Commentary by E.J. Smith
A recent Pew Research study shows that 37% of voters identify themselves as independents, 29% as Republicans and 34% as Democrats. In a Wall Street Journal/NBC poll only a third of independents expressed affinity to the tea-party movement while 59% said they were not supporters. I expect affinity for the tea-party movement will only increase among independents and will attract more Republicans and Democrats. The 63% of voters that make up the Republicans and Democrats have had it with big government. The tea-party movement is a meeting point for independents, Republicans and Democrats who want less government in their lives.
Trade and Currency War – Timothy Jones
It seems that every day of late there is a new story of the coming “currency war” or new trade restrictions being created by one country or another in an attempt to gain advantage over another. As Milton Friedman explained so eloquently in his book, Free to Choose, trade restrictions may help a few “special interest” groups, but they leave the rest of America paying higher prices for goods they could get cheaper elsewhere. Politicians love a good trade war, it’s almost as effective as a real war to galvanize American spirits and to get out the vote. But nearly every trade restriction ends up being a bad deal for more Americans than it helps.
The close cousin to this policy nightmare is the brewing “currency war.” Tim Geithner has been railing against China (without naming the country) for its currency policies, and Japan and the U.S. are racing to determine which country can devalue its currency faster. Ostensibly the leaders of each country are trying to keep their currency’s values low to keep manufacturing in the country competitive on a world stage. This is simply another form of the trade restrictions I mentioned above, except the good being protected isn’t cotton or steel, it’s labor. In any case, protecting it is equally as detrimental to the majority of Americans who don’t compete with China or any other country for business.
The currency war is getting so bad that an international group of banks has actually asked the G-20 to look at a single world currency to eliminate the massive currency value fluctuations being seen today. There was once a world currency, it was called gold. I think though that the banks are looking more toward a world currency system like the Bretton Woods system. Unfortunately the Bretton Woods system is hard to control because a country can simply opt out at any time, which in turn encourages others to opt out.
Politicians need to stop using nationalist feelings and misdirected anger to prop up their own careers and campaigns. Trade wars partially caused and surely deepened the Great Depression, America doesn’t need a repeat of those same failed policies.
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