Wednesday, April 06, 2016

What About US Jobs? Check Your Currency!

Romano makes a case for paying attention to the US dollar's value.

...Taken alone, there’s only so much tinkering around the edges of tariff reductions via massive trade deals like the 12-nation Trans-Pacific Partnership trade pact can accomplish, when the real tariff on U.S. goods and services is foreign currency devaluation, which naturally is not addressed by the trade agreement.

Consider, starting in about 2001, the U.S. dollar was being devalued but the whole time, China’s yuan was pegged below the dollar. The more we devalued, the cheaper Chinese exports got, and the larger our trade deficit became. By 2008, the dollar had dropped almost 37 percent against major currencies, all to the benefit of exporters that wisely had pegged below the dollar. Our own attempt at currency manipulation had backfired....

That, argues Romano, caused manufacturing to leave the US.  I have argued elsewhere that there are other contributing factors, but they simply amplify the effect of Red China's mercantilism.  (That USD devaluation also raised the price of petroleum, by the way.  There are a few other good reasons that oil has become cheaper lately--but the increase in value of the USD since 2011 is certainly a part.)

Romano has little use for TPP and tariff-tweaking:

...That is why the tariff reductions contemplated under the Trans-Pacific Partnership for example are very much laughable. Whatever reductions are agreed upon may just be offset by exporting nations devaluing their currencies below the dollar once the agreement is in place. What a joke....

It's about time that someone takes this seriously, no?


Anonymous said...

It's about time that someone takes this seriously, no?

We are. That is why we are voting for Trump.

What country music can tell us about Trump’s rural appeal

...................Rural Americans have never liked the convoluted trade deals their politicians vote for; when they were polled about it in the recent ALG-Caddell poll, 72 percent, including 76 percent of Republicans agreed with the statement “The same political elite who have been rigging the political process in Washington are the same ones that have been rigging trade deals that hurt Americans, but benefit themselves.”

Instead, they are opting for the candidate that never held elected office, because they’ve had it with the insiders who rig trade deals against them. That sentiment isn’t just held in the south, but all over the nation.............

Dad29 said...

The Donald thinks that healthcare is a priority for the Fed Gov. Not to mention housing and education.

Clearly, Trumpkins are searching for a new Mussolini, and they found him.