Beijing finally made a move on exchange rates, probably. Assuming there is some action to go with the People’s Bank of China’s stilted language, two critical errors are being made in the international response. The first concerns the nature of the change. The one-line summary, in China and elsewhere, is …
Tick, tick, tick — the sound of a Congressional trade bomb. By its own, not very exacting standards, Congress has patiently waited for change in Chinese currency policy. The single most likely time for that was the G-20 finance minister’s over the weekend in South Korea. But nothing meaningful from …
The European economic model is dead. Don’t believe us? – Ask The Washington Post. Yesterday’s front-page story reported that the loans being made to stave off the debt crisis come with conditions which, if enforced, would require “European governments [to] rewrite a post-World War II social contract that has been …
Uh oh. Just when it seemed Sino-American shouting over the undervalued yuan was quieting down, surprise guests are threatening to incite a riot. The problems in Greece, Portugal, and perhaps elsewhere in southern Europe are a threat to the euro. A damaged euro may mean the widely-anticipated change in Chinese …
The Obama Administration, the Democratic Congress, and their friends in organized labor are quick to blame unemployment on the trade deficit. Facts don’t support that assessment. The historical record shows a *positive* correlation between aggregate trade deficits and job creation – a trade deficit signifies *more* jobs. That’s because trade …
Today’s papers give the impression of a collective exhale on U.S.-China relations. Chinese President Hu Jintao is coming to Washington for a global nuclear security summit and that means a trade war over exchange rates has been averted. However, a better term than “averted” is “postponed.” It is probably true …
The New York Times, Washington Post, and others today ran front-page stories on economic and political disagreements the U.S. has with China. The headlines mostly distract from the real issue. China is nowhere close to a global military power but it is becoming a global economic power. It is therefore …
The headlines should read: World Didn’t End! Sub-head: We didn’t know what we were talking about. The data for official Chinese purchases of Treasury bonds in 2009 were published yesterday. Verdict: the PRC bought practically nothing. In 2008, official Chinese purchases of US Treasury bonds were equal in size to …
