Wednesday, May 19, 2010

From the "Is this really happening?" files.

Next week Timothy Geithner shall engage the Chinese in "high level talks" about ... stuff.  In an online WSJ report posted here Senator Chuck Schumer apparently sent a letter to Mr. Geithner requesting him to press the issue of "currency manipulation" by the Chinese.

Forgetting for a moment that the Chinese fund America like a weak-willed parent supports its petulant bastard child, is America logistically able to handle the outcome that is sought?  Simply, no.  Here again we face politicians electing to go the Band-aid route without understanding or planning for the potential ramifications.

A peg is a consistency.  It is a way of life.  To unhinge a consistency without thought for how American multi-nationals would be affected, and for the length of time is, well, stupid.  Huge American companies drive this nation's economy, not small business, despite what the government tells you.  Think of it like this:  if an instability arises, stock prices are lowered until clarity is seen.  Just like the Financial Reform measures soon to come to vote have taken large investment banks behind the woodshed, what would happen if our major importers (virtually every American consumer-driven company model) got dropped?

Rather than look at tough issues at home like, union extortion of parent companies, unfavorable tax structures due to government waste, and mountains of bureaucratic red tape we see a man going the route of Cowboy Diplomacy once more.  Let's hope against hope that this issue is allowed to die on the vine lest our self-righteous nature be questioned by the parent who is yet bigger, and increasingly without scruple when it comes time to smash our faces into the soft compost of financial warfare if for no other reason than to establish without question whose economy runs whose.

This spring's Carbon Emissions summit in Europe highlighted the Chinese sensitivity to diplomacy, as well as continuing frustration at being strong-armed into activities that they may (or may not) care to undertake.  So, can the supposition of the United States' preeminence withstand hard questioning brought about by Chinese doubt?  Confidence (link to prior blog post) is a fickle bitch, indeed.

Are you feeling lucky, punk?