Obama Backs Down on China Currency

http://www.reuters.com/article/idUSTRE69E0OB20101016

Just about the time you think the Obama administration may be growing a backbone in dealing with China ….. well, no.  Once again, they’ve chosen to duck and cover, leaving American workers to take the brunt.  The administration has decided to hold off on issuing a report that would brand China a “currency manipulator,” opening the door to corrective tariffs.  (See the above-linked Reuters article.)  It seems that Obama wants to hold off at least until after the next G20 meeting in November, giving a “multi-lateral” approach another chance.  Earth to Obama:  the U.S. trade deficit with China isn’t a multi-lateral issue.  Aside from the U.S. and China, none of the other 18 in the G20 gives a damn about our trade deficit. 

The issue here isn’t multi-lateralism vs. a go-it-alone approach.  The issue is that this administration hasn’t the courage to take even the simplest of measures in defense of our economy and American workers.  If it doesn’t have the guts to issue a report, what are the chances that they’d have the guts to actually impose tariffs on China and then make them stick? 

President Obama clearly places more importance on diplomacy, on maintaining an air of cooperation at G20 meetings, and on a legacy of being a world-respected statesman than on providing real leadership for the American people.  Maybe this shouldn’t be a surprise, since he vowed to take such an approach during the campaign two years ago.  But he also vowed to tackle the trade deficit and re-write the North American Free Trade Agreement.  Neither has happened, nor will they happen. 

There will be no improvement in America’s trade deficit under this administration.  The president’s plan to cut into the deficit by doubling exports is less of a plan than it is a dodge.  There’s no hope that American manufacturing jobs will be coming home under this administration.  It’s clear that our only hope for “change” will have to wait until the 2012 election.  Obama and his adminstration will have to go.

4 Responses to Obama Backs Down on China Currency

  1. M Deacon says:

    Interesting the concept of population density to consumption. Oh I rant and rave more than most.
    Figure these points are about right…

    World production capacity exceeding consumption. Once you max global production to what the world can ever consume and think it is there or very soon prices collapse and very hard to rise. This happened by industrialising abroad to provide cheap goods for us ramped production up and now the next stage is in progress total industrialisation for all.

    Then take into account countries that used an inflationary economic model to try and avoid the problems a few decades ago and growth the magic word leaves an horrendous devaluation in its wake. Besides that it only has one path in over valuation = down. Go look at the Dow, take off the logrithmic scale over the last 100 years. Its brutal.

    You can’t turn back the clock, but ever increasing efficiences mean less man hours in any economy. That impact is now hitting with all the rest. The government here hid the real cause the increasing unemployment as it grew in a host of different ways.

    Look for the changes about goes something like this.
    In the 60′s a single adult wage could support a family now it takes two and it is a struggle. Children kept on at school or young adults in edcuation all reduce unemployment. Seen quite a few retired go back to work the devaluation thing, ordinary people locked out of this financial growth run out of money to fast and that removes a job for a younger person as well.

    A interesting realisation is that you have rich, middle, poor, currency, trade as a series of layers rich at the top. Beneath this is a layer of production and consumption. You cannot fix any without addressing the production and consumption issue. Ignore it at your peril it destabilises the rest. Currency can interchange with the poor, if you have enough money as China has cited it has factories producing where no profit is made. Great, pay to keep your unemployment down disguising the problem. Developed countries are just as bad, it’s called subsidies and you may as well call it welfare.
    You come to the debate of currency war in effect it is a labour war, currency is how you trade labour.

    So what do you reckon the real unemployment is, when you consider if the world has maxed consumption and trying to raise production yet further with unemployment where it is. I reckon you could say a 1/3 of the world is unemployed and likely to grow worse now as even better efficiences occur. To the point you will have to pay for people to do nothing or make more and force down prices long term through over production.

    Then from this cause everywhere immigration levels rocket, people trying to find work and a better way of life. This in recent years was an effect of this disaster that is stil growing.

    Can’t see a solution myself and no politician on either side really makes any sense on it now only makes matters worse. Figure the only way out now is all nations have to work together, all will have serious unemployment and keeping any out and others will produce ever greater quantities of goods undermining the stability of the rest.

    Great world, totally messed up. Was not the nuke that got us it was mans folly of ever better production so a man could produce more than he could realistically consume in a day!

    • Pete Murphy says:

      Thanks for stopping by, M Deacon. Good analysis.

      You said, “You come to the debate of currency war in effect it is a labour war, …” You are exactly right. World War III is already underway. It’s a war for employment.

      There is a solution. It’s reducing our population. Doing so would bring per capita consumption back in alignment with productive capacity, not to mention that it would solve virtually all other problems as well – resource depletion and environmental degradation.

  2. ClydeB says:

    We’ve passed the point where it matters what other nations think or do. It has reached the point of sink or swim. World cooperation would be nice but please, let’s not wait for nor depend on it. American manufacturers know how to produce high quality goods efficiently. Now we need to put the mechanism in place to make it profitable to do so HERE. Hopefully the next congress will see the light and overhaul the tax code, establish favorable tariffs and encourage domestic manufacturing.

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