Editor's note: David Frum writes a weekly column for CNN.com. A special assistant for President George W. Bush from 2001-02, Frum is the author of six books, including "Comeback: Conservatism That Can Win Again," and the editor of FrumForum.
Washington (CNN) -- The Financial Times reported Sunday that "global economic co-operation is in disarray and further battles in the currency war look likely after the weekend's meetings of finance ministers and central bankers end with no resolution."
The rancorous meeting took place here in Washington, in the sleek headquarters of the International Monetary Fund. The ministers and bankers had gathered to settle a big dispute over interest rates and currency between the United States and China.
China thinks U.S. interest rates are too low, and the U.S. dollar too cheap. America argues the contrary: It is China's currency that is out of line.
Many influential Americans share the Chinese point of view: Thomas Hoenig, head of the Kansas City Federal Reserve, has strongly argued for higher U.S. rates to prevent future inflation. The Hoenig view is endorsed by prominent financial commentators, such as CNBC's Larry Kudlow and the editorial page of The Wall Street Journal.
But this is one case where the conventional wisdom in America is right. In fact, the conventional wisdom does not go nearly far enough.
Editor's note: David Frum writes a weekly column for CNN.com. A special assistant for President George W. Bush from 2001-02, Frum is the author of six books, including "Comeback: Conservatism That Can Win Again," and the editor of FrumForum.
Washington (CNN) -- The Financial Times reported Sunday that "global economic co-operation is in disarray and further battles in the currency war look likely after the weekend's meetings of finance ministers and central bankers end with no resolution."
The rancorous meeting took place here in Washington, in the sleek headquarters of the International Monetary Fund. The ministers and bankers had gathered to settle a big dispute over interest rates and currency between the United States and China.
China thinks U.S. interest rates are too low, and the U.S. dollar too cheap. America argues the contrary: It is China's currency that is out of line.
Many influential Americans share the Chinese point of view: Thomas Hoenig, head of the Kansas City Federal Reserve, has strongly argued for higher U.S. rates to prevent future inflation. The Hoenig view is endorsed by prominent financial commentators, such as CNBC's Larry Kudlow and the editorial page of The Wall Street Journal.
But this is one case where the conventional wisdom in America is right. In fact, the conventional wisdom does not go nearly far enough.
By David Frum, CNN Contributor
Source: CNN
www.cnn.com
No comments:
Post a Comment