> On Nov 17, 2009, at 4:49 PM, Eric Beck wrote:
>
>> Of course, this situation of warring exchange rates would lead to a
>> period of instability and unnecessary hostility between the two
>> countries.
>
> My god. Scratch a "progressive" and find an imperialist?
Why is it imperialist for the US to set a dollar price for Chinese currency, but it's not imperialist when China sets a yuan price for U.S. currency?
Baker (whose imperialism seems to be cleverly camouflaged by his constant calls to cut the defense budget) explains a few paragraphs later that the idea behind this proposal is to induce China to agree to a negotiated currency realignment. His real point in writing this column is to show that the US pose of helplessness is just a pose:
> If the Obama administration was prepared to accept the short-term
> consequences and confront the financial industry, then it could let
> the Chinese government know that it was serious in wanting a lower
> value for the dollar against the yuan. It could even specify a date at
> which it was prepared to start offering to sell dollars at a lower
> price than the official Chinese exchange rate.
>
> This would presumably set in motion a process of negotiation whereby
> China would agree to raise the value of its currency over a period of
> time against the dollar. Eventually, this would bring our trade
> deficit down to a manageable level. However, the key to getting to
> such a point is understanding that the United States is not helpless
> in determining the value of its own currency.
SA