Friday, October 23, 2009

Krugman Calls China, Goes All-In on Trade War

Nothing much to say. These tendencies are inevitable when capitalism goes into crisis.


"China has been keeping its currency pegged to the dollar — which means that a country with a huge trade surplus and a rapidly recovering economy, a country whose currency should be rising in value, is in effect engineering a large devaluation instead ....

The biggest victims, by the way, are probably workers in other poor countries. In normal times, I’d be among the first to reject claims that China is stealing other peoples’ jobs, but right now it’s the simple truth...

The point is that with the world economy still in a precarious state, beggar-thy-neighbor policies by major players can’t be tolerated. Something must be done about China’s currency."

So what does Mr. Krugman propose doing ???

1"The Chinese Disconnect" - NYT, Krugman

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