Wednesday, December 20, 2006

When the facts don’t fit, make them:

The Financial Times is reporting that leaders in the Unites States Senate are looking to introduce a change to the law that allows the U.S. to take economic action against foreign countries. The proposed change comes after a report to Congress on China’s currency controls didn’t contain enough evidence to allow the U.S. to take action against China and it’s growing trade surplus.

According to the article the incoming chairman of the finance committee, Senator Max Baucus, claimed that the report was “no longer a relevant tool to deal with currency issues”. How convenient.

During the Clinton administration, Clinton’s team did everything they could to keep the dollar strong, understanding that a strong dollar leads to cheap imported goods and higher consumption. What has changed? Are Democrats saying President Clinton’s strong dollar policy was wrong?

Looking at the situation just what are leaders in Washington looking to achieve by a revaluation of the Chinese currency? Is their goal for America to go backwards and start making t-shirts and plastic army men? Democrats and Republicans should be focusing on more important issues with China like digital piracy and making their banking system more open to U.S. investment.

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