Courtesy of Mish.
As amazing as it may seem, alleged conservative Mitt Romney’s position on trade with China is now way to the left of that taken by leading liberal Democrats including Erza Klein who writes for the Washington Post, and Paul Krugman and his New York Times “Conscience of a Liberal” blog
Paul Krugman comments on An Issue Whose Time Has Passed written just prior to the debate on foreign policy between Romney and Obama.
Chinese currency manipulation may come up in tonight’s debate — and as someone who wanted the US to take a tougher line back in 2010, I guess I should weigh in.
Basically, as Ezra Klein says, this is an issue whose time has passed.
In 2010 an undervalued renminbi was a significant drag on advanced economies, including the United States. Since then, however, two big things have happened: relatively high inflation in China, and some appreciation of the renminbi against the dollar. As a result, the real exchange rate of China against the United States (based on consumer prices), has appreciated significantly:
At the same time. China’s surplus has come way down:
Odd Times Indeed
The conclusion of Krugman’s article is most amusing.
Krugman stakes out a claim that Romney’s position is based on politics: “This is an odd time to be making confrontation over China’s currency a centerpiece of your economic policy — unless, of course, it’s just bluster aimed at making voters think you’re tough.“
On that score, Krugman may very well be correct. I can even spell out the politics in four simple characters “OHIO”.
However, it is also possible Romney is not the economic wizard most Republicans think he is. …
