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More Meyerson Myths

Here’s a letter that I sent yesterday to the Washington Post:

Harold Meyerson’s discussion of U.S. trade with China is a buffet of errors (“A marriage made in China,” Nov. 18).

For example, portraying trade with China as gutting both America’s export potential and America’s manufacturing base, Meyerson fails to mention two crucial facts: First, the inflation-adjusted value of U.S. exports to China in 2008 were more than 300 percent greater than they were in 1998, the year the U.S. normalized trade with China.*

Second, the real value of U.S. manufacturing output continues to rise.  By the end of 2008 – despite the economic downturn – manufacturing output in the U.S. was 13 percent higher than it was in 1998.**

Another error is Mr. Meyerson’s assertion that “By artificially depressing its currency and making its exports cheaper, China is compelling other nations to erect trade barriers.”  Put aside the question of whether or not China truly is “artificially depressing its currency.”  Other nations are no more “compelled” to erect trade barriers in response to Beijing’s cheap-yuan policy than these other nations would be “compelled” to torpedo their own merchant-marine ships in response to Beijing torpedoing Chinese merchant vessels.

Donald J. Boudreaux

* I adjusted these current-dollar trade figures for inflation by using the Minneapolis Fed’s calculator.

** See table B-51 here.