Tuesday, September 21, 2010

Compare & Contrast

1) WaPo columnist Harold Meyerson's September 15th rant about China's exchange rate policies:
This week, committees on both sides of Capitol Hill will plumb the conundrum of Chinese currency manipulation. The conundrum isn't that -- or why -- China is manipulating its currency: By undervaluing it, China is systematically able to underprice its exports, putting American (and other nations') manufacturing at a significant disadvantage. The conundrum is why the hell the United States isn't doing anything about it.

Treasury Secretary Timothy Geithner will march up to the Capitol to explain the administration's position, which, thanks to increasing pressure for action, may be growing tougher. There are certainly plenty of senators and congressmen -- and Main Street Americans -- who'd like to see the White House place some tariffs on the underpriced Chinese imports. If the administration doesn't act, Congress may just consider mandating some tariffs on its own.
2) Econ prof/blogger Mark Perry's hilarious "redline" edit of Meyerson:
This week, committees on both sides of Capitol Hill will plumb the conundrum of Chinese currency manipulation. The conundrum isn't that -- or why -- China is manipulating its currency: By undervaluing it, China is systematically able to underprice its exports, putting American (and other nations') manufacturing consumers and businesses that purchase China’ cheap imports at a significant disadvantage. The conundrum is why the hell the United States isn't doing thinks it should do anything about it.

There are certainly plenty of senators and congressmen -- and Main Street Americans U.S. producers that compete with China -- who'd like to see the White House place some tariffs taxes on American consumers and businesses who purchase the underpriced low-priced Chinese imports. If the administration doesn't act, Congress may just consider mandating some tariffs punitive taxes against American consumers and business on its own.
3) See also Scott Grannis:
[E]ven if the yuan were chronically "too weak", what's the problem anyway? If the Chinese want to sell us cheap goods, that's to our advantage. True, some manufacturers here might go out of business as a result, but all consumers would benefit. Why should we pursue a policy--forcing the Chinese to appreciate their currency even more than they already have--that would disadvantage every single one of us--because a stronger yuan/weaker dollar would make Chinese imports more expensive--in order to protect a small number of businesses that are forced to compete with Chinese imports?
Agreed. Years ago, when I did some "anti-dumping" work, I used to say, "If the Japanese want to sell us below-cost televisions, I'll take four." Same here--if China's exchange rate impoverishes their workers but results in cheaper products for sale here, I'll take 'um.

2 comments:

OBloodyHell said...

Oh, but we're shipping those American jobs overseas, donchaknow?

Carl said...

And creating more here because we can import cheaper input factors (like steel in automobiles, for example, where overseas sources have lowered prices).