U.S. Treasury Secretary Tim Geithner and National Economic Council Director Larry Summers have co-authored an op-ed ahead of the G-20 urging an international agenda that focuses on “work to stabilize debt levels, enact new financial regulation, and reduce…dependence on fossil fuels.”
This sounds laudable, and who could object to stabilizing debt levels? Unfortunately, their lengthy analysis includes only one passing mention of China and not a single word about manufacturing.
Instead, they emphasize the rebounding of the U.S. private sector, which “is generating new jobs”– a recovery that has only come about due to extensive “repair [of the U.S.] financial system.”
The two conclude that what’s needed to move forward is a “global framework for financial regulation.”
All right, anyone want to talk about what’s missing from this picture?
For starters, it’s ironic that Geithner and Summers would mention a reduction of dependence on fossil fuels, when the world’s leading emitter of industrial CO2, China, is so unrepentant about its environmental practices. With China now moving into the top slot as the world’s leading manufacturer by output, it should be cause for widespread concern that China’s output of CO2 and SO2 will only increase, unless concerted international effort is taken to hold Beijing accountable.
Far more significant, however, is the destabilization of the global market that has been wrought by China’s ongoing, predatory trade practices. Since its 2001 entry into the WTO, China has continued to illegally manipulate its currency in order to boost exports, something that clearly rankles the rest of the world.
The U.S. trade deficit with China has tripled since 2001, taking a heavy toll on U.S. manufacturing. In response, it would have been helpful if Geithner and Summers had taken a more real-world approach to the G-20 and urged stronger action on China. Specifically, there needs to be clear action to address China’s currency peg before the global marketplace suffers greater harm