2003-10-02
Thursday, October 02, 2003
US to China: Make Goods More Expensive!
by Jude Blanchette
[Posted September 18, 2003]
There is, it seems, a segment of the American population that firmly believes China to be the greatest economic threat facing our country. As if domestic taxation, regulation and deficit spending were of negligible effect upon America's economic well being, dealing with the threat from the Far East now ranks as our nation's #1 priority. This animus towards the Chinese has taken form in a number of disagreements between the respective countries' governments in addition to a well-organized campaign to convince the public that China's increasing dominance threatens America's prosperity.
The latest economic battle between the two countries concerns the U.S. federal government's displeasure with China's currency, the Yuan or Renminbi, being pegged to the U.S. dollar. Treasury Secretary John Snow's visit to Beijing earlier this month boosted the hope of many furious at the Chinese for what they see as an artificially cheap Yuan. Snow's subtle admonitions that the Chinese float, or at the least widen the band within which their currency can float, went largely unheeded.
Back in America, companies have been lobbying for just the type of proactive stance on China that the current administration has taken. According to The Journal of Commerce, "(George) Jones (President of Seaman Paper Co.) alleges that China is deliberately and unfairly keeping the exchange rate of its currency, the renminbbi, at 40 percent below its true market value." Mr. Jones apparently possesses some type of economic omniscience lacking in the rest of the general public.
Stalwart protectionist Pat Buchanan recently lamented the "Death of Manufacturing" in America. The cause of death, coincidentally, is trade and China's cheap Yuan. "The U.S.-China relationship cannot truly be described as trade. It is rather the looting of America by China and its corporate collaborators in the United States," writes Buchanan. I'm not sure about Mr. Buchanan, but I'm positive that when I purchase a product made in China, it's trade. It is, perhaps, not the trade Mr. Buchanan would like to see take place, but it is a trade nonetheless.
The cheap Yuan, it is increasingly alleged, is the impetus behind the recent downturn in the American manufacturing sector. President Bush, for his part, seems to agree. He used his recent Labor Day speech to announce the creation of a new position within the Department of Commerce designed specifically to deal with the hemorrhaging of jobs within the manufacturing sector. "We have a responsibility that when somebody hurts, government has got to move," promised the President. That "movement" the President speaks of includes not only direct pressure on China, but also the attempt to convince other countries of the harm the cheap Yuan is wreaking on their economies.
What opponents of economic China have in common, at least in their rhetoric, is the idea of a level playing field in trade being established to make trade both free and fair. It is as if, many argue, a trade between two individuals does not occur so long as a government heavily protects or provides unfair advantages to one of the individuals. The issue of level playing field, however, is at best a cover for further trade restrictions by domestic governments. The common argument goes something like this: "They won't play fair, so we must take steps to protect our interests. Of course we'd like to drop our tariffs, subsidies, etc, but until they do, we must maintain ours." (Emphasis added.) This, of course, leads to a circular argument in which one side presses the other to take that first step.
Most assuredly, the world economy would function more efficiently if all trading partners lifted all trade and commerce restrictions. Capital would flow to its most valued use, while goods and services would cross borders unimpeded. Fortunately, one country can continue to maintain free trade on all imports and exports, all the while successfully trading with a closed, or relatively closed economy.
In the case of the Chinese, while their government's cheap Yuan policy benefits those in the business of exporting goods, it most certainly harms those in the business of bringing in goods and capital from outside China. A cheap Yuan keeps foreign products expensive. This, however, ultimately hurts the Chinese, not the American economy. Those in America attempting to compete with the Chinese in the same markets will find themselves at a disadvantage, but try telling those standing at the checkout line with cheaper, better products made in China that they are worse off for it. In fact the history of the United States, one of the freest economies in the world, has been to trade with less open economies. If we were to trade only with those who matched our level of trade restrictions, all imported goods would come from, say, England and Canada.
Also pervasive in the recent debate over freely floating vs. pegged currencies is the idea that a floating currency is somehow a free-market currency. "We expect our trading partners to treat our people fairly - our producers and workers and farmers and manufacturers - and we don't think we're being treated fairly when a currency is controlled by the government," said President Bush in an interview with CNBC. "We believe the currency ought to be controlled by the market."(Emphasis added) It apparently eludes President Bush and others who support the floating currency on free-market grounds that currency created by government fiat can never be free market, no matter what scheme is devised for its trading on the world market.
In the end, the latest skirmish with China is not about free trade. Nor is it about fair trade. The pressure by the U.S. government for China to float its currency will last only as long as it favors politically influential interests. Back when the pegged currency was deemed to provide the only bastion of stability during the Asian crisis, and hence, a stable economy for which to sell American goods, no one cared a whit about establishing a "free market" for the Chinese Yuan. While no one is ever safe so long as Congress is in session and 1600 Pennsylvania Avenue is occupied, this administration's policy, more so than any other in recent history, has been "buy here, sell elsewhere."
------
Jude Blanchette, a recent graduate of Loyola College, writes from Vermont. He can be reached at jblanchette1@hotmail.com. See other articles by him.
US to China: Make Goods More Expensive!
by Jude Blanchette
[Posted September 18, 2003]
There is, it seems, a segment of the American population that firmly believes China to be the greatest economic threat facing our country. As if domestic taxation, regulation and deficit spending were of negligible effect upon America's economic well being, dealing with the threat from the Far East now ranks as our nation's #1 priority. This animus towards the Chinese has taken form in a number of disagreements between the respective countries' governments in addition to a well-organized campaign to convince the public that China's increasing dominance threatens America's prosperity.
The latest economic battle between the two countries concerns the U.S. federal government's displeasure with China's currency, the Yuan or Renminbi, being pegged to the U.S. dollar. Treasury Secretary John Snow's visit to Beijing earlier this month boosted the hope of many furious at the Chinese for what they see as an artificially cheap Yuan. Snow's subtle admonitions that the Chinese float, or at the least widen the band within which their currency can float, went largely unheeded.
Back in America, companies have been lobbying for just the type of proactive stance on China that the current administration has taken. According to The Journal of Commerce, "(George) Jones (President of Seaman Paper Co.) alleges that China is deliberately and unfairly keeping the exchange rate of its currency, the renminbbi, at 40 percent below its true market value." Mr. Jones apparently possesses some type of economic omniscience lacking in the rest of the general public.
Stalwart protectionist Pat Buchanan recently lamented the "Death of Manufacturing" in America. The cause of death, coincidentally, is trade and China's cheap Yuan. "The U.S.-China relationship cannot truly be described as trade. It is rather the looting of America by China and its corporate collaborators in the United States," writes Buchanan. I'm not sure about Mr. Buchanan, but I'm positive that when I purchase a product made in China, it's trade. It is, perhaps, not the trade Mr. Buchanan would like to see take place, but it is a trade nonetheless.
The cheap Yuan, it is increasingly alleged, is the impetus behind the recent downturn in the American manufacturing sector. President Bush, for his part, seems to agree. He used his recent Labor Day speech to announce the creation of a new position within the Department of Commerce designed specifically to deal with the hemorrhaging of jobs within the manufacturing sector. "We have a responsibility that when somebody hurts, government has got to move," promised the President. That "movement" the President speaks of includes not only direct pressure on China, but also the attempt to convince other countries of the harm the cheap Yuan is wreaking on their economies.
What opponents of economic China have in common, at least in their rhetoric, is the idea of a level playing field in trade being established to make trade both free and fair. It is as if, many argue, a trade between two individuals does not occur so long as a government heavily protects or provides unfair advantages to one of the individuals. The issue of level playing field, however, is at best a cover for further trade restrictions by domestic governments. The common argument goes something like this: "They won't play fair, so we must take steps to protect our interests. Of course we'd like to drop our tariffs, subsidies, etc, but until they do, we must maintain ours." (Emphasis added.) This, of course, leads to a circular argument in which one side presses the other to take that first step.
Most assuredly, the world economy would function more efficiently if all trading partners lifted all trade and commerce restrictions. Capital would flow to its most valued use, while goods and services would cross borders unimpeded. Fortunately, one country can continue to maintain free trade on all imports and exports, all the while successfully trading with a closed, or relatively closed economy.
In the case of the Chinese, while their government's cheap Yuan policy benefits those in the business of exporting goods, it most certainly harms those in the business of bringing in goods and capital from outside China. A cheap Yuan keeps foreign products expensive. This, however, ultimately hurts the Chinese, not the American economy. Those in America attempting to compete with the Chinese in the same markets will find themselves at a disadvantage, but try telling those standing at the checkout line with cheaper, better products made in China that they are worse off for it. In fact the history of the United States, one of the freest economies in the world, has been to trade with less open economies. If we were to trade only with those who matched our level of trade restrictions, all imported goods would come from, say, England and Canada.
Also pervasive in the recent debate over freely floating vs. pegged currencies is the idea that a floating currency is somehow a free-market currency. "We expect our trading partners to treat our people fairly - our producers and workers and farmers and manufacturers - and we don't think we're being treated fairly when a currency is controlled by the government," said President Bush in an interview with CNBC. "We believe the currency ought to be controlled by the market."(Emphasis added) It apparently eludes President Bush and others who support the floating currency on free-market grounds that currency created by government fiat can never be free market, no matter what scheme is devised for its trading on the world market.
In the end, the latest skirmish with China is not about free trade. Nor is it about fair trade. The pressure by the U.S. government for China to float its currency will last only as long as it favors politically influential interests. Back when the pegged currency was deemed to provide the only bastion of stability during the Asian crisis, and hence, a stable economy for which to sell American goods, no one cared a whit about establishing a "free market" for the Chinese Yuan. While no one is ever safe so long as Congress is in session and 1600 Pennsylvania Avenue is occupied, this administration's policy, more so than any other in recent history, has been "buy here, sell elsewhere."
------
Jude Blanchette, a recent graduate of Loyola College, writes from Vermont. He can be reached at jblanchette1@hotmail.com. See other articles by him.
2003-09-29
Bad Moon on the rise
Overcoming his church's bizarre reputation and his own criminal record, the Rev. Sun Myung Moon has cemented ties with the Bush administration -- and gained government funding for his closest disciples.
- - - - - - - - - - - -
By John Gorenfeld
Sept. 24, 2003 | Last December, at his three-day God and World Peace event, the Rev. Sun Myung Moon drew a notable slate of political figures, from Sen. Richard Lugar, R-Ind., to Rep. Danny Davis, D-Ill., and, perhaps most notably, James Towey, director of the White House Office of Faith-Based and Community Initiatives, who offered some respectful opening remarks to Moon's Unification Church faithful. Moon followed, and called for all religions to come together in support of the Bush plan for faith-based initiatives.
Coming from Moon that made perfect sense, because he already believes all religions will come together -- under him. "The separation between religion and politics," he has observed on many occasions, "is what Satan likes most." His gospel: Jesus failed because he never attained worldly power. Moon will succeed, he says, by purifying our sex-corrupted culture, and that includes cleaning up gays ("dung-eating dogs," as he calls them) and American women ("a line of prostitutes"). Jews had better repent, too. (Moon claims that the Holocaust was payback for the crucifixion of Christ: "Through the principle of indemnity, Hitler killed 6 million Jews.") His solution is a world theocracy that will enforce proper sexual habits in order to bring about heaven on earth.
What sort of proper sexual habits? According to Moon, in order to restore blood purity, very specific practices are prescribed. Sex before marriage is out of the question, and when sexual consummation does happen, it must adhere to very specific instructions. First, a photograph of Moon must be nearby, so that everything occurs under the reverend's watchful eye. After two nights of woman-on-top sex, the couple reverse positions, whereupon the man, according to Moon, restores dominion over Eve, via the proper missionary position. Then, according to the instructions attributed to the U.C.'s American Blessed Family Department, "after the act of love, both spouses should wipe their sexual areas with the Holy Handkerchief" --referring to the church-supplied washcloth -- which must "be kept individually labeled and should never be laundered or mixed up."
And, it now appears, under the new priorities of the budding Faith-Based Initiative, the federal government has given Moon disciples its imprimatur -- and funds.
Overcoming his church's bizarre reputation and his own criminal record, the Rev. Sun Myung Moon has cemented ties with the Bush administration -- and gained government funding for his closest disciples.
- - - - - - - - - - - -
By John Gorenfeld
Sept. 24, 2003 | Last December, at his three-day God and World Peace event, the Rev. Sun Myung Moon drew a notable slate of political figures, from Sen. Richard Lugar, R-Ind., to Rep. Danny Davis, D-Ill., and, perhaps most notably, James Towey, director of the White House Office of Faith-Based and Community Initiatives, who offered some respectful opening remarks to Moon's Unification Church faithful. Moon followed, and called for all religions to come together in support of the Bush plan for faith-based initiatives.
Coming from Moon that made perfect sense, because he already believes all religions will come together -- under him. "The separation between religion and politics," he has observed on many occasions, "is what Satan likes most." His gospel: Jesus failed because he never attained worldly power. Moon will succeed, he says, by purifying our sex-corrupted culture, and that includes cleaning up gays ("dung-eating dogs," as he calls them) and American women ("a line of prostitutes"). Jews had better repent, too. (Moon claims that the Holocaust was payback for the crucifixion of Christ: "Through the principle of indemnity, Hitler killed 6 million Jews.") His solution is a world theocracy that will enforce proper sexual habits in order to bring about heaven on earth.
What sort of proper sexual habits? According to Moon, in order to restore blood purity, very specific practices are prescribed. Sex before marriage is out of the question, and when sexual consummation does happen, it must adhere to very specific instructions. First, a photograph of Moon must be nearby, so that everything occurs under the reverend's watchful eye. After two nights of woman-on-top sex, the couple reverse positions, whereupon the man, according to Moon, restores dominion over Eve, via the proper missionary position. Then, according to the instructions attributed to the U.C.'s American Blessed Family Department, "after the act of love, both spouses should wipe their sexual areas with the Holy Handkerchief" --referring to the church-supplied washcloth -- which must "be kept individually labeled and should never be laundered or mixed up."
And, it now appears, under the new priorities of the budding Faith-Based Initiative, the federal government has given Moon disciples its imprimatur -- and funds.
