Papa Krugman calls for action against China

And to do so he points out the hazards of China's currency manipulation and picks apart the arguments against the current legislation in Congress.

Some observers question whether we really know that China’s currency is undervalued. But they’re kidding, right? The flip side of the manipulation that keeps China’s currency undervalued is the accumulation of dollar reserves — and those reserves now amount to a cool $3.2 trillion.

Others warn of bad consequences if the Chinese stop buying United States bonds. But our problem right now is precisely that too many people want to park their money in American debt instead of buying goods and services — which is why the interest rate on long-term U.S. bonds is only 2 percent.

Yet another objection is the claim that Chinese products don’t really compete with U.S.-produced goods. The rebuttal is fairly technical; let me just say that those making this argument both overstate the case and fail to take the indirect effects of Chinese currency policy into account.

In the last few days a new objection to action on the China issue has surfaced: right-wing pressure groups, notably the influential Club for Growth, oppose tariffs on Chinese goods because, you guessed it, they’re a form of taxation — and we must never, ever raise taxes under any circumstances. All I can say is that Democrats should welcome this demonstration that antitax fanaticism has reached the point where it trumps standing up for our national interests.

Who would have thought that an Anarchist like Grover Norquist would be working for the Communists?