Wednesday, October 6, 2010


This is Lynn Jenkins, she does not represent us

China has been propping up its currency. Lynn Jenkins apparently thinks that is okay. What are the effects of China's currency policies? First a little detail about Chinese money. The Chinese yuan is like the British pound, it is the unit of accounting. The Chinese renminbi is like the British sterling, it is the unit of currency.

According to the International Monetary Fund, China's exchange rate policy contributes to large trade deficits in the United States. The overvalued Chinese currency has a negative impact on economic growth and job creation. The Chinese are placing a drag on international trade policies, making it more difficult for countries to import and export goods. The overvalued Chinese yuan depresses interest rates and may be a contributing, if not exacerbating, factor in the recent global economic crisis. The Chinese policy distorts investment patterns as China looks for overseas investments of accumulated American dollars to keep the renminbi undervalued.

One economist, Peter Morici, formerly the chief economist of the International Trade Commission, said the U.S. trade deficit with China will reduce American Gross Domestic Product (GDP) by more than $400 billion.

The 2008 Nobel Prize winner in Economics, Paul Krugman, estimates that China's exchange rate policy reduces American GDP by 1.4 to 1.5 percentage points each year and equals 1.4 to 1.5 million fewer American jobs each year.

The budgetary implications of H.R. 2378 estimate that this bill will produce $125 million in revenue, from increased customs duties, for the period of fiscal years 2011 - 2020, while costing $41 million for salaries, expenses, & benefits for additional staff. The bill does not trigger the Unfunded Mandates Reform Act. The pay-go considerations show the bill increases revenues and does not involve direct spending .

Although discussions have been held on this topic with China, they refuse to budge from their position.

So what part of Chinese monetary policy does Lynn Jenkins favor? Does she like the cheap lead laden toys dumped on our kids? Does she like America being a debtor nation to China? Does she favor Chinese people working rather than American people working?

To summarize China's monetary policy gives the United States large trade deficits which means it is costing us more money than it is worth to do business with China; economic growth and job creation are stunted; international trade is negatively impacted restricting the flow of goods between nations; Chinese monetary policy made the global economic crisis worse; China is investing American dollars to keep the Chinese renminbi artificially cheap.

So what to do? The House of Representatives has answered with H.R. 2378, the Currency Reform for Fair Trade Act, which contains sections amending Title VII of the Tariff Act of 1930 to clarify that countervailing duties may be imposed to address subsidies relating to a fundamentally undervalued currency.

What could keep a fiscally responsible incumbent Republican Representative to Congress from voting for H.R. 2378? Maybe it is the Chamber of Congress' China Connection.

The U.S. Chamber of Congress endorsed Lynn Jenkins' candidacy on June 29th.

The problem with the Chamber's endorsement is that the Chamber lobbied for TARP and the American Recovery and Reinvestment Act, as that legislation was necessary to keep Chamber members on life support until the most critical part of the economic crisis passed. Lynn Jenkins is opposed to the Stimulus, and the TARP predates her tenure in the House.

The other huge problem with the Chamber's endorsement is that MSNBC and other sources were reporting last night that Chamber membership is now open to foreign corporations. Those corporations are sending their checks directly into the same Chamber of Commerce checking account the Chamber uses to pay for attack ads against Democratic candidates.

Remember when Associate Justice Sam Alito retorted to President Obama's remark that the decision in Citizen's United would not permit foreign corporations from influencing American elections? Well here it is. The Chamber of Commerce needs to be investigated by the Department of Justice for being a front for Chinese, Indian, and other foreign corporations attempting to buy influence in American politics.

The Republicans are voting to keep tax credits that encourage shipping American jobs offshore. The Republicans are voting to keep the import duties down on Chinese products, costing America direct revenues from customs and duties, costing America at least $400 billion in GDP, and costing America close to a 1,500,000 American jobs each year.

Ironically, Lynn Jenkins claims she should be reelected because she has been fighting for jobs. Well, she voted against American jobs when she voted against H.R. 2378, roll call 554. She voted against keeping American jobs in America when she voted closing tax loopholes that let American jobs get shipped overseas, that was H.R. 1586 the FAA Air Transportation Modernization and Safety Improvement Act of 2010. Some record!

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