 years ago, when an earlier generation failed to take collective action to counter the Great Depression. 'By being willing to accommodate European leaders on the need for better regulation of financial markets and emerging market leaders on their desire to have less protectionism,' said Eswar S. Prasad, a former China division chief at the International Monetary Fund, Mr. Obama 'has certainly guided the G-20 leaders to a positive outcome.'

'All in all, not a bad day’s work,' Mr. Prasad added.

Mr. Obama’s own assessment? 'Well, I think I did O.K.'

And to think, he did it all without once peering into President Medvedev's soul (or at least had the common sense to refrain from saying that he did).

The performance at the summit comes at the end of a week that could have gone disastrously. Recall that on Monday, the President rejected the turn-around plans offered by GM and Chrysler and set the stage for potential bankruptcies for both companies--a harsh dose of transparency that initially sent the stock market reeling and could have led to further panic. Instead, he was able to deliver grim news, while keeping the country calm.

The President is demonstrating that he can confront challenges realistically.