Peter Morici makes good points.

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China’s Dragon Does Not Flinch and the Bernanke’s Toothless Dog

by Peter Morici

This week, the big news continues to center around the dollar and the credit crisis. Secretary Henry Paulson returns from China empty handed on the dollar-yuan exchange rate, and Federal Reserve Chairman Ben Bernanke is stunned when an interest rate cut sinks the stock market.

Henry and the Dragon

Paulson continued his Strategic Dialogue with Chinese officials but was broadly rebuked in his efforts to persuade China to meaningfully revalue its currency.

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Robert Scott writes sanely and expertly when ferreting out the true impacts of trade on the economy.  He is a borderline heretic, using facts and analysis instead of slogans and assumptions like the wacko free traders. His position is Director of International Programs at the Economic Policy Institute.

Dr. Scott's op-ed on Henry Paulson's impotent Strategic Economic Dialogue® appeared today in the Washington Times.

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Article published Dec 13, 2007
China's currency defiance

December 13, 2007


By Robert E. Scott - Early this morning the U.S. and China concluded their third "Strategic Economic Dialogue" in Beijing, and there was no reason to expect significant progress on one key issue of contention: China's refusal to significantly revalue its currency, the yuan, despite widespread agreement among economists and G-8 officials that its substantial undervaluation is suppressing imports.

Unfortunately, Treasury Secretary Henry Paulson's approach has been unlikely to move China on the currency issue or to address other urgent issues on the table, including food and product safety. The administration needs to work with the G-8 leading industrial nations and other key trade partners to negotiate an international currency accord with China and other currency manipulators, and be prepared to use real threats of sanctions to persuade them to abandon currency manipulation.

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Call me naive, and I know you will, but trade agreements should be 2 pages long.  Multilateral lowering of tariffs and subsidies.  Rules of origin to prevent fraudulent bootstrapping of goods from non-signatory countries into the  the relationship.  We don't the hundreds of other pages giving foreign corporations the right to strike down our laws, or using nice words like "harmonization" to prevent us from prohibiting products that kill and injure people.

The Dems began looking for tougher labor and environmental standards back when the trade deficit was a fraction of what it was today.  Now, tougher standards are a pimple on the elephant.  Not one job will be saved.  The $250 billion in GDP we have foregone will not come back with International Labor Organization standards in a trade deal.

Dorgan is right, however, to focus upon Wal-Mart's sweatshop labor.  Dorgan is one of the most sensible heads on trade inside the beltway swamp.  You remember Wal-Mart.  I actually used to shop there, but the stuff broke all the time. 

The Wal-Mart logo is simple and happy.  It gives us hope.

Apparently, the National Labor Committee found stuff under Wal-Mart's "don't ask, don't tell" rug.  Dorgan is speaking out on the report.

Christmas tree ornaments sold at Wal-Mart Stores and other major retailers were made in a Chinese sweatshop employing workers as young as 12 and others who work more than 100 hours a week. ...

[The report] found that some employees had been paid as little as 26 cents an hour, half the legal minimum wage in China, and that employees in the spray paint department had handled potentially dangerous chemicals with little or no protection. 

Yup.  America is just not as efficient and competitive as they are.  Adam Smith's comparative advantage is the explanation.  Merry Christmas... for some.