Skip to main content

Econorama continued

Senators and Congressmen are falling all over each other to introduce legislation to do something to China for any of a variety of presumed sins.

Many of these are centered on the concept that the Chinese currency - generally called the renminbe- is artificially undervalued, and, if allowed to float on the open market, would zoom in price vs. the dollar, making U.S. exports etc. more competitive.

Let's examine this policy from the opposite perspective - e.g. - the dollar would sink in value versus the Chinese currency. While this might be of some short-term value to some exporters, it is something of a crash diet, resulting in quick, but short-lived, weight loss. Hasn't a bedrock of U.S. policy since Alexander Hamilton was the first Secretary of the Treasury been a strong dollar? Do we think that a weak dollar is in the long-run best interest of America?

Hardly.

There are a number of constructive things Congress can do should it so chose. First, it could shave a couple of hundred billion from Federal Spending. In that case, the U.S. would begin to pay off debt - including the trillion or so owed the Chinese. Currency flows might just begin to reverse. Second, it could champion education in the U.S. Our deteriorating education standards will make it increasingly easy to export ever better jobs off shore to places like China, where not only will labor be cheaper, it will be better educated.

This does not mean spending more with the Federal Department of Education ( I defy any reader to name three beneficial things that department does without Googling the answer). In fact it might well mean dismantling that department and saving the money....

On every matter of economics, business, competition and international marketplaces I find the ignorance of our elected officials to be appalling.

Comments

Popular posts from this blog

Book Review: What Matters Now by Gary Hamel

Interview of Eric Schmidt by Gary Hamel at the MLab dinner tonight. Google's Marissa Mayer and Hal Varian also joined the open dialog about Google's culture and management style, from chaos to arrogance. The video just went up on YouTube. It's quite entertaining. (Photo credit: Wikipedia)Cover of The Future of ManagementMy list of must-read business writers continues to expand.Gary Hamel, however, author of What Matters Now, with the very long subtitle of How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation, has been on the list for quite some time.Continuing his thesis on the need for a new approach to management introduced in his prior book The Future of Management, Hamel calls for a complete rethinking of how enterprises are run.

Fundamental to his recommendation is that the practice of management is ossified in a command and control system that is now generations old and needs to be replaced with something that reflects an educat…

Add This Great Work to Your History Bookshelf

Team of Rivals: The Political Genius of Abraham Lincoln (Photo credit: Wikipedia)
The more I study American history, the more I realize how little I really know. I just completed Doris Kearns Goodwin’s Team of Rivals in which she explores the inter-workings, personalities and politics of the Lincoln administration.Every American schoolboy or schoolgirl knows that Lincoln presided over the most difficult period in American history save the George Washington era.Most know that he struggled with a series of second rate generals until Grant emerged. And that he was tragically assassinated just as the War Between the States ended. But how many of us know that many of the cabinet members opposed Lincoln in the primary?That many of those thought he was unqualified for the office?That one of them – Salmon Chase – actually tried to build support to oppose Lincoln in the 1864 election?Or that Lincoln’s opponent in 1864 was former General McClelland, who so famously failed to take advantage of his…

Is Too Little Sleep As Bad For Your Brain as Crack?

Sleep is essential to brain health. Dr. Nora Volkow just gave a speech titled Probing the Sleep-Deprived Human Brain. Dr. Volkow is the Director of the National Institute on Drug Abuse-part of the National Institute for Health She gave that speech at Radcliffe College which was reported in the Harvard Gazette.Dr. Volkow is an expert on the effects of addictive drugs on the brain, particularly the effects that cocaine has on the brain. She has found that cocaine disrupts dopamine transmission. Dopamine is a neurotransmitter that plays an essential role in brain function. In part, it is released by neurons to signal other neurons.Specifically, she found that that using cocaine resulted in brain cells releasing dopamine but being unable to receive it. She has found that lack of sleep can have the same effect on dopamine transmission. Here is a quote from her: “Yet lack of sleep itself produces some of the same effects that drugs do: It disrupts memory, inhibits alertness and can contrib…