Inquiring minds are looking back to the future…as in “One Hundred Years Later“. Some things just never seem to change:
During the Depression of the thirties, one of the constant themes was how cheap manufactures from the Far East were destroying British and other European industries. Cheap Japanese and Chinese textiles were destroying Manchester and causing widespread unemployment. The same thing is happening today: Cheap Chinese products (“dumping”) are causing misery all over the world. Even Krugman, in his convoluted way, has recognized the situation and is taking – hold yourself – a position against free trade.
Last week Japan’s minister of finance declared that he and his colleagues wanted a discussion with China about the latter’s purchases of Japanese bonds, to “examine its intention” — diplomat-speak for “Stop it right now.” The news made me want to bang my head against the wall in frustration.
…China is deliberately keeping its currency artificially weak. The consequences of this policy are also stark and simple: in effect, China is taxing imports while subsidizing exports, feeding a huge trade surplus. … And in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs.
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