In his Dec. 3 article, "Time to get tough on China," Gregory Clark makes a ludicrous argument for the revaluation of the Chinese yuan. If the yuan appreciated, the U.S. dollar would weaken further, completely contradicting Treasury Secretary Tim Geithner's claim about the need for a stronger dollar. A stronger yuan buys you less stuff in the United States.
Clark conveniently forgets that, until recently, the country running the biggest current account balance surplus was Japan. The Japanese did this by suppressing the real value of the yen. Why not ask the Japanese to let the yen float freely since Japan is already a developed, aging and ailing country? Clark's political case on an economic issue is incompatible.
If China and Japan allowed their currencies to appreciate against the dollar by 20 percent, wouldn't that wipe out 20 percent of the value of the U.S. Treasury holdings they're sitting on? Why should we ask the Chinese and Japanese to shoot themselves in the foot for something that will hardly ease the economic sufferings of America and the rest of the West?
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