Senator Evan Bayh (D-IN) has been working the right side of his brain hard over the last couple of weeks. Aside from making the ludicrous claim that HRC is better poised than Obama to win a general election against McCain because the states she won count for more electoral votes, he’s been using creative math elsewhere too.
Senator Bayh, along with two others, has sponsored the China Currency Manipulation Act of 2008. If passed, this ominous sounding act is poised to coerce the Secretary of the Treasury into finding that China is manipulating their currency and that the IMF should be consulted regarding what remedies can be sought to correct or stop this evil manipulation.
On 3 April 2008, Bayh’s office shoots out a press release where he says:
American companies and workers are put at a major competitive disadvantage when China engages in massive intervention to lower the value of its currency and lower the cost of Chinese goods…This legislation will force the Treasury Department to stop turning a blind eye to Chinese attempts to gain an unfair trade advantage by undervaluing their currency.
This guy is so out of touch with reality that the mind boggles as to where his statistics come from. Let’s take a look at some hard numbers. A year ago today, one US dollar was worth 7.72 Chinese yuan. Today, the Chinese yuan is trading at around 6.98 to the US dollar. While the yuan has appreciated against the dollar by about 10%, this guy complains that China manipulates their currency to undervalue it.
His other claim is that China is working to lower the costs of Chinese exports. I work in the manufacturing industry and get information first hand about what is going on in China. There is not a shred of truth to what Bayh says, and in fact the opposite is true. Between mandating that workers are only allowed to work 5 days per week, or else receive excessive overtime pay, and requiring employers to enroll them in umpteen different types of social insurance, to cutting electricity on certain days of the week, to tightening controls on pollutants, there is nothing going on in China that reduces the cost of anything. The only price pressures are upwards and these are all artificially created by the Chinese government.
Bayh’s facts are so incredibly wrong and at odds with the truth that the only explanation is that he’s living in an alternative universe. The sad truth is that most Americans won’t know the difference and will accept as fact that China is evil and America is the only country willing to stand up to it.