Democracy is a process that enable leaders to provide balanced responses to citizens' discontent and interests.
Interestingly, a multi-party political system, while preferable is not a prerequisite for an extant democracy. For example the current Republican Party while professing to be "for the people"1 excludes many of our citizens from political participation, usually under the rubric of "States Rights" using a variety of gimmicks, ruses and artifices. If you can exclude citizens then any responsiveness to their discontent and interests becomes irrelevant. Assuming the Democrats' leaders continue providing a balanced response to the discontent and interests of all citizens you've created a de facto single party democracy.
The Republican Party and its followers' use of dogma to obviate their responsiveness to our citizenry's discontent and interests strengthens the case for a de facto single party democracy. According to their dogma "God, Markets, and Prayers" are the responsive constructs to our citizenry.
The Democratic Party must stop pretending that the Republican Party is part of our multi-party system of democracy and call it what it is - a dogma spewing deceptive dictatorship requiring immediate removal and replacement.
1. The Republican Party is highly likely to be "for the people" - just not for the people participating in their own governance.
It is likely that some leaders of the Republican Party are using populism for undemocratic ends, but it would be significant error to generalize those ends to all Americans identifying with the Republican Party. [Those interested in sorting the (un)democratic ends may find this short article (pdf): Populism, Authoritarianism and Constitutionalism helpful?]
How long before these leaders begin spewing the shibboleth "democracy with Republican Party characteristics".
2. Sifting through all the economic hype on China is more difficult than sorting through Russian (dis/mis)information...yes China is developing runways and planes hoping to takeoff, but that takeoff is far from certain...especially into Tiananmen Square-like global headwinds.
Asserting a "right to develop" in the context of a contest between autocracy vs democracy is highly unlikely to significantly change those headwinds.
...kudos to President Biden..no need to wait for hedge-funds to start investing in syndicates before deterring wacky policy for upending women's choices about childbirth...
...the Supreme Court's zealots (aka "conservatives") appear to be pursuing a path of irrelevancy or martyrdom and oblivion depending one's perspective...
...WTF, a slang abbreviation that our citizenry are asking a lot during white nationalist governance of the unstable, unfit, unwell, unbalanced, and unlawful "new" alt-white-house et al. and GOP-RNC cum RAG (Ruse, Artifice, Gimmick) Party Senate...
...wow, wonder what Representative Conaway (R-TX 11th District) will "call for" after the entire Mueller Report is provided to Congress and made public and he's read it...he will read it before talking about it, won't he...?
...kudos to the House of Representatives for intervening in Texas v USA and introducing legislation to ensure Americans have affordable comprehensive healthcare coverage℞...billionaires' budget burdens and religious zealots' myths about female reproduction are of quaternary or quinary concern, if they are of any concern...
...billionaire Bezos (Amazon) builds jobs in New York like billionaire sports team owners and others build stadiums, golf courses, and arenas, with rent-seeking at the public's cost...
...it's going to take more than billionaire sponsored or funded billboards, rent-seeking, monopolies, addictive products, and chants of "disruption", a euphemism for the gimmick of cannibalizing existing assets...
...expectations for and of our billionaires significantly deviate from the requirements of a leading 21st century nation...
...the judges opinion has no immediate impact on Obamacare...it is important for our citizens to continue enrolling in and using Obamacare...the goal of comprehensive healthcare for all our citizens will face obstacles, even if some are a bit brazen...like using the 2017 tax law mostly benefiting our wealthiest citizens to declare healthcare for our poorest citizens unconstitutional...believing if you topple one domino you topple them all...
States rights and libertarian zealots often substitute dogma or inferior, and nefarious state solutions in lieu of superior federated solutions, which cut harm to their residents and our citizens (e.g. secure health, education, shelter, and nutrition). Such is the damage of the zealots' dogma!
A corporation does not have a constitutional right to place into the stream of commerce any sh*t, addictive, or harmful product a snake-oil salesman labels "innovative".
Texas religious zealot Robert Jeffress thanked god for giving us the "gift" of, Trump!
Ah, can we return god's gift or re-gift it to another nation, which is "praying for unity", say Caracas, Venezuela (elev. 2,953')?
Instead of "a day of prayer" let's have "a day of good government" that sends seed money (say $100B) to help the residents of Galveston (elev. 6.89'), Texas City (elev. 9.8'), and Beaumont (elev. 16.0') et al.
Do not attach a "prayer", but a reminder that good government leadership is not a gift from god, but extraordinary citizens with the ability to consult geospatial specialists or elevation maps when regulating the building of Texas structures, especially residential structures!
Our First Amendment should not become a fraud amendment by assigning "free speech" or "religious" labels to mythinformation, misinformation, or disinformation.
"...The reasons for the anti-vaccine movements mistrusting vaccines are diverse, but in the United States and Europe the belief that the risks of vaccines outweigh their benefits is especially prevalent. That vaccines are an artificial intervention into natural processes and that it is less dangerous to let nature run its course.
If you understand the mechanisms of the immune system and how immunity is created, this idea quickly loses all power because vaccines and diseases both do the same thing: They create Memory Cells by triggering an immune reaction. But while pathogens do this by attacking the body and causing a huge amount of stress, which carries the very real risks of various long-term consequences including death, vaccines arrive at the same goal, without all the risks of diseases..." --Immune, by Philipp Dettmer--
There is a difference between corporate complexity and corruption. Yes, software is extraordinarily complex—software defeat devices✈ are corrupt. Boeing has been doing extraordinarily "complex" products, including software for decades, using talented engineers and risk analysis—not rent-seeking behavior or shameless calls by its chief executive officer.
Last week our Supreme Court decided Citizens
United v. Federal Election Commission, a monstrous 5-4 opinion
unconvincingly1 characterizing our corporations as associations of
citizens entitled to First Amendment political speech rights, limited only by
disclaimer and disclosure requirements.
The majority seems to have conflated the regulatory process
applicable to our corporations with the political process applicable to our
citizens.
Evidently, an interest to protect is sufficient for the
majority to guarantee our corporations First Amendment rights in our political
process.
That said one can only hope for such a simplified,
expansive, and unlimited approach for all First Amendment case law—call it the
return to ancient First Amendment principles approach to First Amendment case
law.
Not so says petitioner Western Tradition Partnership—Citizens United forbids the forbidding of corporate contributions to candidates.
Justice Ginsburg has stayed the state court's decision, rhetorically asking her colleagues whether granting certiorari would provide them with an opportunity to revisit Citizens United.
"...Thus, the Citizens United ruling, the lack of adequate law, as well as the lax disclaimer policies for digital platforms altogether created multi-level loopholes for campaigns run by anonymous groups, which potentially includes foreign countries’ disinformation campaigns..."--The Stealth Media--
Maybe the billionaires' threat to our congressional representatives that there will be "no cash until action on healthcare" means that without gutting healthcare for our poor (Medicaid) there is no cash for the billionaires' tax break!
Unsurprisingly, our "new" alt-white-house tells congress to gut healthcare now and replace it later so they can get on with legislation giving the billionaires a tax break. Where is the promise of affordable healthcare for all our citizens without gaps?
What a beautiful bare knuckle brawl between our prostitutes and their whoremasters. A standoff over whether to deliver the f^cking before the cash or the cash before the f^cking?
Maybe our Supreme Court will take the case and abandon its "free speech" cover story for the whoremasters' cash?
How ironic one billionaire's neo-anarchic agenda blown up by another billionaire's neo-anarchic agenda—hey it's free entertainment, watch and enjoy!
Even Koch couldn't imply his support for Hillary Clinton with a straight face. It's like Russia's Putin implying if the United States et al. doesn't ease up on economic sanctions he'll support China's Xi efforts to replace the dollar with the renminbi, so thugs can more freely finance their thuggery!
UPDATED 04/12/2016 AP News, Hundreds Protest Money in Politics at US Capitol
Maybe a hedge fund or super pac will use their free speech to bail out the arrested protesters as soon the judge declares how many words each protester will be required to post as bail?
Mayer's "Dark Money" illuminates a backstory of a bizarre billionaires' bazaar behind America's escalating and increasingly nefarious electioneering. Mayer's best-selling book opens with a variant of the quotation oft-attributed to deceased Associate Justice Louis D. Brandeis:
“We can have a democratic society or we can have the concentration of great
wealth in the hands of a few. We cannot have both.”4
And ends with a near billion dollar projection ($889M), which concentrated wealth is expected to pledge for Presidential Election 2016 electioneering. This, in addition to the $1,000M each major party (Republicans and Democrats) is expected to spend.
Mr. Chief Justice, that's a lot of concentrated and costly speech!
Conflating faux federalism with financial interests is likely to produce undesirable mischief. When attorneys generals are doing the conflation excessive "ingratiation" (commonly called corruption) and incredulity are likely to follow.
Transparent measures and constraints on monies flows to our representatives should not require NSA intercepts or FBI recordings of representatives' quid pro quo exchanges—a premise artfully articulated by the four dissenters
One might phrase Jane Mayer's question a little different—should our President place his confidence in the abilities of the American people or personal casino concierges?
UPDATED
08/26/2010 New Yorker, Covert Operations. Jane Mayer provides a
mini-tutorial on the mischief our billionaires create (literally) behind
networks of coordinated corporate facades and fronts—it can be very difficult
to determine who's funding the "chants of our cults" and for what
purpose. Penetration of the facades and fronts usually depreciates and
tarnishes much of the good our billionaires accomplish—there's a transparent
message here somewhere.
UPDATED 04/04/2010 UPI, U.S. Supreme Court: Wallowin' again in that ol' soft money. The Supreme Court's recent decision in Citizens created a disparity between the now unlimited spending permitted by unions and corporations and the still limited "soft money" spending by political parties. Litigants are expected to ask our Supreme Court to eliminate the current "soft money" limitation in time for the next election—bet you can't wait. Of course Congress could act to neutralize the corrosive perception, if not reality, that our politicians are bought and paid for before, during, and after their "public service"2 to our nation.
Our chief justice does the Supreme Court and our nation a disservice by engaging in polemics with respect to the courts recent decisions. It may be news to a youthful and energetic chief justice but that's what a Supreme Court justice does—sit, study, listen, and decide, hopefully with dispassionate interest and without political polemics2. It’s unlikely Supreme Court justices can successfully and simultaneously engage the role of polemic politician and credible Supreme Court justice without doing harm to themselves and the Court.
-----notes-----
1. Many have viewed the decision as an unreasoned political
polemic, which further dulls our Supreme Court's patina of credibility.
2. The definition of "public service" appears to
be raising money for the next election and not voting inconsistent with
interests necessary to raise that money. Wonder what the relationship is, if
any, between this definition of "public service" and the recent
harmful shocks to our financial, economic, and social systems equilibrium?
Assuming unconstrained "soft money" enables each political party to
offset the "public service" of the other will such offsetting
increase or decrease the frequency and magnitude of the harmful shocks to our
financial, economic, and social systems equilibrium?
"... In all, Reuters examined 30 projects by two-dozen advanced recycling companies across three continents and interviewed more than 40 people with direct knowledge of this industry, including plastics industry officials, recycling executives, scientists, policymakers and analysts.
Most of those endeavors are agreements between small advanced recycling firms and big oil and chemicals companies or consumer brands, including ExxonMobil Corp, Royal Dutch Shell Plc and Procter & Gamble Co (P&G). All are still operating on a modest scale or have closed down, and more than half are years behind schedule on previously announced commercial plans, according to the Reuters review. Three advanced recycling companies that have gone public in the last year have seen their stock prices decline since their market debuts..."--Reuters--
China and United States begin the delicate domestic dance of figuring out how to synergistically propel each country''s economic growth without alienating one another.
On one level this is a "problem" all nations should have—mutual economic interdependence such that neither nation can effectively afford to alienate the other. Each must work with the other or both nations will suffer.
Economists for both China and the United States are excellent, but this is not fundamentally an economist''s problem nor can they do little more than crunch the data, develop and run the models, and provide economic forecasts.
This is about the kind of relationship China and the United States expect to develop and maintain over the next century. Get it right and each country will gloriously benefit—get it wrong and the result will be anything but harmonious.
It's not the time for trite and trivial accusations and counter-accusations about currency manipulation. It''s a time for candid, frank, transparent, honest, and broad ranging discussions about what each country requires from the other to ensure and assure our mutually beneficial friendship extends through the next half century and beyond.
Economists will play a role. Skilled leadership, politicians, and negotiators each capable of assuming nothing, exploring everything, and making tough transformational decisions will play an even greater role.
Treat it as a short term rhetorical game for gain versus a long term candid, honest, frank, and transparent discussion between mutually respectful friends at your nation''s own risk!
It's difficult to think of big power nations working hard together to complete a quality bilateral investment treaty as a relationship on a bad path. A multidimensional relationship that captivates, confounds, and challenges, sure4, but that's not bad!
"...I also want to underscore that market-determined exchange rates are essential to global economic vitality. The signals that flexible exchange rates send are necessary to support a strong and balanced global economy...."--President''s June 2010 G-20 Letter--
Blog:
UPDATED 02/26/2010 CFR, Reality Bites. A short light-hearted assessment of the current China-U.S. relationship that's maybe too close to the truth.
UPDATED 06/02/2009 WSJ, Full Text of Geithner's Speech at Peking University.
Geithner''s former Mandarin teacher has a laugh at his expense. Presenting him with an earlier picture while hinting that more than learning Mandarin was afoot.
China and US stop their delicate dancing and start stepping on each other's toes...China channeling Mao tells the US to change its mindset (i.e. engage in self-criticism) while the US tells China it will cooperate, compete, and confront [China] as appropriate.
It's unclear why China's top leadership thinks it can hang a Big-Character sign around every country's neck like it's a struggling "capitalist roader cadre" that must be coerced into "class-struggle" and "self-criticism"?
...nations, including China will not cut national and international poverty with an oxymoron like "using the sword of the law"...the using the "sword of the law" can reverse forty years of reform and opening in four days...
...most China hands and others would not accuse our unstable, unfit, unwell, unbalanced, and unlawful "new" alt-white-house et al. (aka "extraordinarily stable genius") of "over-thinking" before launching his "kidnap the princess" China strategy...
"...However, at the same time that we fortify ourselves against harmful outside interference[♔], we must also be mindful to do no harm. In particular, we must guard against having this report used unfairly to cast aspersions on Chinese, whether Chinese American immigrants who have become (or are becoming) United States citizens, Chinese students, Chinese business people, or other kinds of Chinese visitors, whose contributions to America’s progress over the past century have been enormous...
...Just because the Chinese Communist Party presumes that all ethnic Chinese (wherever they may reside) still owe some measure of loyalty “to the Chinese motherland,” zuguo (祖国), does not mean that they are collectively in possession of compromised loyalty to their adopted home or place of study. ..."--Orville Schell and Larry Diamond, Report's Afterword--
[♔].....it is unclear how an interfering China will benefit from threatening any nation, much less Canada or the United States with severe consequences when they're simply adhering with the rule of law...it's reminiscent of the strategy used by our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al., Putin, House of Saud, etc...
...our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al. could learn a lot from Canada's Foreign Affairs Minister Chrystia Freeland...but, it can't because it knows more than everybody...
...our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al. may opportunistically denigrate globalism for domestic gain, but somebody must sponsor carrier strike groups and economic infrastructure...only in the Potemkin presidency of our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al. can disordered (some might say delusional) nationalistic drivel dominate...
...it is beyond hilariously ironic that some have labeled China's global sponsorship, debt traps...how about offering developing countries more generous deals instead of nationalistic rhetoric, propaganda, and Thucydides Trap theses (Allison's latest Ted talk promoting his thesis)...ensuring China avoids a so called "Middle Income Trap" (IMF, Growth Slowdowns and the Middle-Income Trap) is more beneficial, globally...whose (war) dance is this, anyway?..
Continuing improvements and transition of China's economy (e.g. inefficiencies, freer currency, anti-corruption, environment pollution, indicators, import model etc.) requires tough decisions, hard work, and help from the United States et al., not miracles.
The President of the Peoples Republic of China and leader of the Communist Party of China defending the liberal world trade regimen against the astonishing illiberal assertions of the prospective president of the United States! (e.g. praising Britain's EU exit and its weakening currency; threatening punitive tariffs; threatening to scrap multilateral trade agreements etc.) You cannot make this stuff up!!
"Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war." --President Peoples Republic of China, Xi, Jinping, Davos 2017--
One suspects President Xi et al. will quickly learn how to correctly filter an increasingly noisy U.S.-China relationship, which will produce a surprisingly familiar signal.
It's difficult to delicately dance with a dance partner behaving like a bull[y] in a bullfighting arena charging at red capes! A skillful matador(s) will be required to [re]tire the bull[y] without getting gored or harming the bull[y].
Thank you President Obama for your global leadership during the past eight years. Watching your titular successor, to date, dance with one leg and arm is a tragicomedy, which trivialize confidence in nations' cooperative relationships.
Premier Li's recent westward journey points our "[not so] new" President towards many fruitful opportunities to advance our cooperative bilateral relationship with China.
"The G20 also welcomed the inclusion of the Renminbi into the SDR (Special Drawing Right) currency basket as of October 1st--an important milestone that will help strengthen the international monetary system as well as China's role in the global economy." --IMF, Managing Director Christine Lagarde--
Overcharged geopolitical environments are antithetical to global stability and predictability, regardless of what's in the IMFSDR currency basket.
Finally, our global economic and financial regulators are beginning to view "exceptional" (some might say ridiculous or bu*&sh!t) reporting of corporate financial and economic activity as a reason for close and transparent investigation instead of awe or envy!
Delicate dancing requires partners to follow the same step, lest one or both get hurt.
China's tangential bullying in the South and East China Sea has been a self-defeating and self-extinguishing exercise, which should not distract or impede either nation from military and non-military cooperation.
Suppose that stability (or harmony) requires governance by consensus, an informed citizenry and a transparent government.
Opaque governments implicitly suppose stability (or harmony) requires censorship and secrecy, often blaming transparency and others for any eventual instability that invariably ensues.
Government leaders (or surrogates) secretly and opaquely sending large sums of money out of their country seems like indicia of instability (not unlike an insider trader). Subsequent censorship of information disclosing such secret transfers coupled with military aggression, exaggerated nationalism and repression of dissidents seems like a baleful omen of an accelerating instability.
Ironically, increasing the instability, which censorship and secrecy seeks to avoid!
Unsupported hyperbolic statements by well-meaning Chinese and American generals are distinctly unhelpful and unlikely to motivate an improved bilateral relationship.
Of more concern than a China that rises is a China that fails to rise—only slightly less concerning is that some seemly prefer confrontation over cooperation and coercion over competitive or comparative advantage.
A paper aiming to reduce the probability that China and the United States jointly produce a tragi-comedy, which plays on our global stage to critical condemnation.
Both nations have a responsibility to jointly produce a modern opera, which plays on the global stage to critical acclaim (hint: it will likely have both Chinese and American characteristics).
It's unclear whether the state owned-controlled-sponsored enterprise(s) can or will predominated global competition?
Most of the hearing witnesses seem to generally focus on a variant of the theme that China is coupling currency controls and state owned-controlled-sponsored enterprises to subsidize domestic and foreign markets.
But how is China's global subsidy of the consumer harmful? Perhaps this is what hearing witness Paul T. Saulski was getting at by stating:
"I will end by pointing out that, although these policies do benefit state-owned enterprises and industries vis-à-vis their foreign competitors, these policies do not come without significant cost to the Chinese economy."
Of course a nation's choice of models (economic, financial, legal and production) is independent of the requirement that all these models and all actors must operate in a globally transparent and accountable environment.
Discovering your collateral debt obligation3 is worthless must not await a sovereign default; discovering medical grade silicon substitutes must not await implant rupture; discovering a metal was not heat treated must not await a crash; discovering an active ingredient substitution must not await the harm or death of a patient; etc.
The good news is that on this anniversary of the Nixon-Kissinger trip to China we're still discussing how best to further open our nations.
Today's open economics means your dance is significantly influenced, if not determined by the dance(s) of others—the chaos of stopping the music and then competing for chairs is no longer desirable, if it ever was.
Our future economic models must ensure the music does not stop or when it does that there is a seat for every ass.
"...Many of the Chinese exports to the United States are no longer produced in the U.S., and I don''t believe that the United States will restart the production of those products -- products which are at the low end of the value-added chain....."--Reuters quoting China Premier Wen Jiabao--
Our current leadership is now struggling to create the high-value-added replacement jobs—unfortunately the low-value-added jobs were lost faster than the high-value-added jobs were created.
Blaming China will not create the replacement high-value-added jobs.
Blaming China should not substitute for focusing on America, including support for our citizens and residents negatively impacted by our transition toward increased global cooperative competition.
All nations must avoid the politically expedient tendency to characterized other peer nations as engaging in inimical behavior; instead they must cooperate to ensure stable competition in our increasingly global economic and financial systems.
"...We welcome China''s decision to increase the flexibility of its exchange rate,...Vigorous implementation would make a positive contribution to strong and balanced global growth. We look forward to continuing our work with China in the G20 and bilaterally to strengthen the recovery,..."--Xinhua quoting U.S. Treasury Secretary Geithner--.
China representatives are scheduled to discuss currency manipulation and balance of trade issues with senators ahead of a vote on whether the Yuan is being artificially undervalued against the dollar.
Many think the current Yuan:Dollar ratio of 6.83:1 is 25-40 percent undervalued.
It seems preferable for China to develop the non-authoritarian institutions required for a stable civil society as opposed to pursuing unsustainable growth policy that distort or destabilize the global economy in pursuit of the same.
Mostly fits right now.
Unfortunately China leaders like our leaders will tend toward stoking the nationalism rhetoric. The rhetoric can be dangerous because it substitutes emotional appeasement for doing the heavy lifting required for long-term sustainable solutions.
Many times leaders of a nation cynically use nationalism believing they can control the passions. But such passions are difficult to control once stoked.
Citizens in both China and America must condemn any effort by our leaders to substitute nationalism for the hard work of ensuring sustainable global growth.
Protectionism or terminating dialogue or inflammatory rhetoric regardless of the differences or disagreements are nationalistic and impede sustainable global growth.
More imbalances left behind by the previous administration. A policy of
creating growth using the mantra "markets clear everything" has created
titanic imbalances and disasters.
Balanced growth is preferred growth because it''s sustainable growth.
Caution: How will our current administration determine and communicate that it is: ensuring a level playing field for fair trade; and not protecting inefficient domestic industries lacking innovation?
Our president has signaled he will oppose protectionism while ensuring a level playing field for competition, but data and information must accompany the words.
Understandably China is left to assert subjective statements like "At the moment...the level of the yuan [sic] is close to reasonable and balanced."
The reply is simple and direct...well then let''s float your currency and more objectively test your statement. Many think the Yuan is still 30-40 percent undervalued making our goods relatively more expensive for the Chinese consumer, among other things.
UPDATED 01/15/2010 NYT, Murray: US Senators Urge China Action on Currency.
A nation shifting from an export to import model must lawfully or unlawfully build its intellectual property assets—unfortunately most nations, and China is no exception, engage both lawful and unlawful channels (the recent Google-China incident is about this in spades) for increasing their intellectual property assets.
Authoritarian regimes will tend toward unlawful channels simply because their governing model is in conflict with the freedoms necessary for lawful generation of cutting-edge intellectual property assets.
However our leader are shortsighted not to recognize the untenability (from China''s perspective) of asserting that China floats its currency and abandon its efforts to lawfully increase its intellectual property assets.
Our leaders are also shortsighted to place all their focus on the necessity of prying open China''s markets to the exclusion of developing, protecting, and securing our next generation intellectual property assets.
We simply do not want to be in the position of competing with an authoritarian China using an export model to exploit an infinite supply of low-cost labor!
Hopefully, our forthcoming Google incident demarche will implicitly (if not explicitly) make clear to China and other American companies we have no such intention of doing so.
UPDATED 07/27/2009 Reuters, Obama calls for deeper U.S.-Chinese ties.
Vice Premier Wang, Secretary of State Clinton, and Treasury Secretary Geithner at U.S.-China Strategic and Economic Dialogue in Washington July 27, 2009.
"...The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world,..."--President Obama--
This is a huge issue and one not easily solved by China''s leaders.
China''s leaders would like to achieve market status because it eliminates "price imputation" on a host of trade related issues.
In a "planned economy" (as opposed to market economy) prices are not objectively and reliably determined (central planning sets prices)—so in some trade related circumstances market economies will calculate an approximate market price and impute it to China''s goods.
...Of course if you are trying to build confidence in your currency it is helpful to subject that currency to market forces ("float").
If over time the currency maintains its value investors gain confidence. If on the other hand you peg your currency at a predetermined value and intervene in the currency markets to maintain that value investors have no simple way of objectively determining if the currency value reflects its true value or a "manipulated value".
But if China "floats" its currency its true market value may cause unintended or undesirable (from the perspective of China''s leadership) consequences. For example it may cause an outflow of currency from China''s banks; it may cause export prices to rise making them less competitive internationally; it may increase the cost of vital infrastructure projects; etc.
It''s no easy task to float your currency while simultaneously avoiding all undesirable consequences—just ask our secretary of Treasury, Timothy Geithner!
In case you think its simple or black-white consider whether it's better to have hedge fund managers and currency speculators manipulating your currency or your nation's central bankers?
UPDATED 05/22/2009 UPI, Pelosi, U.S. delegation to visit China [May 24-31, 2009].
Whether you agree or disagree with China''s leaders many most acknowledge and credit their Herculean efforts to transform China; reduce its crippling poverty; and place it on a path of global participation (sometimes it''s easy to forget China is a developing nation).
Our leaders will do well to assume China''s leaders have objectively studied and thoroughly understand most of the critical problems confronting China—demonstrating that same understanding and communicating how America can play a constructive and accommodating role in solving those problems will be most welcomed.
...And who knows what together we can accomplish?
UPDATED 05/17/2009 NYT, The China Puzzle. It is not often we read an article, even in the NYT, that aims at educating the reader—David Leonhard has accomplished this in a infinitesimal incremental way—kudos!
It''s not that our trade imbalance with China is per se the problem—it''s what our policymakers for the previous eight years did with China''s loaned foreign exchange surplus that is an enormous problem—they consumed it instead of investing and now have nothing to show for it, except rusting military hardware, scrap metal, and a cheap DVD player with a MTBF of 200 to 400 hours!
Competing with China in the low to medium skilled labor market is not something America wants to accomplish—whether and why we need to are different and most unfortunate questions our policymakers are currently asking and debating among themselves and others?
Ironically, China, a communist country with socialist and egalitarian aspirations currently has one of the world''s most unequal income distributions.
China has annual average urban income of ¥3,411 and rural income of ¥1,2442 (note the imbalance between rural and urban).
"We must set ourselves on a path so that one country, or group of countries, does not consume in excess while another set of countries produces in excess,"--Reuters, quoting Geithner--
"But Mr. Wen stressed the importance of confidence among world leaders, calling it "more valuable than gold" and said that hope was also important, like a "beacon.""--VOA quoting China''s Premier at Boao Forum--
"I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets,"--China''s Premier Wen Jiabao--
We''re a little concerned too—but, our Secretary of State likely has it about right—thanks for your directness—if there''s anything Paul Volcker has demonstrated a dislike for it''s inflation.
"He [Wen] said it has been proved by 30 years of Sino-U.S. relations that both will benefit from cooperation and both will be hurt by bitter fights."--Xinhua, reporting chat--
Hopefully, soon both Chinese and American leaders will be conducting unrestricted, uncensored routine reciprocal cross-culture online chats with the netizens of the others nation.
[America enabled] "...an excessive expansion of financial institutions in blind pursuit of profit, lack of self discipline among financial institutions and ratings agencies..."--China''s Politburo, Wen Jiabao--
Point taken—perhaps the illusion of profits is a better descriptor—the net profits and wealth remain to be studied and determined.
Only the speculators (cowboys) benefit from engaging in the harmful practices aimed at creating and profiting from artificial differential swings in the market, most recently from 12,000 to 8,000.
The rest of us benefit from sustainable stable linear growth, but then most of us aren''t walking the halls of Congress purchasing the enabling "cowboy policies" from members of Congress (it''s called corruption in China and everywhere else, we call it campaign contributions).
In fact if or when we all begin acting like the "cowboys" our system will no longer function and will collapse—in just eight years the "cowboys" have produced a warning disaster!
Hopefully, together we''ll study and learn from this warning and avoid triggering another.
1. China''s Yuan is pegged against a weighted composite of international currencies, but China''s domestic currency is the Renminbi (see Wikipedia, Currency Signs for other country''s currency symbols).
2. Loren Brandt and Thomas Rawski, China''s Great Economic Transformation, 2008 page 729 et seq. (Dwayne Benjamin, Loren Brandt et al. Income Inequality during China''s Economic Transition)—published in Loren Brandt and Thomas Rawski, China''s Economic Transformation, 2008
Figures are for 2001 data.
China''s 2008 HDI PPP GDP per capita based on 2006 U.S. dollars is $4,682.
3. UPDATED 03/17/2021 The SEC has recently release a report containing a series of notional histograms for the Security Based Swap known as a Credit Default Swap (CDS), which frequently insure a Collateral Debt Obligation (CDO).
There is an intense debate over what threshold should trigger swap dealer regulation—high threshold to exempt many dealers or a low threshold to exempt few dealers.
