Gerald Epstein
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Triple Crisis blogger Gerald Epstein was interviewed by the Real News Network on the recent focus on China’s monetary policy in US politics and media. He asks whether this currency war is a diversion from the real problems facing US economy.
This analysis underplays the damage that “free trade” has done to American workers.
He ignores the fact we can’t generate jobs in this economy because demand is satisfied by imports. The imbalance has caused the stimulus to flow abroad.
The solution to this is to devalue the dollar. China won’t let us do this, because of their peg. QE2 is necessary in part specifically because of China’s peg.
Pegging to the dollar worked for other Asian exporters because they were smaller. It simply can’t work for China, because America has had the blood drained out and can’t fulfill the role of the importer of last resort. This is not China bashing – that rhetoric is misleading.
As for China ‘taking responsibility at the G20’, I won’t be holding my breath.