What Should President Obama And Prime Minister Brown Discuss?

I’d like to imagine that President Obama and Prime Minister Brown will this week discuss how the global economy is worsening, and why all official forecasts need to be revised down substantially, again – with immediate implications for stress tests in the US and realistic bank recapitalization in the UK.But this is a stretch.  On the US side, too much public effort over the past week has gone into repainting a rosy baseline – e.g., in Chairman Bernanke’s testimony last Tuesday and the budget documents unveiled on Thursday.  No leader can back away so quickly – even in private – from this kind of thinking, no matter how much they now begin to worry about the latest haphazard rounds with Citi/AIG or the worsening of financial markets around the world.  Both Obama and Brown are unfortunately stuck, for the time being, with Wait And See approaches.

So, over on Forbes.com, Peter Boone and I suggest some more plausible topics for their conversation.  Naturally, I would start with the eurozone…

Originally published at the Baseline Scenario and reproduced here with the author’s permission.