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Oct
2011
23

Dems Blame GOP For Chinese Currency Bill Holdup, But Obama Might Not Pass It Anyway



Last week, Dave Johnson at Our Future highlighted 61 Republicans who had once supported a Chinese currency bill that would limit the country’s yuan manipulation and have now come out against it. Johnson breaks down how this works:

… China manipulates its currency to keep it “weak” (low) compared to the “strong” dollar. This means that goods made in China cost much less – up to 40% less – than goods made here, even before any wage differentials, exploitation of the environment, trade cheating, special subsidies and other trade violations are taken into account. China does this in order to capture the jobs, factories, companies and industries that make a country strong. We have let them do this for many years, leading to the economic situation we find ourselves in today.

Johnson also suggests Right-Wing think tank Club for Growth is partially responsible for the GOP change of heart:

The Club For Growth, a Wall Street front-group that backs China’s positions on these issues, has demanded that Republicans side with China on this, and has called it a “litmus test.” One Republican who actually did sign the discharge petition to force the House to vote, Harold Rogers, was forced by House leadership to remove his name!

But not everyone is in agreement about the impact of Chinese currency manipulation. Michael Hudson, a research professor at the University of Missouri, in an interview with The Real News says the impact of Chinese currency on the U.S. is “zero.”  

Before you get your center-left panties in a bunch, watch the interview to discover where Hudson lays the deficit blame: military spending and Wall Street speculation.

This morning, though, the Columbus Dispatch ran a piece that clearly targets China as a cause for Ohio’s woes. In China’s Currency Manipulation Hurts Ohio,” (which does not appear in the editorial section) author Steve Bennish writes of the state’s $7.8 billion manufacturing payroll decline:

The losses track the impact of offshoring — the moving of jobs overseas — by multinational companies and the economy’s slide into the Great Recession. The data also shed light on the current debate over a $6 trillion cumulative trade deficit that piled up over a decade, and whether the U.S. should put more pressure on China to stop manipulating its currency, which undercuts domestic manufacturing.

The issue has split three top Ohio legislators who have pivotal roles in the debate. Ohio Sens. Rob Portman, a Republican, and Sherrod Brown, a Democrat, think the U.S. should take a harder line toward China by punishing currency manipulation. However, U.S. House Speaker John Boehner, R-West Chester, said the move jeopardizes U.S.-China relations. He’s refusing to allow a House vote on an anti-currency manipulation bill.

Bennish adds an interesting twist to the GOP reluctance on the matter: President Obama is not likely to sign the law anyway, making Republicans even less likely to buck the party line. “Boehner did say he’d reconsider his decision to hold up the bill if President Barack Obama would agree to sign it into law,” Bennish writes.

It remains to be seen what the President will do after the administration delayed their decision on the matter.

Of course, China does not appreciate the finger pointing and has already reprimanded GOP presidential candidates for anti-China comments.

The threat of a “trade war” resulting from sanctions is being bandied about by the anti-currency bill set, but those in favor suggest this is already being waged…by China.

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