Looks like a full scale trade war is heating up. Reuters reports:
On Monday, 130 members of Congress urged the Obama administration in a letter to label China a currency manipulator and take other steps to persuade China to raise the value of its currency against the dollar.
If currency manipulation is a crime, where go Mr. Bernanke and Mr. Geithner? Or for that matter Mr. Krugman, who remember won his Nobel on the benefits of trade for all, and his position at the New York Times for his full throated advocacy of corporate globalization. That doesn’t stop Mr. Krugman from lashing out at the Chinese in his latest shill. Gee Paul, are you saying it wasn’t such a good idea to dismantle all that American industry and send it to China? Can you really, no matter where your currency is pegged, expect people making $20 a hour to compete against people making 50 cents? Oh, that’s right, Americans need to learn how to compete. Haven’t we been heard that ad nausea from our meeska mouska free marketeers for decades now as jobs and wages were slashed? An interesting point, Mr. Krugman seems to be making a case that current account balances matter and if current account balances matter, you wouldn’t be implying deficits matter would you Paul? Phew, it is all so confusin understandin the thinkin of the upper echelons.
Much better is Andy Xie piece, Our Next Economic Plague: Japanese Disease(tx yves). Xie’s piece explores the now twenty year “stagnation” in the Japanese economy. It’s a good piece on the question of what I’ve been calling older industrial economies. The simple fact is that China, India, Africa and the rest of the “developing” world are going to grow at faster rates than us, Europe and Japan. The Chinese really don’t need to be exporting much of anything. We need some fundamental rethinking on the future of the American economy, Mr. Krugman, for one, has little to offer.
cross-posted from morituri te salutant
Archein