Surprise! Clinton, Obama Back China Currency Bill

Surprise! Clinton, Obama Back China Currency Bill

I'm actually quite curious what would happen if the US Congress passed one of these China currency manipulation bills. As we all know, a two-thirds majority in both houses is required to override a presidential veto which will surely come if a China currency manipulation bill is passed in Congress. Clearly, the maths work against any putative China bashing legislation; witness the non-events known as Ryan-Hunter and Baucus-Grassley-Schumer-Graham. But, don't let this fact faze you as there is yet another China currency manipulation bill waiting in the wings: Stabenow-Bunning. I will spare you its details as it is the same old story: Section 301 is fun. There may be a potentially new wrinkle with this one though as it will be deliberated near the time of the US presidential elections. Reuters reports below that both Democratic presidential candidates Hillary Clinton and Barack Obama--a signatory of the "China Currency Coalition," by the way--back Stabenow-Bunning.

My opinion on the matter of Chinese currency manipulation remains the same: many Americans apparently do not appreciate the big favour China does them by propping up a currency unloved by the world. Those McMansions and SUVs as well as the Iraq invasion have all been bankrolled by the burghers of Beijing. Yes, Chinese efforts to meddle with the USD/CNY are on an unprecedented scale. It is arguable though that China is just another in a long line of scapegoats for what ails America. Blame the furriners always works a treat as a vote-getting platform; we're not at fault here, it's those dratted furriners causing all the trouble. Given the astonishing size of global economic imbalances, I actually think the passage of one of these bills would be just the ticket to start reducing these imbalances. However, I think that the authors of these bills and their supporters will find the US will lose out more than China. Europe, not the US, is China's largest trading partner, and there are many developing markets where China can sell its wares. The US needs China more than China needs the US.

To fix one thing--crazy huge global economic imbalances, and clarify another--see who's top dog in the global political economy, I urge the US Congress to bash China as hard as possible. Go ahead; pass a China currency manipulation bill. It will make you feel good. However, I suspect that doing so will only demonstrate my tongue-in-cheek conviction that offending the Chinese will only demonstrate who the real owners of America are. It should be interesting to watch what happens when Sammy the Beggar throws his cup at the head of Mao the Multitrillionaire. Yuan blood? You've got it:

Democratic presidential candidate Barack Obama said on Thursday he supported a Senate bill to offset China's "currency manipulation," one day after his rival Hillary Clinton added her name to the list of legislation's co-sponsors. "The Bush administration has failed to act on China's currency manipulation," Obama said in a statement endorsing legislation proposed by Sen. Debbie Stabenow, a Michigan Democrat, and Sen. Jim Bunning, a Kentucky Republican. "This is unacceptable and allows China to continue inaccurately valuing its goods in a manner that mirrors a subsidy," Obama said.

The Stabenow-Bunning bill would define currency manipulation as a subsidy under U.S. trade laws, opening the door for the Commerce Department to impose countervailing duties on a broad array of Chinese goods. Individual companies or industries would still have to petition for the relief before duties are imposed.

"This bill would allow a domestic producer harmed by this practice to seek redress through our fair trade laws," Obama, a Democratic senator from Illinois, said. "That is why I co-sponsored the Currency Exchange Rate Oversight Reform Act earlier this year, and that is why I am co-sponsoring the Fair Currency Act today," he said.

Clinton, a Democratic senator from New York, signed on as co-sponsor of the legislation on Wednesday. The two senators are in a tight race for their party's presidential nomination, with a pair of state contests in Indiana and North Carolina on Tuesday.

A U.S. manufacturing group said they hoped Obama and Clinton's support for bill would jump start currency legislation in Congress, which has been stalled after a spurt of activity in the Senate Banking Committee and Senate Finance Committee last year.

"Domestic manufacturing has been pressing hard for passage of these bills and it looks like our message is beginning to be heard," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Welcome It: The Hispanicization of the USA

It should be absolutely no surprise to anyone that I am favourably disposed to this Wall Street Journal article which discusses demographic trends in the USA. That I adopt a pro-immigration stance is no mystery. However, this latest article should give even those who are critics of immigration a pause. Based on US Census Bureau statistics, Hispanics are by now the largest minority group in the country and are gaining ground very quickly, indeed. While immigration accounted for a lion's share of the increasing Hispanic population in the 1990s, this has since given way to births among Hispanics in the current decade. I have always suspected anti-immigrant sentiment as barely concealed racism of the Tancredo/Dobbs/Buchanan variety. It should be interesting to see how the followers of those famous uniculturalists react to this latest demographic trend. Hispanic-Americans are as American as anyone else.

Donald Terry of the Inter-American Development Bank puts things this way: "If you are pro-economic growth, you must be pro-immigration and pro-Hispanic, because we don't have the workers." The population replacement rate is 2.1, while the current fertility rate for a Caucasian woman is just 1.8. However, the rate for a Hispanic woman is 2.8. Do the math. Although the country is currently in economic doldrums, it is arguable that the USA has more favourable prospects than other developed countries in demographic terms, especially those in Europe. Don't even bother to mention Japan. Pragmatic Americans will deal with this emerging reality with equanimity. Certainly, it is necessary to integrate growing Hispanic communities by ensuring, for instance, that they don't become too self-contained and avoid becoming conversant in English. In any event, welcome to the future of the United States:

Hispanics now account for more than 15% of the U.S. population, and their surge is largely the result of births among people already in the country, according to new Census Bureau data. In an annual report, the Census said there are 45.5 million Hispanics in the U.S., up from 35.7 million in 2000, when they made up 12.6% of the population. It said growth among Hispanics was responsible for half of the U.S. population gains between 2000 and 2007.

In the 1990s, a flood of Hispanic immigrants explained most of the group's population rise. That has changed in recent years. Between 2006 and 2007, about 62% of the increase in Hispanics came from births. "The Hispanic population has taken on a momentum of its own," said Kenneth Johnson, senior demographer at the University of New Hampshire's Carsey Institute. "If you close the borders tomorrow, there is still going to be a large Hispanic increase."

Hispanics increasingly are venturing beyond their traditional centers of population and moving to the Southeast and the Midwest, in search of better opportunities and a lower cost of living. The new numbers help show why presidential candidates have courted Hispanics aggressively in this campaign and run advertisements in Spanish. Hillary Clinton's popularity among Hispanic voters helped her win primaries in Texas and California. Both victories were key to her survival in the race for the Democratic nomination. "Latinos will become increasingly important because of their sheer numbers," said Daranee Petsod of Grantmakers Concerned with Immigrants and Refugees, an advocacy group.

Growth in spending by Hispanics is likely to outstrip that of the general population in coming years. Hispanics control more disposable income than any other minority group. The figure stands at $860 billion a year and is expected to hit $1.3 trillion by 2012, according to Jeffrey Humphreys, who monitors Hispanic demographic and economic trends at the University of Georgia's Selig Center. In recent years, consumer-goods companies such as Procter & Gamble and other businesses have invested significantly more advertising dollars to reach Hispanics, both in Spanish and English.

Between 2000 and 2007, 16 states -- among them West Virginia, Illinois and New Jersey -- saw their white population decline, according to the new Census data. Over the same period, whites accounted for a majority of population growth in only 11 states. About two-thirds of Americans are non-Hispanic white, while about 12% are non-Hispanic black, according to the Census Bureau.

Hispanic families tend to have more children. The population is also younger on average, so the large number of births isn't balanced out by deaths. Between July 2000 and 2007, there were 8.4 Hispanic births for every death. African-Americans had 2.4 births per death. The ratio for whites was 1.6.

As Americans age and the baby boom generation retires, Hispanics may help buttress the economy and the Social Security system. The average white woman in the U.S. has 1.8 children, which is under the replacement rate of 2.1 necessary to maintain a stable population. Hispanic women, meanwhile, give birth on average to 2.8 children.

According to the Pew Research Center, whites are projected to make up only 45% of the working-age population in 2050, down from 68% in 2005. The center projects that the share of Hispanics in the working-age population will rise to 31% from 14%. The ratio of senior citizens to working-age people age 25 to 64 will grow to 411 seniors per 1,000 working-age people in 2030 from 250 per 1,000 in 2010, according to Dowell Myers, a demographer at the University of Southern California.

"If you are pro-economic growth, you must be pro-immigration and pro-Hispanic, because we don't have the workers," says Donald Terry, a senior official at the Inter-American Development Bank in Washington.

Many immigrants are bypassing traditional gateway states in the Southwest, while many U.S.-born Hispanics have left states like California. "They are finding it more difficult to find work at the cost of living that's needed in some of the initial gateways" like California and Arizona, says William Frey, a demographer at the Brookings Institution, a Washington think tank. There are shifts within the gateway states, as well.

Hispanics have also settled in small towns, to take jobs in such industries as meatpacking, textiles and construction. The children of Latin American immigrants are helping offset a decline or slower growth in the school-age population in states such as Georgia and Iowa. In Minnesota, the Hispanic population grew 166% during the 1990s, almost three times the rate for the country overall.

Many of these Hispanic communities are now growing swiftly even without taking immigration into account. "The base population of Hispanics already here is so large that it is virtually impossible for immigration to play as important a role in population growth as it has historically," said Mr. Humphreys of the University of Georgia.

The spreading out of Hispanic workers is causing changes in communities across the country, and some stresses. Communities must address language difficulties and educational needs of Hispanic students, who have historically scored lower on standardized tests than other students and recorded higher dropout rates.

Hispanics have been flocking to Hilton Head Island, S.C., since the mid-1990s in search of jobs. In 2006, officials there decided to offer bonuses of $150 a month to town employees who speak Spanish. "Day-to-day realities dictated that we improve our communication with the Hispanic population," said Hilton Head's human resources director, Nancy Gasen. The town also has offered Spanish classes to public-safety officials, including firefighters and emergency dispatchers, as well as other employees who deal with Spanish speakers.

In Crete, Neb., the public-school system now offers about 14 adult English classes that meet year-round, with 158 students and a waiting list of around 50. When the adult English classes started in 1990, the program had five students that were taught by volunteers.