Maybe Mitt Means Match-time on Manipulation

Posted by scapozzola on 11/15/2011

Today's Politico Morning Money offers some interesting insights into the Mitt Romney campaign. In recent weeks, ManufactureThis has found Romney's tough rhetoric on China encouraging. Specifically, the former Massachusetts governor has vowed to crack down on China's currency manipulation, as well as intellectual property theft and computer hacking.

Politico's Ben White says that this "tough stance on China" is not simply "campaign rhetoric."

White quotes a Romney aide who says that the campaign talk is for real:

“People should wait and see what he does after the Inauguration,” one senior advisor said in response to the contention that the China stance is all talk. “You have to look at how much we buy from China and how much they buy from us. Those numbers are a very serious deterrent to Chinese pursing retribution against us. And from a strategic standpoint, if we are always unwilling to act because we think the Chinese might be willing to act, then we are always going to be stuck at this same point.”

White also says the campaign aide believes that designating China a currency manipulator is "less important than moves a President Romney would make to crack down on Chinese intellectual property theft and other protectionist measures such as import quotas."

2 comments

And from the perspective of

And from the perspective of U.S. corporations actually now manufacturing in China, what could it mean to them to equalize our currencies? Would these U.S. corporations stand with Mr. Romney or fight him (in order to keep their operations up and running in China)? We cannot afford to be so apathetic. We should no longer let ourselves be manipulated by China. If we fail to act soon, what will they think of next? Very thin ice here - I hope we have planned a life raft before we step out on it.

....less than meets the eye

The last qualification is really troubling. Currency manipulation is a much, much bigger deal than intellectual property theft. IPR theft mostly affects the bottom lines for a few multinational corporations; a Chinese RMB undervalued by 40% decimates every single sector of tradables, including both agriculture and manufacturing.

IPR is important but from a jobs and industrial revival perspective it is way down the list. Whether or not Microsoft can charge $150 for each copy of Windows in China matters very little in Muncie. Whether or not Indiana becomes a center of wind turbine manufacturing matters a great deal not only for the unemployed but for thousands of other tertiary businesses.

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