[Vision2020] Dispel the anti-growth myth

[Jeff Harkins]

Andreas,

Interesting question.

I don't.  But I also know that the best long term strategy for 
addressing protectionism schemes is to offer relatively unfettered 
free markets, including parity in foreign exchange currencies.

Many Americans don't know this, but we did effectively the same thing 
with US currency (gold standard) by setting the US currency to a 
fixed gold exchange price of  $32 per ounce.  We learned, the hard 
way, that that type of economic policy doesn't work.

Free floating exchange rates (without fixed parity) is the de facto 
standard for international trade.  Sooner or later the Chinese will 
realize that and their currency policy will change.  Further more, 
the international currency traders will arbitrage any gains or losses 
in the Yuan.  It is tough to move from controlled markets to free 
markets - incentives and wealth shifts have to be carefully 
cultivated.  The Soviets have experience with this as well.  I am 
guessing that China's foreign currency exchange policy is in part an 
attempt to alleviate some of the anomalies that arise when moving 
from a controlled economy to a free economy.

Cheers

At 09:03 AM 10/30/2007, you wrote:
>Jeff --
>
>With regard to protectionism--you *are* aware that China's peg of the
>yuan to the dollar gives them a substantial export advantage? And
>undervalues their currency by roughly  35%?
>
>Why is it that you support foreign protectionism?
>
>-- ACS
>
>On 10/30/07, Jeff Harkins <jeffh at moscow.com> wrote:
> > Oh BJ,
> >
> > You're fishing for a response huh.
> >
> > My record on advocating economic development for Moscow through
> > exports is well established.  But unlike you, so is my record on 
> free markets.
> >
> > The Chinese have every right to compete with us.  Fortunately, the US
> > government (and many of our trading partners) have used "market
> > access" to begin to address Chinese human rights issues, pollution
> > and a host of other problems). From what I am seeing with Chinese
> > students in the classroom, that policy is having significant
> > effect.  And so, they are becoming a part of the world stage.  They
> > are hosting international golf tournaments, world class events (FIFA
> > soccer) and so forth - .  But why would you target only China.  There
> > are a lot of low cost producers out there in the world and many of
> > them are causing the transfer of jobs to their country.  Many US
> > firms have moved their production facilities to Mexico.  Would you
> > ban them as well?
> >
> > WalMart is a US based corporation.  You want to control them - and
> > let's suppose you do.  Who's next?  What US company would you target
> > next?  What country of origin is next on your list?  Where does it
> > end for you?
> >
> > And WalMart and any other store or business has the right to purchase
> > Chinese goods for sale in the US.  You might want to walk around the
> > retail stores in Moscow and look to see how many of them carry goods
> > imported from China as well as other foreign imports.  Why don't you
> > use your powers of persuasion to convince those stores to carry only
> > products that you believe they should carry.
> >
> > Protectionism simply doesn't work.  The correct path is competition -
> > level playing field or not, I bet on the talents of US businesses, US
> > education and US employees.
> >
> > Oh - I have not observed anyone making a claim that the "dark store
> > ordinance" was involved.  The only reference was to a "dark
> > store"  which I think everyone will recognize - it was dark.
> >
> > At 12:20 AM 10/30/2007, you wrote:
> > >It's always amazing to hear the same people who want a Wal-Mart 
> Super Store
> > >also say that Moscow should
> > >
> > >  "...attract businesses that produce goods and/or services for export and
> > >pay good wages."
> > >
> > >Do they not understand that Wal-Mart's practice of importing 
> most goods from
> > >China has resulted in the loss of 4 million+ manufacturing jobs in the US?
> > >
> > >Also, for those who think the Dark Store Ordinance is so bad, the old
> > >Tidyman's is not big enough to be considered a Dark Store.
> > >
> > >B. J. Swanson
> > >
> > >
> > >
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