A long-term economic problem that most people should care about
For the forty-plus years, I have been surprised at how little attention Americans pay to foreign currency manipulations that weaken American employment and the standard of living.
Free-trade rhetoric is repeatedly used to mask devious, protectionist-inspired manipulations of currency values. These games avoid the appearance of imposing tariffs, but they have an identical effect.
The Chinese government is cutting our guts out with a knife so sharp, it seems pain free
The Chinese government has undervalued its currency for some time. American multinational corporation plutocrats turn a blind eye because they are fearful that complaining will cause the Chinese government to close its market to them.
American politicians don’t care about the Chinese shenanigans because the economic harm goes most directly to the American worker and its causation is subtle enough that very few people notice what is going on.
In our politicians’ self-centered view, what the American middle and working classes do not notice will not come back to bite either political party. Politics in this country is increasingly less about exercising leadership in the nation’s good, than in securing politicians’ personal power and wealth.
Paul Krugman explained how the Chinese government’s trick works
Paul Krugman yesterday published a short analysis of what is going on. What he said is worth acting on:
China is deliberately keeping its currency artificially weak.
An undervalued currency always promotes trade surpluses . . . .
And in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs.
Clearly, nothing will happen until or unless the United States shows that it’s willing to do what it normally does when another country subsidizes its exports: impose a temporary tariff that offsets the subsidy.
© 2010 Paul Krugman, China, Japan, America, New York Times (12 September 2010)
The only people who are not intimidated and care enough to yell are American trade unions
After decades of union-bashing by both parties, it is a little surprising that the only groups of people in the country who still talk sound economic sense a handful of trade unions.
Professor Krugman continued:
Consider a related issue: the clearly illegal subsidies China provides to its clean-energy industry. These subsidies should have led to a formal complaint from American businesses; in fact, the only organization willing to file a complaint was the steelworkers union.
© 2010 Paul Krugman, China, Japan, America, New York Times (12 September 2010)
They rest of us have been bought by (i) plutocrats, (ii) short-sighted multi-national corporations, and (iii) artificially cheap Chinese goods.
We should ask ourselves whether we value American freedom enough to pay attention
Paying attention helps small jungle animals survive. At the rate we are going, our children and grandchildren are figuratively going to be small jungle animals in a world dominated by people who have proven themselves to be smarter and more committed than we have been.
Tagged: China, China Japan America, Chinese government, multi-national corporations, Paul Krugman, plutocrats, United Steelworkers Union