When I read this article on Yahoo!’s front page this morning, I was simply astonished. Is it really possible that my own government thinks that We The People are too irresponsible to decide for ourselves whether or not we should be buying less expensive products from foreign sources like China? Perhaps I should rewind just a bit…
The article quotes both Speaker Boehner:
“I think it’s pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency,” Boehner told reporters.
“While I’ve got concerns about how the Chinese have dealt with their currency, I’m not sure this is the way to fix it.”
and co-author of the bill Charles Schumer:
“For some inexplicable reason, the Republican leadership in the House is siding with the Chinese government. This is not the time to go soft on Beijing,” said Democratic Senator Charles Schumer, a co-author of the currency bill.
“The Chinese only understand one thing: being tough,” he said on the Senate floor, rejecting calls from other senators for multilateral talks.
So what, exactly, are they talking about? Thanks to my friend Mike Simpkins at Truth About Bills, I was able to find the full text of S.1619, the Currency Exchange Rate Oversight Reform Act of 2011. After reading through the bill, what jumped out at me was the following:
Section 4, paragraph a, part 2
DESIGNATION OF FUNDAMENTALLY MISALIGNED CURRENCIES- With respect to the currencies of countries that have significant bilateral trade flows with the United States, and currencies that are otherwise significant to the operation, stability, or orderly development of regional or global capital markets, the Secretary shall determine whether any such currency is in fundamental misalignment and shall designate such currency as a fundamentally misaligned currency.
Section 6, paragraph a
Not later than 90 days after the date on which a currency is designated for priority action pursuant to section 4(a)(3), the Secretary shall determine whether the country that issues such currency has adopted appropriate policies, and taken identifiable action, to eliminate the fundamental misalignment.
Section 6, paragraph a, part 1, subparagraph A
The administering authority shall ensure a fair comparison between the export price and the normal value by adjusting the price used to establish export price or constructed export price to reflect the fundamental misalignment of the currency of the exporting country.
And there you have it. Of course if you haven’t read the whole bill you are just taking my word for it, but nowhere are there any issues with respect to health or safety or anything other than:
This imported widget costs less than this American widget and we simply cannot allow the misguided American people to buy inexpensive foreign widgets. We, your elected representatives, must FORCE you to pay more for your foreign widgets so that you will see the wisdom of buying American widgets instead. Because it we leave it up to you, the people, you might make the wrong choice.