Truck and Barter: Greenspan on China and Protectionism

June 23, 2005

Greenspan on China and Protectionism

By Kevin

Alan Greenspan's testimony to the Senate finance committee is superb. Excerpts:

Some observers mistakenly believe that a marked increase in the exchange value of the Chinese renminbi (RMB) relative to the U.S. dollar would significantly increase manufacturing activity and jobs in the United States. I am aware of no credible evidence that supports such a conclusion....

[A]ny significant elevation of tariffs that substantially reduces our overall imports, by keeping out competitively priced goods, would materially lower our standard of living....

New hires in the United States currently average more than a million per week, half resulting from voluntary job change.

Wow, ~100,000 Americans will quit their jobs today (if quitting is uniform M-F). He closes:

In the decades ahead, it is in our interest and that of the global economy that China continue to progress toward becoming a more market-based, productive, and dynamic economy in which individual initiative, not government decisionmaking, is the fundamental strength behind economic activity. For our part, it is essential that we not put that outcome, or our future, at risk with a step back into protectionism.

Posted at June 23, 2005 10:23 AM

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