Wall Street Journal Business, March 11, 2010

WASHINGTON (Dow Jones)--President Barack Obama said Thursday the world would benefit if China moved to a more market-based currency system.

"As I've said before, China moving to a more market-oriented exchange rate would make an essential contribution to that global rebalancing effort," Obama said in remarks prepared for delivery at the U.S. Export-Import Bank's annual conference.

Obama, who rarely comments on currency matters, said a change in China's foreign-exchange rate would help the Group of 20's broad drive to rebalance the global economy, with countries with external surpluses, like China, boosting consumption and domestic demand and countries with external deficits, like the U.S., saving and exporting more.

The president's remarks also come a month ahead of a semiannual Treasury Department report that could designate China as a currency manipulator.

With Release of New Trade Deficit Figures, Sen. Brown Urges Obama Administration to Designate China as a Currency Manipulator

In Letter to Treasury Sec. Timothy Geithner, Brown Urges that China be Designated a Currency Manipulator in Semiannual Report

March 11, 2010

WASHINGTON, D.C. - With today's release of new trade deficit figures showing an $18.3 billion increase last month in our trade deficit with China, U.S. Sen. Sherrod Brown (D-OH) today wrote to U.S. Treasury Secretary Timothy Geithner urging him to designate China as a currency manipulator. Brown argued that the artificial devaluation of the Chinese currency has damaged the American manufacturing industry.

The following article written by Javier Hernandez appeared in the NY Times online here. 

President Obama on Thursday announced a broad effort to promote American goods overseas, hoping to bolster competitiveness abroad and create jobs in the United States.

But trade specialists questioned whether the plan had the potential to double exports in five years and create two million jobs - the president's goal - saying the major challenge would be to overcome stiff trade barriers and create new markets.

THE WHITE HOUSE

Office of the Press Secretary

FOR IMMEDIATE RELEASE

March 11, 2010 

Remarks of President Barack Obama - As Prepared for Delivery

National Export Initiative

Washington, DC

Thank you, John, for that generous introduction, and congratulations to you, Fabienne and Luis for the recognition your companies deserve.  Thank you to the Chairman of the Export-Import Bank, Fred Hochberg, forhaving me here; and for all the important work the Ex-Im Bank is doingto help American businesses sell their ideas to the world.  I also wantto recognize the Secretary General of the OECD, Angel Gurría, for his leadership at that institution.

LIVE WEBCAST, 9:30 am ET tomorrow (Friday, March 12):
 
What Can the U.S. Do About China's Currency Manipulation?
 
For those of you outside of Washington, DC who are unable to attend tomorrow's  Economic Policy Institute (EPI) Forum, Currency Manipulation: How Should the U.S. Respond, please WATCH THE LIVE WEBCAST. 
 
 
MORE INFORMATION:
 
WHAT: Economic Policy Institute Forum on Currency Manipulation
WHEN:  Friday, March 12, 2010, 9:30 a.m. - 12:30 p.m. ET
WHERE: Mayflower Renaissance Hotel, East Room, 1127 Connecticut Avenue NW, Washington, D.C.
WHO:
Panel I: Impact of Chinese Currency Manipulation on U.S. Businesses and Workers
· Leo W. Gerard, International President, United Steelworkers
· Laurie S. Moncrieff, President, Adaptive Manufacturing Services and Schmald Tool & Die, Inc.
· William J. Jones, Chairman, Cummins-Allison Corporation
· Scott Paul, Executive Director, Alliance for American Manufacturing ; (moderator)
 
  Panel II: Chinese Currency Manipulation: The Case for Change in U.S. Policy
· Paul Krugman, Nobel Laureate and New York Times columnist; Professor, Princeton University
· C. Fred Bergsten, Director, Peterson Institute for International Economics
· Robert E. Scott, Senior Economist, Economic Policy Institute
· Bruce Stokes, international economics columnist, National Journal; (moderator)
 
 Click here for more information.
 

The following article was written by Sewell Chan and appeared in the NYTimes yesterday here. 

WASHINGTON — After a year in which global exports declined 12 percent in the biggest contraction since World War II, trade policy is heating up again.

But the question is whether the United States is prepared to lead the way or whether protectionist pressures will make it all but impossible for the Obama administration to engage fully with the country’s trading partners.

MI-Gov:  Congressman Peter Hoekstra (R) is leading the Republican pack in the primaries with 28% according to a local polling firm Denno-Noor.   The Dem side is not clear.  Republicans have the edge in Michigan, as of right now, to replace Jennifer Granholm.

PA-12:  John Murtha's death requires a replacement for his 12th District seat.  The Dem leadership chose a Murtha aide, Mark Critz.  Barbara Hafer (D) announced that she was going to primary Critz.  But now she is stepping aside, leaving the road clear for Critz on the Dem side. 

The most serious Republican candidate is Retired U.S. Army Lt. Col. William Russell, who challenged Murtha in 2008.

The special election to replace Murtha will be May 18, 2010, the day of the PA primary election.

I tend to focus upon races in parts of the country that (1) have active CPA chapters or members; or (2) are otherwise interesting, usually because they are swing races or have national significance.

IL-Sen:  Rasmussen now has Alexi Giannoulias (D) polling ahead of Mark Kirk (R), 44-41. 

This is probably believable for two reasons.  First, Rasmussen is a pro-Republican outlier among all the pollsters.  So the fact that it has a Democrat ahead lends more credibility that if another pollster had a Democrat ahead.  Second, this is a 9 point swing towards Giannoulias as compared to the prior Ras poll on February 4, which was taken just after the Illinois primaries.

Rasmussen is the most prolific pollster this year, probably because it received a flood of private investment money last year.  Rasmussen has been criticized for being pro-Republican, but they have been accurate in the 2006 and 2008 elections.  This year, they are certainly a more pro-Republican outlier than the other polling companies as illustrated by Pollster.com, a service which aggregates the results of all polls.  There are three theories:  (1) Rasmussen is right; (2) Rasmussen is wrong; or (3) Rasmussen is wrong now, but will adjust its math so it becomes more right as we near election... thus protecting its credibility

On the pro-Dem side, there is a YouGov internet poll that does well for Democrats, but is regarded by many as unreliable.  

Voter intensity: The major variable is "voter intensity".  You can do a poll of all voters, or likely voters.  The latter is more reliable, generally, for election purposes.  But then there is the voter intensity variable.  Republican voter intensity is high, and Democratic voter intensity is low.  

The math is affected this way.  Nationally, there are more potential Democratic voters than Republican voters (and of course many independents).  But if Republicans turn out in greater percentages, they win.

Independents:  The other more well known variable is the independents... those that have not registered as D's and R's.  Since independents are approximately one-third of voters, if they trend D or R, it has a major electoral impact.

Today we will hear more from Obama on his "doubling exports" goal.  

BULLETIN -- Off embargo at 6 a.m.: President Obama today will sign an Executive Order creating an Export Promotion Cabinet made up of the Departments of State, Treasury, Commerce, Agriculture, Commerce, and other federal agencies whose work affects exports. The President will also re-establish the President’s Export Council, the principal private sector advisory committee on international trade, and name two prominent American business leaders – Jim McNerney, President and CEO of the Boeing Company, and Ursula Burns, CEO of Xerox Company -- to lead the Council. At 11:15 a.m., Obama will announce new details of National Export Initiative, during the Export-Import Bank’s Annual Conference, at the Omni Shoreham Hotel.

You will also hear more on China currency manipulation, but not from the Administration.  More soon.

Yesterday, U.S. Trade Representative Ron Kirk was dispatched to the House to talk with skeptical Representatives on trade.  Louise Slaughter (D-NY), a champion of trade reform, issued a modestly positive press release after the meeting.

The next step for the "doubling exports" goal apparently is this.  President Obama is establishing the President's Export Council.  Boeing and Xerox to head this advisory council.  More process, few results.

This may be a sleepy committee that meets once, gets press, and does not meet much later.  Or it may be a more substantial venue for doing some kind of work.  These advisory committees have access to government information, give advice and interface with bureaucrats.  They have access. 

I suppose we at CPA will have to look at getting committee members the right information.  Or we will ignore that committee.  It remains to be seen.

The full Politico article is below the fold.

News Release
 
Contact: Michael Stumo, 413-854-2580, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Coalition for a Prosperous America
www.prosperousamerica.org
 
March 11, 2010
 
The Pennsylvania Chapter of the Coalition for a Prosperous America (CPA) thanked Congressman Jim Gerlach (R-PA-06) for agreeing to co-sponsor the Currency Reform for Fair Trade Act of 2009 (H.R. 2378).  Members of the Pennsylvania Chapter of CPA who participated in the CPA legislative fly in last week asked Congressman Gerlach to co-sponsor this important legislation.  CPA received notification yesterday that the Congressman agreed to do so.
 
"Currency manipulation is a major problem for the U.S. economy," said Joe McGlynn, CPA PA Chapter steering committee member and Vice President of Campbell Fittings in Boyertown, PA.  "Some foreign countries, particularly in Asia, peg their currency to the dollar at an unfairly low rate.  Many people don't realize the impact, which is a huge tariff on U.S. exports and a major subsidy to their export sales to the United States."