In the same way that we should enforce rules against China manipulating its currency to make our exports more expensive and their exports to us cheaper.
I just do not even know where to begin with the remarkably flawed logic that President Obama is utilizing in this portion of his quote. The amazing part is that he isn’t the only politician that has a gripe with this, republicans and democrats across the board complain about China in this respect. Obama is accusing the government of China of intentionally inflating their currency so that exports coming from China are cheaper for other nations and imports entering China are more expensive for the people of China. Barack Obama is explicitly complaining about Chinese companies providing products to American consumers at prices that are too low! Once again it almost appears that Obama is choosing to defend the citizens of China over his own constituents. As it stands now, assuming this theory that China is intentionally inflating its currency is true, the people and companies of China are essentially subsidizing our consumption. That is, they are paying for part of the goods we consume by providing materials and labor at prices that are well below what the market price would otherwise be.
Barack Obama, and other bureaucrats, feel that this just is not right, that the people of the United States should not enjoy cheap goods. Their real gripe comes from their delusion that somehow by Chinese companies selling cheap goods that the people of the United States will not be able to make as much money. As I showed in Part 1 of this series, that just is not true. Incomes have consistently gone up over the last forty years and there are actually more people employed as a percentage of population. People have more money to spend and are able to buy goods at cheaper prices, and our politicians wish for this to all end.
If China wishes to inflate their currency in order to provide the rest of the world with underpriced goods then I say we let them. They may import a few less things, which they probably wouldn’t have imported anyway, but it will be more than made up by the cost savings consumers in the United States will enjoy. There is no doubt in my mind that no matter what policy is in place, the people of the United States will import more goods from China than they will export to China for the foreseeable future. China simply has more people and is at the point of economic development that is prime for manufacturing. The American people are making more money as we move away from manufacturing and we are simultaneously enjoying lower prices on the goods we purchase. Why would we want to end that?