Propounding the conventional wisdom that the US benefits from a "strong", that is importer's, exchange rate, while making the perfectly respectable argument, in mainstream economics, that China is pursuing tacit trade protection through a steeply discounted exchange rate ...
... as Geithner, new lord and master of the Transfer of Assets to Rich People largesse, seems to do ...
... uh, if a "strong dollar" is a good thing, then when China pursues a steeply discounted exchange rate, that makes the dollar "even stronger" ... how is that a bad thing? I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Geithner, who took office this week, said Jan. 22 President Barack Obama believes China is “manipulating its currency,” suggesting the new administration may take a tougher line with the biggest foreign buyer of U.S. government debt.
So how precisely do you "take a tougher line" with the guy who's bankrolling your current account deficit?
Maybe it's just me, but I'd think that it's the other guy who's got the leverage in this situation, at least until you start doing something serious about not having a current account deficit that needs to be bankrolled anymore...
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
And how is belligerent posturing supposed to help again?
I must have missed that memo.
Just like watering down a stimulus package with corporate tax cuts with little or not multiplier impact, actually, and look what a tremendous success that was in generating broad based bipartisan support. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Change we can believe in, indeed.
