I usually try to write about a topic of current interest in the country or the world, so it seemed to me that I had two big choices from which to choose this week. Either mass shootings or money manipulation. Since I also like to keep things a bit lighthearted, I’m opting for the latter. Except to say this: Dayton, Ohio, is my hometown. In my youth, I enjoyed an occasional evening of revelry in the Oregon District where the tragedy took place. When you read about something like that happening in a place you know so well, it adds another dimension of sadness to the event, and compassion for all those grieving.
Now, let me ask this question: Does anyone west of Wall Street really and truly understand what China did this week? Yes, I know. It devalued its currency so that it now takes 7.1 yuan or renminbi to equal one U.S. dollar instead of 6.8 or 6.9 yuan or renminbi. (And what the heck is a renminbi? If China has a “Bowling for Dollars” TV show – a big hit in America in the 1970s – is it called “Bowling for Yuan” or “Bowling for Renminbi?” I honestly had never heard the word renminbi before this week. Which shows you the depth of my global economic knowledge.)
From a total layman’s viewpoint (and, granted, a decidedly American one), it seems to me China is running a little scared. It doesn’t like the tariffs that have been placed on its products coming into the U.S. Well, jeez, nanny-nanny-boo-boo. The Chinese have been eating our trade deficit lunch for years. Did they really think we were going to let them continue to get away with an uneven playing field forever?
According to what I’ve read, at least what I’ve been able to comprehend, until recently, China has been buying a tremendous amount of agricultural products from American farmers. Soybeans top the list, although there are other things such as cotton, pork products and corn in the mix. In return, China sells us textiles, shoes, furniture and high-tech products (computers, phones, etc.).
We can’t eat what they sell us. But the Chinese people, it would seem, count on the U.S. for sustenance. Apparently there just aren’t enough rice paddies to go around to feed a billion and a half people. So what are they doing for food these days? Especially food that now costs more than it did this time last week?
In China, of course, every economic move is dictated by the all-powerful central government. (Mao Zedong’s picture is still on the currency.) So, the average Beijingian on the street knows to keep his or her mouth shut (which is easy since there’s less food to put into it). Now, in this country, if the government tried to limit our supply of food, well, we’re talkin’ tar and feathers. I’m thinking we might be able to get away without mangos, kumquats, and maybe even bananas for awhile. But I predict an immediate march on Washington should the supply of cocoa beans ever be trifled with. (I’ll lead it with Snickers bars in both hands.)
Listening to the rhetoric from economists about the tit-for-tat game now being played is akin to deciphering a foreign language. Do you suppose that’s done on purpose to keep We the People from having a clue about what’s really going on? The Dow Jones plummeted 700 points or so one day this week because investors were jittery. When aren’t they? Shoot, those people are seemingly always in a constant state of skittishness. Some day I truly believe the business news shows are going to report that, “Wall Street was fidgety today because of reports that Chinese President Xi Jinping had a little gastrointestinal distress after not getting his morning soybean muffin.” I’d say serves him right for banning the U.S. crop from coming ashore.
Now, obviously I’m making light of what no doubt is a serious matter. But it certainly seems to me that China is playing a very dangerous game. The Chinese can’t have their corn and eat it too. They have to know they’re going toe-to-toe with a guy who doesn’t like to lose. Democratic presidential candidates so far anyway have hinted they might do things differently, although I don’t believe a concrete plan has emerged. It’s interesting that none of them have immediately called The Donald evil, mean, wicked, bad and nasty on this particular issue.
Perhaps trade topics don’t lend themselves to sound-bite responses or campaign slogans. Although here are two for consideration: Recount the Renminbi! or Stifle that Yuan!