I Wonder Whatever Happened To...

It's not everyday that you open the hallowed editorial pages of the Wall Street Journal and find a column on the undervaluation of the Chinese yuan (sub req) penned by an old childhood chum:

Put it this way: In a counter-factual world where over the past decade China allowed the yuan to float against the dollar, the U.S. would still have run a large and growing trade deficit with China. The real economic forces of comparative advantage that drive trade flows operate regardless of which nominal prices central banks choose to fix.

This week the U.S. government hosts Chinese officials for the second round of the Strategic Economic Dialogue. Treasury Secretary Henry Paulson and Chinese Vice Premier Wu Yi have framed the SED as a forum to address complex policy issues associated with the links between our two countries. In China, further capital-market reform is needed to support economic growth via better risk management and capital allocation throughout all sectors of the economy. Here at home, the large aggregate gains the U.S. has realized from freer trade and investment with China have also generated hardship, too. Many American workers, firms and communities have been hurt, not helped, by Chinese competition.

Issues like these are legitimate and real. But focusing on the dollar-yuan peg is a misplaced and counterproductive way to address them. Instead, let China continue to conduct its sovereign monetary policy and let the SED continue to engage the real challenges. Stop fixating on the fix.

Couldn't have said it better myself Matt. Going all the way back to grade school, he still is one of the smartest people I've ever met.

Now I wonder what happened to that kid who wore bread bags in his boots?

By the way, since my posting today seems to be all WSJ editorial pages all the time, be sure to check out Bob Kerrey's call for Democrats to wake up and face the reality of Iraq (free for all):

American liberals need to face these truths: The demand for self-government was and remains strong in Iraq despite all our mistakes and the violent efforts of al Qaeda, Sunni insurgents and Shiite militias to disrupt it. Al Qaeda in particular has targeted for abduction and murder those who are essential to a functioning democracy: school teachers, aid workers, private contractors working to rebuild Iraq's infrastructure, police officers and anyone who cooperates with the Iraqi government. Much of Iraq's middle class has fled the country in fear.

With these facts on the scales, what does your conscience tell you to do? If the answer is nothing, that it is not our responsibility or that this is all about oil, then no wonder today we Democrats are not trusted with the reins of power. American lawmakers who are watching public opinion tell them to move away from Iraq as quickly as possible should remember this: Concessions will not work with either al Qaeda or other foreign fighters who will not rest until they have killed or driven into exile the last remaining Iraqi who favors democracy.

The key question for Congress is whether or not Iraq has become the primary battleground against the same radical Islamists who declared war on the U.S. in the 1990s and who have carried out a series of terrorist operations including 9/11. The answer is emphatically, "yes."

This does not mean that Saddam Hussein was responsible for 9/11; he was not. Nor does it mean that the war to overthrow him was justified -- though I believe it was. It only means that a unilateral withdrawal from Iraq would hand Osama bin Laden a substantial psychological victory.