House Committee Approves China Currency Bill

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
The House Ways and Means Committee just approved a bill that pushes China to raise the value of its currency. It looks like the bill will go to a vote on the House floor next week. This is a very big deal because it is a “second front” pushing China to bring its currency to market rates. President Obama met with Chinese Premier Wen yesterday and most of their 2-hour meeting was taken up discussing this issue, and today he gets backing from the House. This tells China that we are serious, that it is more than just the administration talking, and they have to start doing the right thing.
China has been manipulating its currency to keep it low, which means goods made in China cost less in world markets. This, combined with other trade manipulations, has created a huge imbalance in world markets. It moves industries, jobs, expertise, money and power to China, and has created a huge “bubble” of imbalance that threatens the world’s economy. Currently the interests in China and elsewhere, including here, that benefit from the imbalance have the upper hand. But this vote demonstrates that the rest of us, here, in China and around the world, that would benefit from a rebalancing are rallying and challenging the current policies.
Bloomberg: China Currency Measure Heads for House Vote After Panel Approval

The measure would let companies petition for higher duties on imports from China to compensate for the effect of a weak currency. President Barack Obama “does not take a position on this specific legislation,” Jeff Bader, his director of Asian affairs, said yesterday.
“China’s exchange-rate policy has a major impact on American businesses, and American jobs, which is what this is all about,” Levin said before the vote.
The U.S. trade deficit with China widened to $145 billion in the first seven months of this year, from $123 billion for the same period in 2009. The expanding deficit, the unemployment rate lingering at almost 10 percent and polls showing Democrats’ seats at risk heading into the elections have added support for the bill, which has been discussed since 2005.

China had agreed to start rebalancing its currency, but the currency has moved only 1 percent since the agreement – nothing near the 40% some claim it needs to move. Meanwhile our trade deficit with China has increased. China’s Wen claims that China is still a poor country and needs this protection to help it build the industries that will help its people rise out of poverty,

China might now be the second largest economy in the world, but Premier Wen insisted at the UN General Assembly that the “real China” was still in the “primary stage of socialism” and remains a developing country.
Pointing out that 150 million Chinese people still live in poverty, Wen said many regions in central and western China were still very poor and this is the “real China”.
“Taken as a whole, China is still in the primary stage of socialism and remains a developing country… These are our basic national conditions. This is the real China,” he said.

The way to bring China, now the second largest manufacturer in the world, out of poverty is to trade fairly and work with its trade partners, not to manipulate the rules and create a huge imbalance that threatens the economy of the entire world.
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The “Pledge Document” – The Photos Tell The Fantasy Story

Holy Toledo! I downloaded the Pledge To America document. Before reading I skimmed through it and noticed the photos. You try it. Download it and look at the photos. It is clear just who is and who is not “American” in their eyes.
After looking at the pictures, read the thing. Like the pictures, it’s about some kind of white fantasy America. The rich won’t have to pay taxes, “other” spending will be cut — but not anything that might affect you or any programs you like (since nothing is specified) no matter who you are, people won’t need government assistance and certainly won’t get it, companies won’t need to be regulated, women won’t need an abortion even to save their life, the environment won’t need to be protected or cleaned up. Oh, and no one will need to sue corporations – because you won’t be able to anymore. And if people do need those things, well too bad.
The deficit they created with tax cuts will be cured by … tax cuts? The TARP bank bailout they left us with will be cured by … tax cuts? The jobs that never appeared after their tax cuts will be created by … tax cuts? The health care bill will be replaced by … tax cuts? Terrorists will be fought with … tax cuts?
RJ Eskow names it: GOP’s “Pledge” To Rob The Middle Class: No Jobs, No Health Care, No Security,

Once you strip away the rhetoric, the answer is simple: Off the top, their plan is a trillion-dollar giveaway to the rich – at everybody else’s expense. Their “pledge” would slash needed spending, kill jobs and end any hope of growing the economy. It declares open season on the public’s health and safety with a deregulation agenda that would unleash BP, Goldman Sachs, and every other corporation whose risky behavior endangers us. It would lead to even more financial crashes and environmental disasters. Firefighters, cops,and teachers would be laid off in droves. The deficit would soar. We’d face a permanently stagnating economy. The middle class would wither away.
That’s the future they’re offering. It’s Bush on steroids, fattened up and ready to feast on … you. If you like today’s economy, you’ll love the one these guys are cooking up.

RJ goes into detail. Go read.

China Currency Bill Moves — Why Some Corporate Interests Oppose

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
As President Obama meets with Chinese Premier Wen, the House Ways and Means Committee announces it will vote tomorrow on a bill to take action if China does not bring its currency to market rates. This sends a loud and clear signal to China that action is coming, one way or another, and they are going to have to make adjustments. This has every appearance of a smart, coordinated strategy between the administration and the leadership of the Congress.
WaPo: Bill combating China currency to advance,

House leaders are moving forward with legislation to combat China’s currency policies, adding to pressure from the Obama administration and giving lawmakers an election-year chance to vote on a sensitive trade matter.
The House Ways and Means Committee plans to vote Friday on a bill that would expand the Commerce Department’s power to impose duties on Chinese imports in response to that country’s currency being undervalued on world markets.

But there is opposition from inside our own country.

Some business groups oppose the bill, arguing that it could backfire if it raises trade tensions with China and prompts the Chinese government to use the many tools at its disposal to interfere with American companies. China is a major destination for U.S. exports – about $70 billion a year – although the United States runs a trade deficit of about $200 billion a year with that country. Duties on Chinese imports might also raise prices for U.S. consumers.

There are competing interests at work. Robert Reich wrote about this a week ago in The Two Categories of American Corporation — And Their Politics and Harold Meyerson picks up the theme today in The real un-Americans.
Reich points out that some giant companies sell to Americans, and therefore want us strong and prosperous, and want policies that stimulate our economy, provide jobs with good pay and generally boost the middle class. Others, not so much.

The first group includes national telecoms like Verizon and AT&T that need a prosperous America because most of their sales are here. Same with finance companies like Bank of America and Travelers Insurance whose business strategy has been built around U.S. consumers. Ditto certain giant chains like Home Depot. Naturally, all these companies were especially hard hit by the Great Depression and its devastating impact on American consumers.
The second group includes companies like Coca Cola, Exxon-Mobil, Hewlett-Packard, Intel, and McDonalds, that get substantial revenues from their overseas operations. Increasingly this means China, India, and Brazil. Ford and GM are still largely dependent on US sales but becoming less so. …

What does this mean for Main Street? Reich says,

Large American corporations are going global as fast as they can. That’s good for their shareholders. But in a Washington ever more susceptible to their money and influence, that’s not necessarily good for most Americans.

Meyerson picks up on this today,

Consider the debate in Congress about whether to impose tariffs on Chinese imports if China continues to depress the value of its currency. … Unions and some domestic manufacturers support the bill. But a large number of American businesses, in a campaign coordinated by the U.S.-China Business Council, oppose it.
… The question here is whether the 220 corporations that belong to the council … are already so deeply invested in China as manufacturers, marketers or retailers that buy goods there to sell them here that their interests are more closely aligned with China’s than with America’s. [emphasis added]

It is important to understand that some of the country’s most powerful entrenched, wealthy interests no longer depend on the success of America’s economy and the prosperity of our people. They have a lot of power and money, and use it to influence our country’s politics to increase their own wealth and power. But their interests are not our interests. They want low taxes and don’t care whether we have good jobs, good schools, modern infrastructure and an economy that works for We, the People. They just don’t care about that. And they are willing to say and spend what it takes to set us against each other, poison our politics, and anything else they need to do to get us to act in their interests not ours. “Globalization” and “free trade’ policies work for them, because they enable them to evade the protections that our democracy gives us. But allowing them to just move factories and jobs out of the country and then bring the goods back here with no penalty does not work for the rest of us.
Keep this in mind when you hear the different arguments over taxes, infrastructure, education and government in general.
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What’s A Filibuster?

Six paragraphs before they use the ‘F’ word. Move to End ‘Don’t Ask, Don’t Tell’ Stalls in Senate – NYTimes.com
The Senate “voted against.” It “stalls.” The Senate is “paralyzed by the partisan fury” and is “a result of a dispute between Democrats and Republicans.” “Senate Republicans voted unanimously to block debate on the bill.”
And then, finally, six paragraphs down,

The vote was 56 to 43, with Democrats falling short of the 60 votes needed to overcome a filibuster and bring the bill to the floor.

No wonder the public blames Democrats for not getting anything done.

Need Public Option

The big insurance companies aren’t leaving much choice: we need the public option. Congress can pass this right after the election, using reconciliation.
Health insurance: Big medical insurers to stop selling new child-only policies

Major health insurance companies in California and other states have decided to stop selling policies for children rather than comply with a new federal healthcare law that bars them from rejecting youngsters with preexisting medical conditions.
Anthem Blue Cross, Aetna Inc. and others will halt new child-only policies in California, Illinois, Florida, Connecticut and elsewhere as early as Thursday when provisions of the nation’s new healthcare law take effect, including a requirement that insurers cover children under age 19 regardless of their health histories.

Idiot corporatists in the Congress thought the insurance companies were their friends.

Third World America: Reagan Revolution Drags Us Down

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
The recession ended in June, 2009? What? Seriously? No one told the millions of unemployed. And last week we got more bad news: 44 million of us living in poverty, and that was last year, before unemployment and COBRA subsidies started running out for the unemployed,

… four million additional Americans found themselves in poverty in 2009, with the total reaching 44 million, or one in seven residents. Millions more were surviving only because of expanded unemployment insurance and other assistance.

We are living in the Reagan Revolution every day. Conservative policies are making us poor and poorer,

Who counts and who doesn’t count? We hear so much about the “middle class” but rarely about the plight of the poor. And of course we hear again and again that the wealthy are “successful” and the “job-creators” who shouldn’t be “punished” by being asked to give something back to the country that enabled their wealth. Conservative “market” thinking and Ayn Randian “the poor are losers” dehumanizing ideology has become pervasive and dominant as we transition from one-person-one-vote democracy to one-dollar-one-vote plutocracy. In this plutocratic environment the national discussion of tax cuts for the wealthy saturates the corporate media, while the 44 million of us in poverty now are barely mentioned and count for little.

Arianna Huffington’s new book, Third World America, documents what is happening to us. RJ Eskow explains,

Third World America is direct and clear in its message: Decades of aggressive corporate lobbying, driven by bankers and other large corporations, have led to a series of policy decisions that are eroding the American standard of living. The details are all there: The financial industry’s gone from 2.5% of our GDP in 1947 to 8.3% right before the meltdown. Financial profits went from a maximum of 16% between 1973 and 1985 to 41% right before the crisis hit. And rather than being chastened by their failure, or disciplined by taxpayers in return for being bailed out, bankers have embraced their old ways with enthusiasm. Meanwhile the American households that rescued them lost $13 trillion in wealth between mid-2007 and March 2009.

Last week more than 300 economists issued a dire warning that the current conservative “austerity” approach to the economy is dangerous. Focus on jobs now they say,

More than 300 economists, policy experts and civic leaders have signed a statement warning political leaders of “a grave danger” that the still-fragile economic recovery will be undercut by austerity economics of the kind being pushed by conservative politicians and by the White House deficit commission. Read the statement and more at dontkilljobs.org.

Meanwhile, all over the blogs this weekend was the story of the whiny rich, complaining that they “only” make a few hundred thousand a year. Why are they whining?

The reason is that the income inequality has become so extreme that even the really rich see people above them who make VASTLY more than they do, so they feel like they aren’t making hardly anything at all. They don’t look down, they look up, and they see people making millions, hundreds of millions, even billions in a single year.
One more nasty outcome of the Reagan Revolution: even the really rich feel poor compared to the really, really rich who are the primary beneficiaries from conservative policies.

What can you do? There is a One Nation Working Together rally in DC on October 2. PLEASE click this link and find out what you can do to help, even if yo can’t make it to DC. There are local events across the country.
And remember, the election is coming up. We need to remind people that it was conservative policies that got us into this mess. It was conservatives who bailed out the banks. It was conservatives who ran up the massive debt. It was conservatives who killed the jobs.

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Stop Eating Salmon?

The FDA is considering allowing stores to sell genetically modified salmon as food. Fine, if you want that, but what if you don’t? No more salmon for you.
FDA rules won’t require salmon labels,

The FDA says it cannot require a label on the genetically modified food once it determines that the altered fish is not “materially” different from other salmon – something agency scientists have said is true.
Perhaps more surprising, conventional food makers say the FDA has made it difficult for them to boast that their products do not contain genetically modified ingredients.

OK, got that? Not only are they allowing companies to not label this as genetically modified, they are blocking other companies from saying theirs is not modified. So there will be no way to tell, and your only solution is to stop eating salmon altogether.
Remember the health care battle? Predatory corporations were harming people and causing a huge societal problem. After the lobbyists go through with the bill we were all ordered to buy the product of those predatory corporations.

Why The Whining Rich Whine

Yesterday, in the post The Rich Do Whine I linked to a post about a post where a really rich guy is whining about how he isn’t rich at all, and yet Obama is going to bring his taxes up to pre-Bush levels. (This means, by the way, people making $251,000 income might see their taxes go up as much as $39, a little over $3 per month — that is what a 3.9% increase on income above $250K means.)
Brad DeLong makes a very good point about why the rich are whining. The reason is that the income inequality has become so extreme that even the really rich see people above them who make VASTLY more than they do, so they feel like they aren’t making hardly anything at all. They don’t look down, they look up, and they see people making millions, hundreds of millions, even billions in a single year. In Which Mr. Deling Responds to Someone Who Might Be Professor Todd Henderson – Grasping Reality with Both Hands,

Cast yourself back to 1980. In 1980 a household at the bottom of the 1% rich households in America had an income equivalent in today’s dollars $190,000 a year. … You don’t look downward much. Instead, you look upward. Of the 100 above you, 90 in 1980 had incomes less than three times their incomes. And they would have known of 1 person of that 100 who was seven times as rich as they were.
Now fast forward to today. Today a household at the bottom of the 1% rich households in America has an income of nearly $400,000 a year […] . Henderson looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.
And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them–widening income inequality over the past generation has excluded him from the rich who truly have money.

One more nasty outcome of the Reagan Revolution: even the really rich feel poor compared to the really, really rich who are the primary beneficiaries from conservative policies.