Robert Scheer: Don’t Blame China

[marmar]

from Truthdig:



Don’t Blame China

Posted on Jan 12, 2010
By Robert Scheer


The Chinamen did it. In the great American tradition of finding foreign scapegoats for our problems, the hunt is on to somehow hold China responsible for the misery that Wall Street financiers inflicted upon the world. Even the normally restrained New York Times editorial page argued Tuesday that China’s tying its currency to the dollar was a devious trick that “is exacerbating economic weakness around the globe.”

Tell that to the shoppers at Wal-Mart and Costco who are managing to stay decently clothed while still affording some of the diversionary electronic trinkets that keep them from going crazy-mad at the bankers who cost them their jobs and homes. How absurd to blame China for a crisis brought on by Wall Street hustlers operating within a mile of the Times’ home office. The bankers’ greed was unleashed by a radical deregulation of the financial industry that the newspaper had once encouraged.

Back on April 8, 1998, a Times editorial applauded the “Monster Merger” of Citicorp bank and the Travelers insurance company to form the too-big-to-fail financial conglomerate that a decade later had to be bailed out by U.S. taxpayers. The merger represented a clear violation of the Depression-era Glass-Steagall Act, which Congress at that point had refused to repeal despite decades of lobbying by the banking industry. The Clinton administration issued a temporary waiver to allow the merger, and the Times couldn’t have been more pleased:

“Congress dithers, so John Reed of Citicorp and Sanford Weill of Travelers Group grandly propose to modernize financial markets on their own. They have announced a $70 billion merger—the biggest in history—that would create the largest financial services company in the world, worth more than $140 billion. … In one stroke, Mr. Reed and Mr. Weill will have temporarily demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.” ........(more)

The complete piece is at: http://www.truthdig.com/report/item/dont_blame_china_20100112/

[NewJeffCT]

1. The Chinese currency has not been tied to the dollars for several years now

It was tied to the dollar, but was changed in 2004/2005 or so to being tied to a basket of currencies. In September of 2004, you could get about 8.125 RMB for 1 dollar. I just checked and it is now 6.826 RMB for 1 dollar. So, it's gone down 16% over the period. Considering that it was around 8 1/8 for years, it's not a small change.

[harkadog]

2. If your figures are correct it has gone up in value not down

[NewJeffCT]

3. No

If something had a cost of 1,000RMB before, you would need about $123 to buy it in 2004. However, that same item that costs the same 1,000RMB would now cost you $146.

[harkadog]

4. So the value ofr the RMB has gone up relative to the dollar