Presidential Results: The Key Line in the Last Presidential Debate That You Probably Missed
Before the debate started, I vowed not to listen because I believe that there wouldn't be much of a difference between the two candidates, both former Governor Romney and President Obama. However, at 10' o'clock my wife went to bed so I decided to finally tune in. While I believe that I was mostly right that their foreign policies mirrored each other; they tried to top each other on really absurd points, like who likes teachers more. Romney proudly proclaimed, "I love teachers," to which the moderator exasperatedly quipped, "we all love teachers" and then moved the debate to its concluding remarks.
However, the line that really stood out to me the most was one that perhaps got passed over pretty quickly, and I think should be more heavily scrutinized. The line came when President Obama was touting how he has shaped up American exports during his tenure. President Obama said,
"Now, with respect to what we've done with China already, U.S. exports have doubled, since I came into office, to China. And actually, currencies are at their most advantageous point for U.S. exporters since 1993. We absolutely have to make more progress, and that's why we're going to keep on pressing."
The reason this line shocked me was in the context it was given. In exporting goods, it is to a country's advantage to weaken their own currency in order to make the cost of production cheaper. When this happens manufacturing and other production jobs open up around a country due to cheap labor costs. Though jobs are many wages are small. This is why all of your toys used to say, "Made in Japan," and then when Japan's currency got too strong, "Made in Taiwan", and then "Made in China". China has for years been famously been manipulating its currency, making its own currency weak in order to land loads of manufacturing jobs.
To Romney's credit in this campaign, he has called shenanigans on China and said he would seek action against China for manipulating its currency through the WTO. However, one thing many commentators have said is that the US can't call out China because we have been doing the same thing. Usually these comments are cast aside as lacking concrete evidence. However President Obama's comment I believe raised at least a few eyebrows by specifically stating, "U.S. exports have doubled, since I came into office, to China. And actually, currencies are at their most advantageous point for U.S. exporters since 1993".
One of the ways the currency is manipulated is by watering it down, i.e. printing a lot of money. This is especially harmful to the lower and middle class who see their paychecks remain the same while they can buy fewer and fewer goods. Ben Bernanke the Chairman of the Federal Reserve (who prints the money) recently said, "monetary easing [i.e. printing money] that supports the recovery in the advanced economies should stimulate trade and boost growth in emerging market economies as well" . Other countries pounced on this remark to cry foul play by the US. For example, Brazil's Finance Minister (the equivalent of the Secretary of the Treasury) said,
"Advanced countries cannot count on exporting their way out of the crisis at the expense of emerging-market economies...Currency wars will only compound the world’s economic difficulties...Emerging markets can’t passively endure large and volatile capital flows and currency fluctuations caused by rich countries’ policies"
Obama may have just unintentionally given away the game. While our news outlets will be sure to miss this, I guarantee you China and Brazil did not.