# Obama makes a potentially catastrophic misstep **URL:** \ **Category:** Great Debates\ **Created:** [January 23, 2009, 4:07pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655 "2009-01-23T16:07:58Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [January 26, 2009, 2:42am UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/81 "2009-01-26T02:42:32Z")
Given that china does not have the personal debt levels of the US, that residential property requires a 30% down payment, that do,estically china has no sub prime problem, chinese holdings of US sub prime related debt is minimal, etc – i’m not quite sure that an export slowdown that ens in 6-8% GDP growthreally qualifies as ‘right where we want them.’ sounds like a rabid NBA fan going into 4Q 20 points down. The is o supra national ‘law’ on currency manipulation. US can unilaterally try something but a trade war won’t help the US economy. ---
**Author:** ![Discordia](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Discordia](https://boards.straightdope.com/u/Discordia)\ **Post date:** [January 26, 2009, 2:45am UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/82 "2009-01-26T02:45:26Z")
> [@sailor](#): > > Can you expand on this? Because China has had higher growth rates than the USA for quite some years and I believe it will continue to be true in 2009. So can you explain how they will be hurt more? Yeah, I’m sure they’re weeping daily over their pathetic 6-7% GDP growth. Wish we could have a recession like that… ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [January 26, 2009, 2:53am UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/83 "2009-01-26T02:53:32Z")
Aside from the well-gone over point that this is not a new issue, **mswas** seems to be missing the crystal-f’in’ clear point about the law that he quoted. What are the dire consequences if the SecTreas determines there has been currency manipulation? _He has to negotiate with China… ON AN EXPEDITED BASIS!!!_ Oh noes! Now I can see why China is so afeared of the word “manipulation!” It triggers US law… and forces a NEGOTIATION! Not an increase in tariffs, not boycotts, not other penalties, but the worst of all outcomes – diplomatic discussions! Horror of horrors! Why doesn’t that damn law just require us to nuke China instead and put them out of their misery! Get over it, **mswas,** there is no here, here. On edit: I just learned about a new provision of Chinese law. If the U.S. Secretary of the Treasury attempts to negotiate with the PRC on currency manipulation, Chinese law requires the Chinese foreign minister to tell the SecTreas to go pound sand until such time as China decides to NOT tell the SecTreas to go pound sand. ---
**Author:** ![Merijeek](https://avatars.discourse-cdn.com/v4/letter/m/f05b48/32.png) [@Merijeek](https://boards.straightdope.com/u/Merijeek)\ **Post date:** [January 26, 2009, 3:15am UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/84 "2009-01-26T03:15:44Z")
> [@Euphonious\_Polemic](#): > > Well then, in the spirit of this “debate”, I will simply wave my paw at your arguments and say “bah”. But will getting a dog for his daughters be a potentially catastrophic misstep? Will it piddle on the Presidential Rug? More importantly, will his choice of a dog offend cat people? Will owners of other breeds be offended? Will his ignoring the pros of a Shih-Tzu offend the Chinese? -Joe ---
**Author:** ![Frostillicus](https://avatars.discourse-cdn.com/v4/letter/f/e9bcb4/32.png) [@Frostillicus](https://boards.straightdope.com/u/Frostillicus)\ **Post date:** [January 26, 2009, 3:20am UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/85 "2009-01-26T03:20:37Z")
Invading Iraq was a catastrophic misstep. Let’s try to keep some perspective. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [January 26, 2009, 1:33pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/86 "2009-01-26T13:33:48Z")
> [@mswas](#): > > He used the word, ‘manipulation’. To which the Chinese premier replied: “Don’t be daft; when I have my hand in my pocket it’s not _my currency_ I’m manipulating”. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 26, 2009, 7:14pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/87 "2009-01-26T19:14:26Z")
Well the SDMB seems to be blowing this off, but just about no one else in the world is. [http://www.ft.com/cms/s/0/104ebcce-eb4b-11dd-bb6e-0000779fd2ac.html](http://www.ft.com/cms/s/0/104ebcce-eb4b-11dd-bb6e-0000779fd2ac.html) > [@](#): > > IMF in discord over renminbi > > By Alan Beattie in Washington > > Published: January 26 2009 02:00 | Last updated: January 26 2009 02:00 > > The International Monetary Fund is caught in a stand-off between members over whether to label China’s currency as “fundamentally misaligned”, a politically explosive move that could stoke global tension over economic imbalances. > > The issue is so controversial the IMF’s executive board has not discussed the Chinese economy since 2006, in spite of rules saying it should regularly assess member economies. > > The decision touches directly on one of the most divisive issues among governments worldwide: the extent to which huge current account deficits and surpluses and artificially managed exchange rates have contributed to the financial crisis. Washington has long pressed Beijing to let the renminbi rise. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [January 26, 2009, 7:21pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/88 "2009-01-26T19:21:11Z")
Yes, and what can the IMF do to escalate this enormous crisis? > [@your article](#): > > Because China is not borrowing from the IMF and appears unlikely to do so in the near future, the fund has no direct instruments to force Beijing to change policy and allow the renminbi to appreciate. But for the IMF to designate its currency as “fundamentally misaligned” would undoubtedly strengthen Washington’s hand in its campaign for a freer-floating renminbi. Again, trade issues are always touchy subjects. Nobody here is dismissing that talk about trade issues always hits someone’s nerves. But if this is a catastrophe in the making, then we’ve had at least three dozen trade catastrophes of far greater importance that have been dealt with in the last five or ten years. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [January 26, 2009, 7:25pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/89 "2009-01-26T19:25:36Z")
> [@mswas](#): > > [China manipulating currency](http://www.marketwatch.com/news/story/Obama-believes-China-manipulates-currency/story.aspx?guid=%7B0778F174-5C02-423B-A330-7C1B63197824%7D) > > The accusation of currency manipulation is a pretty serious gauntlet to throw down. Currency manipulation is a serious crime and Congress is required to act on it. The government has avoided calling China a currency manipulator. > > This seems to me to be the kind of rookie mistake that can come to haunt Obama during his whole administration. What do you think will be the result of this? That was your OP and you have been shown it was factually wrong in many respects. You have also not shown that it was any mistake on Obama’s part, much less a “rookie mistake”. You have not shown anyone else out there thinks it was a mistake. You have changed lanes so many times I have no idea what you are on about now. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 26, 2009, 7:46pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/90 "2009-01-26T19:46:21Z")
> [@sailor](#): > > That was your OP and you have been shown it was factually wrong in many respects. You have also not shown that it was any mistake on Obama’s part, much less a “rookie mistake”. You have not shown anyone else out there thinks it was a mistake. You have changed lanes so many times I have no idea what you are on about now. :rolleyes: If you want to play, ‘gotcha’, then find a different dance partner. I didn’t start off here with a solid opinion. I just am interested in the topic and presented it from one perspective because I always get chastised by the Great Debates regulars if I don’t give them something to scream at. It’s funny how often people think that their opinions are, ‘proof’, of something. Bottom line, I am unconvinced by the arguments presented here. I’ve seen arguments from both sides of the coin, and from reading a lot I can see that it’s not a minor issue as people are trying to play it. It’s not cut and dry. ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [January 26, 2009, 8:17pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/91 "2009-01-26T20:17:28Z")
> [@mswas](#): > > :rolleyes: If you want to play, ‘gotcha’, then find a different dance partner. I didn’t start off here with a solid opinion. I just am interested in the topic and presented it from one perspective because I always get chastised by the Great Debates regulars if I don’t give them something to scream at. > > It’s funny how often people think that their opinions are, ‘proof’, of something. Bottom line, I am unconvinced by the arguments presented here. I’ve seen arguments from both sides of the coin, and from reading a lot I can see that it’s not a minor issue as people are trying to play it. It’s not cut and dry. It is pretty cut and dried, I think. Is the Chinese currency issue in general a big deal? Yes. The world has been talking about it or suppressing talk about it for years. Are the conversations happening now abnormal in any way? No, they aren’t. Is this clearly a “rookie mistake”? No. What is happening now does not depart from standard normal at all. It is more of the same. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 26, 2009, 8:27pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/92 "2009-01-26T20:27:01Z")
> [@Maeglin](#): > > It is pretty cut and dried, I think. > > Is the Chinese currency issue in general a big deal? Yes. The world has been talking about it or suppressing talk about it for years. > > Are the conversations happening now abnormal in any way? No, they aren’t. > > Is this clearly a “rookie mistake”? No. **What is happening now does not depart from standard normal at all. It is more of the same.** But no one outside of the straight dope is saying this. The fact that Geithner used the terms he used has caused everyone to situp and take notice. It’s NOT more of the same, or it wouldn’t be newsworthy. The news reports changes, not the status quo. None of the articles I’ve read on the topic actually see it as more of the same. Only a handful of people on the SDMB see it that way. Whether or not it’s a rookie mistake will be determined by the success of negotiations no? But, for some reason all the journalists reporting on this seem to think that this is a radical shift in the direction of policy. Why do people on this board keep insisting differently from what is being reported? ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [January 26, 2009, 8:56pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/93 "2009-01-26T20:56:01Z")
> [@mswas](#): > > But no one outside of the straight dope is saying this. The fact that Geithner used the terms he used has caused everyone to situp and take notice. It’s NOT more of the same, or it wouldn’t be newsworthy. The news reports changes, not the status quo. None of the articles I’ve read on the topic actually see it as more of the same. Only a handful of people on the SDMB see it that way. This is where I think having more of a context is helpful. No one is sitting up and taking notice any more today than they have for years. Here are a few examples. Please take note of the dates. [Administration Warns China on Currency Manipulation](http://www.foxnews.com/story/0,2933,156836,00.html) [Battle Rises Over China](http://www.washingtonpost.com/wp-dyn/content/article/2007/06/13/AR2007061300670_pf.html) [Report on Chinse Currency Manipulation](http://nl.newsbank.com/nl-search/we/Archives?p_product=CSTB&p_theme=cstb&p_action=search&p_maxdocs=200&p_topdoc=1&p_text_direct-0=0FEA4941B0B6BF52&p_field_direct-0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM) [Congress Tries to Regulate Asian Currency Manipulation](http://www.accessmylibrary.com/coms2/summary_0286-856141_ITM) A quick search shows this going back to 2003 and farther. Seriously, this is just same shit, new day. It has been newsworthy for years, and will continue to be newsworthy because it sounds exciting and because people have short memories. Remember the drama of the Doha round? > [@](#): > > Whether or not it’s a rookie mistake will be determined by the success of negotiations no? But, for some reason all the journalists reporting on this seem to think that this is a radical shift in the direction of policy. Why do people on this board keep insisting differently from what is being reported? Because we have been paying attention and reading these reports for years. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [January 26, 2009, 9:12pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/94 "2009-01-26T21:12:26Z")
> [@mswas](#): > > Right, it’s an unintentional mistake. He intended to make the action but it might not be the right one. Then again it might be the right one. That’s why it’s a debate. Where’s the debate? I must have missed it. You are the only one saying Obama made a (unintentional) mistake but you refuse to support that position. Hardly a debate. I guess you were hoping someone else would do the lifting for you? ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 26, 2009, 9:43pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/95 "2009-01-26T21:43:35Z")
**Maeglin** I really don’t understand this stuff. And I respect your opinion on the issue so I’ll take it under advisement. Yes, I know this has been a constant issue, but I’ve been hearing both sides, that it’s business as usual, and that it’s a new direction. We’ll see how China reacts to all this. ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [January 26, 2009, 9:56pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/96 "2009-01-26T21:56:51Z")
> [@mswas](#): > > **Maeglin** I really don’t understand this stuff. And I respect your opinion on the issue so I’ll take it under advisement. Yes, I know this has been a constant issue, but I’ve been hearing both sides, that it’s business as usual, and that it’s a new direction. We’ll see how China reacts to all this. Just look at some of the rhetoric that was used in the past. Reports today might tell you that it really is a new direction, but you can verify this for yourself with a google news archive search. From the FOX article in 2003: > [@](#): > > The administration said China could be branded a manipulator of currency if the country doesn’t switch soon to a flexible exchange system – something advocated not only by the United States but also by other economic powers. > > A 1988 law requires the Treasury Department to analyze countries’ exchange rate policies and determine whether manipulation to gain unfair trade advantages is occurring. The law has economic sanctions that can be imposed on countries found in violation. > > “If current trends continue without substantial alteration, China’s policies will likely meet the statute’s technical requirements for designation,” the department’s report said. As usual, it is still all talk. This is the kind of rhetoric that is par for the course in trade negotiations. We will see if it is a new direction soon enough. But right now, it looks like more of the same. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 26, 2009, 9:59pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/97 "2009-01-26T21:59:50Z")
What makes it different as the argument I have heard goes, is that the Bunning-Stabenow bill that Obama himself co-sponsored, both indicates that he will, and requires Obama to take a tougher stand. ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [January 26, 2009, 10:04pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/98 "2009-01-26T22:04:16Z")
> [@mswas](#): > > What makes it different as the argument I have heard goes, is that the Bunning-Stabenow bill that Obama himself co-sponsored, both indicates that he will, and requires Obama to take a tougher stand. Legislation to sanction China comes up pretty much every year. As much as I love Schumer, he co-sponsored a detestable bill to add an import tariff of 27.5% on Chinese goods until it relaxed its currency. Here’s another bit of legislation from 2005, sponsored by [Grassley and Baucus](http://www.iht.com/articles/ap/2007/07/27/business/NA-FIN-US-Currency-Senate.php). It’s bipartisan, even. China-bashing usually is. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [January 26, 2009, 11:06pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/99 "2009-01-26T23:06:14Z")
> [@Maeglin](#): > > It’s bipartisan, even. China-bashing usually is. Yes, it is a sport with a long tradition. Finding external enemies is a good way for governments to deflect criticism and China has been a convenient target for many years now. I remember the years leading up to China joining the WTO. Every time the subject came up voices would say that China could not be allowed to join the WTO with it being communist and oppressive and atheist and all that and that they would flood America with even cheaper shit and that if they were alllowed to join then the USA should abandon the WTO. Well, China joined and nothing bad happened. America has even stopped making such a huge show about criticizing China’s record on Human Rights every year when the topic came up. Of course, now the Chinese would just point and laugh. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 27, 2009, 6:56pm UTC](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655/100 "2009-01-27T18:56:08Z")
> [@Maeglin](#): > > Legislation to sanction China comes up pretty much every year. As much as I love Schumer, he co-sponsored a detestable bill to add an import tariff of 27.5% on Chinese goods until it relaxed its currency. > > Here’s another bit of legislation from 2005, sponsored by [Grassley and Baucus](http://www.iht.com/articles/ap/2007/07/27/business/NA-FIN-US-Currency-Senate.php). It’s bipartisan, even. China-bashing usually is. Did they pass? [Previous page](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655.md?page=4) [Next page](https://boards.straightdope.com/t/obama-makes-a-potentially-catastrophic-misstep/482655.md?page=6)