Krugman Madness

Finally, Mr. Krugman gone mad. And the last straw was actually what he wished for: a Chinese announcement of RMB appreciation. The only problem? Not fast enough to save him from going crazy.

The incompatibility between Mr. Krugman's academic civility and his political sourness against China has been long recorded in the New York Times op-eds, but this time he just reach a new high: a mostly angry, illogical, disparaging climax. Of course, as a liberal with a "conscience" somehow he has to do so to prove his worthiness. And of course, as a liberal in the U.S., criticizing China has no down side anyway. But let's look at his mad piece.

Again, Mr. Krugman blame China for all the problems in the world, which he actually means America. For when the dollar went down against everybody else, the pegged yuan provoked some antagonism from many others, but since dollar's rise, yuan also climbed rapidly, eliminating non-dollar complains. Krugman seemed to forgot that effect. He blamed China for all the lost-jobs in the U.S. and also forgot to mention that the U.S. multinationals got 70% of the share while Chinese workers got mere a single digit. Surely he loves the recent labor movement in China, but again he was false to blame the exchange rate. Rather, most protests were against foreign companies which made their sales IN CHINA!

He never could come up with any reason why the yuan appreciation would "re-balance" the world trade and bring the jobs back to the US. In fact, those jobs would most definitely move to Vietnam or somewhere else, and the consumer in the US would probably suffer a bit more. Well, maybe at that time, he'd complain about some other country's exchange rate distortion "crime".

Most significantly, Mr. Krugman attributed all government dollar reserves to open market purchase of foreign currencies, ignoring what he had already mentioned capital account regulations.

ultimately, his wishful thinking of yuan appreciating 50% overnight will only destroy both Chinese and the U.S. economy, since the two are now closely tied to each other. His prescription will send the world down to a Great Black-hole altogether.

Perhaps Mr. Krugman has been immersed in American politics for too long and applied his anti-corporate ideology to China too easily. It is not some numbered exporters hold the Chinese government hostage, it is the legitimate claim for jobs from ordinary Chinese people that counts!

Funny how a self-claimed liberal democrat suddenly turns into a fascist imperialist once across the pacific ocean.

If Krugman really wants his dream of American full employment, he should have given more advice on how the US government could improve its stimulus plans and stop wasting the world's treasure on futile wars. He should have persuaded the congress to get rid of the stupid trade bans and investment barriers. He should have encourage his fellows to realize that it's time for them to stop living like the world's resources are infinite.

All in all, he could either come back to reality or stay in his bitter fantasy. As to his crusade against the Chinese currency? The earlier he sync with the rhythm of the Chinese economy the sooner he'd come up with a more realistic approach.