Bush diplomacy oveshadowed by Obama agenda

US President George W. Bush got a second bloc of world leaders to endorse comprehensive action to remedy the global financial crisis. But his successor, Barack Obama, is already setting the coming economic agenda.

The formal transfer of power doesn’t take place until January 20, but don’t tell that to financial markets. They are already taking their cues from Mr Obama and his team.

Wall Street surged by nearly 500 points on Friday after reports that Mr Obama would pick Timothy Geithner, the well-respected head of the New York Federal Reserve, to be his Treasury secretary.

Mr Obama was to formally present his economic team today and elaborate on his weekend call for a sweeping economic stimulus to save and create 2.5 million jobs over the next two years.

It is not that Mr Bush did not have his own successes in Lima over the weekend at his eighth and final summit of the 21-nation Asia-Pacific Economic Cooperation (Apec) forum.

The leaders of Pacific Rim countries endorsed the action plan drafted a week ago in Washington by the Group of 20, representing the world’s richest nations and major developing countries such as China, Brazil and India.

The G20 and the Apec leaders are now both on record pledging to cooperate on economic stimulus measures, overhaul financial regulation and avoid the temptation to erect new trade barriers during the current downturn.

The Apec leaders boldly declared an end date for the current troubles, saying: “We are convinced that we can overcome this crisis in a period of 18 months.”

Mr Bush’s economic adviser Daniel Price told reporters after the Apec summit that the president is even more optimistic and believes “the actions we are taking now will begin to produce result in the much nearer term”.

Both summits were seen as confidence-building exercises at a time when the global economy is facing perhaps its worst financial crisis since the 1930s.

The hope is that Apec will have more impact than the G20, which was greeted with a collective yawn by markets that promptly reeled off another string of stomach-churning declines last week.

The slide stopped only after word emerged that Mr Obama had selected his economic team.

The market’s positive reaction to Mr Obama’s choice for Treasury secretary was followed by wide news coverage of Mr Obama’s economic plan – delivered in a Saturday radio address – which overshadowed Mr Bush’s own economic speech the same day to the Apec meeting.

“On economics, the torch has clearly been passed,” said Mark Zandi, chief economist at Moody’s Economy.com. “Everyone is now looking to the Obama team for guidance on how the United States will respond to this global crisis.”