Economist Dean Baker is the best source for information about the Trans-Pacific Partnership, it’s problems, and how the power elite of this country are trying to cram it down our throats before anyone can really check it out. For example, a couple of weeks ago, over at FAIR, he wrote, Three Fake Myths — and Two Actual Ones — About TPP Trade Pact. But today, he wrote about something that is always much on people’s minds when we aren’t discussing trade deals, but somehow just can’t be dealt with when we are: currency manipulation. Baker framed it regarding how his favorite newspaper is covering it, Washington Post Tells Readers the Elite Will Lie, Cheat, and Steal to Pass Their Trade Deals.
A couple of years ago, I wrote an article, National Income Accounting. In it, I show that there is a basic contradiction among most people who simultaneously want a balanced federal budget and a strong dollar. This is a simple matter of arithmetic. So when it comes to trade deals, the number one most important issue for us should be getting the value of our dollar down compared to other currancies — especially the Chinese renminbi. The Chinese government keeps the renminbi artificially depressed, which means that it can export more to the United States than it could in a fair system. So Americans get cheap Chinese goods, but they don’t have jobs.
The TPP does not include China, of course. But the idea has always been that eventually China would sign on to the deal. Baker asked rhetorically, “If currency rules are not included now, is The Post’s argument that it will be easier to get them included after China has joined?” But of course, we know why currency rules are not included. It is the same reason that so much effort on this supposed free trade agreement is spent on making intellectual property laws stronger. None of this deal is about helping the American (or any other country’s) worker. It is about allowing people who already have a lot of money to make even more. If you want to know more, read my article, No Trade Deals Until Our Economy Is Fixed.
Defenders of the TPP claim that the agreement can’t do anything about currency manipulation because it is hard. The Washington Pose opined, “The problem is that it’s very difficult to establish precisely, much less in a legally binding multinational agreement, ‘correct’ valuations of major currencies or the precise intent behind any particular policy that affects currency values.” Before we get to the substance of that, consider how typical this is. I hear this same argument in the education “reform” movement. It is always the case that doing something that is actually productive would be “hard” or “politically impossible.” So instead, we do things that are easy, which just so happen to help the people least in need of help — usually making things worse for everyone else.
But regarding the substance of the claim that it is “difficult” to establish correct valuations, this is just absurd. Of course, The Post used weasel words — most especially “precise.” But we don’t have to know precisely. We can tell simply by looking at the fact that the United States has a huge trade surplus with China. We know this from the National Income Accounting I discussed above. If things were reversed, it would be different, because developed countries are supposed to be flooding developing countries with capital. But it isn’t that way and so we know.
Regardless, we are left with the great apologists’ war cry, “We must do something!” And that something just happens to make Walmart’s supply chains that much more profitable. And it makes Sony’s copyrights that much more profitable. But American workers? They are supposed to shut-up and accept their subsistence service jobs. Go team!