Terry is a former colleague from the old Valley Daily News who wrote the definitive text on Boeing a few years back titled Wings of Power, which happened also to be his PhD thesis. We last happened to work together during the 1993 APEC conference in Seattle, when we were both working as Asian economic beat writers. After the doctorate, he got himself a nice teaching gig down in Des Moines (the Seattle suburb) and has been spending the past few months as a visiting prof at Shanghai Jiao Tong University.
As he explains, we've been hearing a lot of tough talk out of Republicans over the years regarding China, who seems to be the scapegoat du jour for the increasing economic mess wrought by those record deficits. And it's been intensifying recently:
- Congress has its knickers in a twist because the home folks are losing manufacturing jobs to cheap imports from China (Wal-Mart gets 80 percent of its goods from China), and is threatening tariffs on Chinese goods if something isn't done.
Meanwhile, the Bush administration dithers because China isn't Iraq so its "straighten up or we'll bomb you" approach to foreign policy is rendered inoperative. That leaves the occasional tragic but loyal soldier, such as Treasury Secretary John Snow, in the unenviable position of trying to simultaneously stall Congress and the legions of yes men who people the current administration.
But even Snow is now saying China must do something "significant" about exchange rates, or else.
However, even if we could get China to raise the value of the yuan relative to the dollar, it wouldn't bail out our economy. The change would be marginal at best, as 70 to 80 percent of our economy is not trade-related and China represents only 10 percent of our trade deficit.
The rest of the piece offers sound advice for the Bush administration for handling the Chinese. Not that they're likely to listen. As he puts it:
- The list of economic steps we might take is long; doing something about the budget deficit and something meaningful for displaced workers would only start the list. And how about making it easier for all the Chinese scientists and engineers who want to come to America to get visas?
But what we have, at the moment, is a Bush in a China shop, and what he breaks, we get to pay for.
And pay for. And pay for.
How exactly did these people get to call themselves conservatives?