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Hometown: Xenia, OH
Member since: Tue Sep 19, 2006, 04:46 PM
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Treasury: China not manipulating currency


The Treasury Department has ruled this week that China’s currency is not being manipulated for unfair trade advantage despite Beijing’s devaluation of the renminbi in August.
"Since this move, the depreciated 2.3 percent against the dollar through September," Treasury said in the congressionally mandated semi-annual report released late Monday. "The change in the foreign exchange regime, together with the signs of the slowing growth in China, created market expectations that the RMB would depreciate further against the dollar in the short-run."

China said it made the change in its exchange rate to bring the renminbi, also called the yuan, in line with market forces. But the move caught markets by surprise and renewed calls in Congress for the Obama administration to take a tougher line against currency manipulation, both with China and in the 12-nation Trans-Pacific Partnership.

Treasury noted that the RMB has appreciated nearly 30 percent since June 2010 but emphasized that "further currency appreciation" is key to China shifting its domestic economy to a greater reliance on household consumption and less on exports and investment to fuel growth.


The whole Treasury report is at: http://www.treasury.gov/resource-center/international/exchange-rate-policies/Documents/2015-10-19%20(FXR)_FINAL.PDF

Krugman has said essentially the same thing:

China 2015 Is Not China 2010

If there is a central policy theme to Donald Trump’s candidacy other than immigration — actually, there isn’t, but there are some particular things he bellows about — it’s China-bashing. The unifying principle is probably xenophobia; but anyway, China’s currency moves are about to become a US political issue. And pretty soon, I expect, people will point out that some liberals also used to complain about Chinese currency manipulation.

But that was a while ago — mainly in 2010. And the underlying situation has changed, a lot.

First of all, China has experienced a very large real appreciation since 2011, partly due to higher inflation than in its trading partners, partly because its dollar peg means that it has tagged along with the rising dollar (which was supposed to plunge due to QE, but never mind):

So if The Donald occasionally sounds like me five years ago, bear in mind that stuff has happened over those five years; I’ve noticed, but he probably hasn’t.


I imagine that Trump has 'noticed' the appreciation in China's currency but chooses not to mention it for political reasons.

Orrin Hatch not happy about TPP. May strip out 'fast track' and force renegotiation.

Orrin Hatch holds cards on trade deal
One of Congress' strongest trade boosters is critical of the landmark Asian-Pacific deal — and well-positioned to delay or kill it if he decides to do so.

No one fought harder to give President Barack Obama trade promotion authority to complete a landmark 12-nation deal than Senate Finance Committee Chairman Orrin Hatch. Now, no lawmaker may be more disappointed with the result — or better positioned to torpedo the deal if he chooses to oppose it.

Despite fast-track rules, though, congressional approval of the deal is far from certain. By securing language sought by Democrats — settling for far less than 12 years of monopoly protection for biologics, for instance, and barring tobacco companies from being able to sue countries for financial losses related to antismoking laws — the administration managed to tick off Republicans, among them Hatch, who accounted for the bulk of support for fast track authority.

In the case of TPP, if Hatch decides to oppose it, the White House would probably think twice about submitting it for a vote. But if the administration went forward anyway, Hatch could pursue two options to force it back to the negotiating table by stripping “fast-track” protections from the deal.

Both options are built into the TPA law. One allows both chambers to adopt a "procedural disapproval resolution" within 60 days of each other, asserting the White House did not adequately notify or consult Congress, or that the Asia-Pacific trade deal “fails to make progress in achieving the purposes, policies, priorities, and objectives” of the trade promotion law. The second option would allow either the House or the Senate to strip "fast track" procedures in that chamber only. To begin that process, the Senate Finance Committee or the House Ways and Means Committee would have to send the pact to the floor with a "negative recommendation," urging it be rejected, which would be subject to normal rules.


Several of the TPP countries have said recently they will not renegotiate the recently completed negotiations so Hatch could effectively kill it this way.

A psychological perspective on Trump's appeal to his base.

From a psychological perspective, though, the people backing Trump are perfectly normal. Interviews with psychologists and other experts suggest one explanation for the candidate's success -- and for the collective failure to anticipate it: The political elite hasn't confronted a few fundamental, universal and uncomfortable facts about the human mind.

We like people who talk big.

We like people who tell us that our problems are simple and easy to solve, even when they aren't.

And we don't like people who don't look like us.

The world can feel like a complicated place. There may be no good answers to the problems we confront individually and as a society. It is hard to know whom or what to believe. Things are changing, and the future might be different in unpredictable ways. For many people, this uncertainty is deeply unpleasant. That desire is especially strong among social conservatives, research shows. They want answers, more so than other people.

In particular, humans tend to assume that if one group is getting more, another group must be getting less. We have a hard time understanding that two groups can both be getting more of something at the same time. Call it a cognitive blindspot, or a psychological illusion. Trump has appealed to people who could be especially averse to the presence of immigrants in their communities. The notion that improving the lives of immigrants would also help people living here already is profoundly counterintuitive, experts say, and that could be one reason that so many people find Trump's anti-immigration rhetoric so persuasive.


WTO meeting to extend poorest countries' exemption from drug patents due to expire on 1/1/16.

The World Trade Organization's intellectual property council begins a meeting today where countries could determine how to renew a waiver that allows the trade group's 34 least-developed countries to be exempt from drug patents. The waiver, which has existed since at least 2002, is due to expire at the start of 2016 and the poorer countries want it brought back with an unlimited length of time — or at least until their incomes rise to an acceptable level. The European Union, a key WTO member, supports that position.

But the United States, Australia, Canada, Japan, Switzerland and other countries think the waiver should be limited to a number of years, as it has been in the past.


Surprise. Surprise. The EU takes the liberal position that the poorest countries should be exempt from drug patents indefinitely while the US and others want a limit to the number of years.

Top pharmaceutical industry executives walked out of a meeting at the White House late Thursday


Top pharmaceutical industry executives walked out of a meeting at the White House late Thursday unmoved on their disappointment that the landmark trade pact falls short of their demands for 12 years of monopoly protection for biologic medicines.

Now the compromise threatens to blow up the deal in Congress. “A good compromise usually results in something of greater overall value for all the parties involved,” Senate Finance Committee Chairman Orrin Hatch (R-Utah) said on the Senate floor Wednesday. “And, at least according to the information now available, it is unclear whether this administration achieved that kind of outcome for American innovators.”

Besides expressing frustration with the deal, the drug industry hasn’t yet indicated how it will play its cards. One industry source said pharma wants to see all the details of the deal in writing first, adding its strategy is pretty “formless,” right now.


"... One industry source said pharma wants to see all the details of the deal in writing ..." Wouldn't we all. Something tells me they have seen a lot more of it than most of the rest of us have, at least the parts that pertain to their industry.

"The violence of the Assad regime is the main cause of the refugee crisis."

The removal of Assad (51%) and ISIS (43%) would motivate refugees to return to Syria.

Perhaps most of us are so shocked and morally offended by the actions of ISIS that we forget how long Assad has been terrorizing Syrians. Apparently the refugees have not forgotten.

Thanks for posting this survey, DetlefK. I would never has come across it otherwise.

Krugman: The TPP looks better than it did, which infuriates much of Congress.

I’ve described myself as a lukewarm opponent of the Trans-Pacific Partnership; although I don’t share the intense dislike of many progressives, I’ve seen it as an agreement not really so much about trade as about strengthening intellectual property monopolies and corporate clout in dispute settlement — both arguably bad things, not good, even from an efficiency standpoint. But the WH is telling me that the agreement just reached is significantly different from what we were hearing before, and the angry reaction of industry and Republicans seems to confirm that.

What I know so far: pharma is mad because the extension of property rights in biologics is much shorter than it wanted, tobacco is mad because it has been carved out of the dispute settlement deal, and Rs in general are mad because the labor protection stuff is stronger than expected. All of these are good things from my point of view. I’ll need to do much more homework once the details are clearer.

But it’s interesting that what we’re seeing so far is a harsh backlash from the right against these improvements. I find myself thinking of Grossman and Helpman’s work on the political economy of free trade agreements, in which they conclude, based on a highly stylized but nonetheless interesting model of special interest politics, that

An FTA is most likely to politically viable exactly when it would be socially harmful.

The TPP looks better than it did, which infuriates much of Congress.


AFAIK, this is Krugman's first take on the recently signed TPP. He says still has much 'more homework' to do on it when 'the details are clearer'.

Juan Cole: No, Donald Trump, Mideast wouldn’t be more Stable under Saddam & other Dictators

The mistake Mr. Trump is making is to think ahistorically, that is, to think as though societies do not change dramatically over time. The Neoconservatives thought they could install a king over Iraq in 2003. But Iraqi society had overthrown the kings in 1958, and there is no going back. History may not be dialectical in exactly the Hegelian sense, but any historical situation does produce other, different situations over time. Moreover, societies can change dramatically. History is not static. It is not like a slab of marble. Historical developments produce new and different historical situations over time, and new generations react to the previous ones by striking out in different direction, even at great risk.

How anyone in his right mind could think that Bashar al-Assad (r. 2000- present) brought stability to Syria just baffles me. He provoked the 2011 uprisings and he caused the civil war by deploying his military against the peaceful demonstrators. That’s stability? It is mostly his fault that over 200,000 Syrians are dead and 11 million out of 22 million are homeless. If you are president and your country is in this condition, you don’t get to say you brought stability. Nor is the problem outsiders. In 2011 there was almost no outside interference in Syria. Bashar drove the opposition to pick up arms. The largely rural and illiterate Syria of 1970 when Bashar’s father came to power is long gone. You can’t keep them on the farm once they have seen gay Paree.

Libya under Gaddafi was not stable by 2011, and it was not the United Nations no-fly zone that made it unstable. It was unstable because Gaddafi’s secret police state had lost its authority for a majority of the population, which rose up against it. That is clear instability, and it was provoked by Gaddafi’s erratic and sclerotic dictatorship and by massive repression. I wandered the halls of the courthouse in Benghazi in May of 2011 and the walls were full of pitiful old black and white pictures of young men, including soldiers, whom Gaddafi had made to disappear, asking plaintively if anyone knew their fate (we know their fate).

Does Mr. Trump believe that Europe was more stable when Erich Honecker ruled significant swathes of Germany with an iron fist? Or when Tito headed Yugoslavia? Inflexible dictatorships that cannot adapt to social change and the rise of new generations cause instability, Mr. Trump. They don’t forestall it. Or, they don’t forestall it for more than a generation.


That's fine. FDR did not agree and promoted the ITO with GATT which became the WTO.

National sovereignty was, obviously, not his highest priority. Countries working together to solve global problems was more important to him. Hence the UN, the IMF, the World Bank, the International Trade Organization and myriad others. Now polls show the republican base opposes all of those FDR creations.

He knew that republicans had unilaterally raised tariffs on the rest of the world 3 times from 1921 to 1930 and the middle class had paid the price.

One of his motivations in setting up the ITO/GATT was to make it more difficult for 'republicans' in any country to unilaterally raise tariffs in the name of national sovereignty as his predecessors had. He may not have known that some future Democrats would rue his actions and want to go 'national sovereignty' on the rest of the world like republicans had done in the 1920's.

Bill Clinton was lucky because the dot.com boom revved up our economy.

The old "Democrats are lucky" argument. I wonder why the dot.com bubble made Clinton so 'lucky' in terms of manufacturing employment but the great housing bubble under Bush saw that employment crash through the floor? Krugman has written that the dot.com bubble was not the main reason for the manufacturing surge under Clinton.

And our trade deficit is horrible. The percentage of the economy that is imported is rather irrelevant.

No. Facts like this are relevant.

If low tariffs were leading to high levels of imports creating a trade deficit despite a healthy level of exports, that is a totally different problem than one where a country has a low level of imports but an even lower amount of exports. Raising tariffs when imports are already low does not help much, though it can be emotionally satisfying, as republicans discovered in the 1920's.

Poll shows big 4 issues in primary for both parties. GOP: 1. ending Iran deal, 2. end funding for

Planned Parenthood, 3. send troops to fight ISIS, 4. deport all illegal immigrants.

For Democrats: 1. offer plans like Obama, 2. compromise with republicans, 3. cut size of banks, 4. expand trade agreements.


Lots of other interesting information on candidates and their supporters.
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