| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : US Economy Last Updated: Oct 11, 2011 - 6:29 AM

Dr. Peter Morici: Pass the China Currency Bill
By Professor Peter Morici
Oct 11, 2011 - 4:01 AM

Email this article
 Printer friendly page
Former Chicago Bears coach Mike Ditka and defensive coordinator Buddy Ryan, right, present a jersey to President Barack Obama during the ceremony for the 1985 Super Bowl Champion Chicago Bears to celebrate the 25th anniversary of their Super Bowl victory, on the South Portico of the White House, Oct. 7, 2011. In 1986, the team’s White House reception was canceled due to the Space Shuttle Challenger tragedy.

Dr. Peter Morici: The China Currency Bill is the most significant jobs bill Congress could pass. It enjoys the bi-partisan support of nearly 80 Republican and Democratic Senators, yet President Obama and Speaker Boehner oppose it, illustrating both are out of touch with the problems besetting the American economy.

The nearly $600bn trade deficit is destroying more American jobs than the mortgage crisis, too much business regulation, and high health care costs combined.

Americans haven’t forgotten how to make things or compete. Unlike what President Obama would have us believe, Americans are not undereducated dolts, unenlightened in the ways of global competition. Rather through a failure to act on issues the President has identified - -  Chinese mercantilism - - and on issues where his ideology prevents action—the development of abundant US energy - - Americans are being denied their fair opportunity to compete.

Simply, the US economy suffers from too little demand for what Americans make. Americans are spending again, but since the first quarter of 2009, the trade deficit is up 55%. In the second quarter, it was nearly $600bn or 4% of GDP - - thanks almost entirely to surging imports of subsidized imports from China, barriers to US exports into the Middle Kingdom and higher oil prices.

Every dollar that goes abroad to purchase Chinese goods or oil that does not return to purchase exports is lost purchasing power that could be creating American jobs. Halving the nearly$600bn annual trade deficit would create at least 5m jobs.

To keep Chinese products artificially inexpensive on US store shelves, Beijing undervalues the yuan by 40% - - simply, it prints yuan and purchases about 450bn dollars annually in currency markets to keep its currency and exports cheap.  In the bargain, it uses some of those dollars to subsidize oil imports and drive up gasoline prices in the United States.

In addition, China provides domestic industries with more than 200 export subsidies and blocks competitive imports of US cars, alternative energy products and just about anything else it chooses to promote. Currency manipulation, subsidies and insidious barriers to the sales of foreign products ranging from cars to solar panels violate the letter and spirit of China’s WTO obligations to promote freer trade and provide open access to foreign goods in its markets.

All President Obama does is complain, Speaker Boehner prefers to do even less, and both, with feet planted firmly in the past, cling each to ideological prescriptions that do little to address these problems.

President Obama remains faithful to Food Co-Op Capitalism - - more government spending, income redistribution, overregulation, industrial policies, and free trade agreements that don’t reduce the trade deficit and destroy jobs. Meanwhile Speaker Boehner adheres to Knickers Era Capitalism -- indiscriminant cuts in taxes, spending and regulation. Both have failed America  - - the former since 2008, when the Democrats took control of the House and bloated the bureaucracy and deficit, and the latter during the first six years of the Bush presidency.

The China Currency Bill would permit US firms and workers harmed by China’s 40% undervalued currency to obtain relief through offsetting duties until China stops intervening in currency markets. That should jog China into finally compromising on the issue. If not, it would move some jobs back to the United States that should not have left in the first place.

American companies like GE and Caterpillar who have outsourced American jobs and corporate functions to China and are now clients of Beijing’s protectionism have convinced President Obama the China Currency Bill is protectionist and would start a trade war.

What China does is protectionist and America is already in a trade war - - China is throwing rocks and President Obama is throwing words.

China is bullying America, President Obama refuses to stand up to the bully, and Speaker Boehner is just fine with that.

Growing up in a tough blue collar neighborhood and the smallest boy at school, I learned whining about bullies doesn’t work. Sometimes you just need to get a big stick and strike back. After a few hard blows, even big bullies can be brought to reason.
The world is a messy place and full of nasty people. Americans must address it as they find it, not as Mr. Obama’s friends in neatly pressed Brooks Brothers suits tell us it should be.

When China Cheats, We Lose Jobs: Sen. Robert Casey, (D-PA), and joint economic committee chairman, discusses Fed chief Ben Bernanke's testimony before Congress, specifically his views on China's "fixed" currency. "I was pleasantly... China's policy on the world recovery":

Peter Morici,

Professor, Robert H. Smith School of Business, University of Maryland,

College Park, MD 20742-1815,

703 549 4338 Phone

703 618 4338 Cell Phone




Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

US Economy
Latest Headlines
US jobs rose by 215,000 in July; Unemployment rate stable at 5.3%
US economy grew at weak pace in Q2 2015 - Worst expansion since 1945
Decoupling of per capita GDP, productivity, private employment, and median family income in America
US economy stumbles again in 2015
Income gap highest in 30 years; No inequality rise in best-paying US firms
Fed minutes raise doubts about fragility of US recovery
Senate Democrats block trade deal authority for Obama
Five firms held 25% of top US non-financial companies cash pile in 2014
US added 223,000 jobs in April; Broad jobless rate at 10.8%
Investment struggles as dividends/ share buybacks at top US firms to exceed $1tn in 2015
US economic growth plunged in Q1 2015
Why the Fed may (almost) never raise interest rates
US jobless rate falls to 5.5%; Broad rate at 11%; Participation rate at 1978 level
US added 257,000 jobs in January; Broad jobless rate at 11.3%
US economy will soon see best years in a decade
US annualised GDP slowed sharply in final quarter 2014
US budget deficit to fall to 2.6% of GDP in 2015
US added 252,000 jobs in December; Jobless rate falls to 5.6%
US adds 321,000 jobs in November; Private sector adds 10.9m jobs in 57 months of growth
US manufacturing slowed in November
US retail spending over Thanksgiving weekend fell 11%
US consumer spending weak in October; Business investment fell again
US third-quarter GDP revised up to 3.9% annualised rate
After destroying banking secrecy US helps Swiss exporters
US oil imports from OPEC cartel at 30-year low
Tax-inverted "Irish" firm Actavis agrees to buy US Botox maker Allergan
US nonfarm payroll employment rose 214,000 in October' Jobless @ 6-year low
Swiss bankers await fallout of US tax evasion acquittal
Two PMI reports give contrasting trends on US manufacturing
US GDP increased at annualised 3.5% in third quarter of 2014
US city home price growth slowed again in August; Consumer confidence rebounded in September
US new orders for manufactured durable goods fell again in September
Loans to buy US shares at record highs
Global markets slide; US industrial production best in 3 years & jobless claims in 14-year low
US federal budget deficit dips to 2.9% of GDP in fiscal year 2014
US added 248,000 jobs in September; Jobless rate falls to 5.9%
US set to become world’s leading liquid petroleum producer again
Obama issues new rules to combat tax inversions
US Securities and Exchange Commission to pay $30m award to foreign whistleblower
Typical American household income in 2013 was below the 1989 level