Citing the “tragic failure of financial regulation,” Treasury Secretary Tim Geithner told PBS’ Charlie Rose that henceforth, “capitalism will be different.” No question about that – it already is.

Taxpayer bailouts of individual companies and entire industries have transformed congressional hearings into shareholder meetings. In the Obama economy, auto manufacturers submit their business plans to Washington for approval. Corporate advertisements must bear the words, “Congress approves of this message.” Business travel and conventions are now taboo, while limits on executive pay are all the rage.

With the mortgage and credit markets at the root of the economic crisis, Obama’s next move may be to nationalize U.S. banks. So, if you are enjoying the President’s massive expansion of the federal government; his staggering accumulation of red ink; and the fed’s interference in private industry – just wait – Obamanomics is about to go global. His path to nationalizing banks is only a step toward the ultimate goal of internationalizing U.S. banks.

Will President Obama allow other world leaders to shape the regulatory structure under which U.S. banks operate? Will he approve the creation of a global authority to supervise financial markets and enforce regulations against American companies? These questions could be answered at the upcoming G-20 summit in London. The Europeans are pushing the United States in this direction and evidence is gathering that the Obama administration is acceding to the demands of Old Europe.

The G-20 summit will be hosted by British Prime Minister Gordon Brown on April 2nd. When the heads of state get together, it will be less than four months since they met in Washington and issued an “Action Plan” emphasizing global regulation of the financial industry. Then, leaders agreed that “intensified international cooperation among regulators and strengthening of international standards,” is needed to reverse the downward trend of the world economy.

G-20 leaders are also expected to adopt a single “global standard” for accounting rules. Multinational banks and Fortune 500 companies will be required to follow international standards, and family-owned businesses in the United States may soon have to hire Brussels-based bookkeepers. This week G-20 finance ministers agreed to “take whatever action is necessary” to boost the economy – the same words Mr. Obama used to justify his multi-trillion dollar spending spree. In that spirit, the finance ministers pledged a massive funding increase for the International Monetary Fund – up to $500 billion – a ten-fold increase.

Two weeks ago, Prime Minister Gordon Brown previewed his pet project – a Global New Deal – to a joint session of Congress. Brown pledged to “rebuild prosperity and security in a wholly different economic world, where competition is no longer local, but global, and banks are no longer national but international.” Brown urged the Congress to adopt universal “rules and standards for accountability, transparency, and reward that will mean an end to the excesses and will apply to every bank, everywhere, all the time.”

Other G-20 participants such as Germany’s Angela Merkel, French President Nick Sarkozy, and Brazil’s Lula da Silva favor increasing global regulation and creating new international watchdogs. The media is highlighting the Europeans’ emphasis on regulation as a fault line with the Obama administration which wants EU nations to break out their credit cards and spend their way to prosperity. Either way, both sides are advocating more government intervention.

It’s true that President Obama wants more global spending, but he is more willing to feed steroids to the international bureaucracy than the media is letting on.

Larry Summers, Mr. Obama’s National Economic Council director, said the President is “eager” to start augmenting international financial regulations and promised that the United States would lead a “leveling-up of regulatory standards.” Former Federal Reserve Chairman and Obama advisor Paul Volcker has already signed off on plans to overhaul the international financial system. Secretary Geithner said the April 2nd G-20 summit will be the birthplace of global regulation, which will be more effective once national watchdogs are rebuilt.

That’s what makes Fed Chairman Ben Bernanke’s comments last week so interesting. Bernanke said the U.S. must create a national institution which “regulates the financial system as a whole, in a holistic way, not just its individual components.” This will come in one of two forms – a new federal bureaucracy, or a Federal Reserve with vastly expanded powers. Either way, it means the Obama administration is complying with the G-20’s mandate to create a “regulatory system [that] is compatible with a modern and increasingly globalized financial system.” It’s time to say good-bye to your friendly neighborhood banker.

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