Why Oh Why Are We Ruled by These Fools?

Ah. Economic policymaking in the Bush administration. From the Financial Times's Andrew Balls:

FT.com / Home UK - Treasury feels White House heat on policy. By Andrew Balls: [T]he US Treasury suddenly called for China to move immediately to a flexible currency. Two senior administration officials said the call to change tactics on China was a political decision made at the White House. The Treasury's policy - widely supported by China experts who say Beijing is less likely to move in the face of public hectoring - was overturned because of White House concern at rising protectionist pressure in Congress. The sharp change was the clearest sign yet that economic policy in President George W. Bush's second term is going to be led firmly from the White House.

A tight team of close associates of the president is calling the shots, say current and former administration officials. This group consists of Dick Cheney, vice-president, Andrew Card, the president's chief of staff, Joshua Bolten, director of the Office of Management and Budget, and Karl Rove, the president's political adviser who has assumed a broader co-ordinating role, including overseeing economic policy....

[O]verruling the department on foreign exchange matters, traditionally the Treasury's domain, marked a new departure. It is not clear exactly who made the call on China.... Richard Medley, head of Medley Global Advisors, tells clients that there is no one dominant voice on economic policy.Messrs Cheney, Card, Bolten and Rove, the key decision-makers, take the lead on different economic policy issues.... The White House inner circle is widely acknowledged to consist of very smart people, but they are not economists and do not have financial market backgrounds. Some current and former administration officials worry that when the decisions are taken, there is often no economist in the room...

Comments

[oyster]

How could such a forceful presence like Secretary Snow get railroaded on this?

[derrida derider]

I think this is a very cunning move by the Bushistas. They don't want China to revalue sharply, but they do want to deflect blame from themselves. So trying to publicly bully the Chinese kills two birds - it ensures China won't revalue sharply, and it focuses attention on the foreigners.

Pity about the long-term good of the country, but then that's always been the last of their priorities

[praktike]

terrifying.

[SW]

"They are known to be very smart people..."
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[Bernard Yomtov]

"The White House inner circle is widely acknowledged to consist of very smart people, but they are not engineers and do not have construction backgrounds. Some current and former administration officials worry that when the bridges are designed, there is often no one in the room who knows anything about bridges."

[bakho]

"Some current and former administration officials worry that when the decisions are taken, there is often no economist in the room"

DUH

[chris]

If the chinese do decide to revalue, will it be because Bush decided to stop support of Taiwan? There has to be some trades.

[masaccio]

"Karl Rove, the president's political adviser who has assumed a broader co-ordinating role, including overseeing economic policy...."

Boy, that Karl Rove is certainly a renaissance man: first religion, now mammon, that guy can serve any master.

[John M]

(Card (engineer) + Bolten (lawyer) + Cheney (grad school dropout) + Rove (college dropout)) = (no economists + no Chinese speakers + no former bankers + no bond traders) < necessary experience to solve this problem

[DOR]

I've been trying -- without success -- to find a Treasury or Commerce report on China's exchange rate. The report was due last October, but was delayed a month until after the election. I recall it said the Chinese were not unfairly manipulating the exchange rate.

Anyone know where I can find it?

DOR
(Chinese-speaking economist with an MA)
.

[anne]

http://www.nytimes.com/2005/04/18/business/worldbusiness/18shanghai.html?pagewanted=all&position=

Pushing (and Toeing) the Line in China
By DAVID BARBOZA

BEIJING - Hu Shuli, the most powerful business editor in China, used to write propaganda for Workers' Daily, the Communist Party's publication. Now Ms. Hu pushes an aggressive staff of 50 young journalists to investigate government corruption and lift the veil on corporate fraud in China.

Since 1998, Ms. Hu, 52, has been the driving force behind Caijing magazine, a thriving business journal published twice a month that is now a must-read in the capital. At a time when the state still holds tight control over the media, regularly censoring articles and closing down errant publications, Caijing (which means 'finance and economy') has artfully pushed the envelope on what is journalistically permissible, writing exposés on the government's reaction to severe acute respiratory syndrome, or SARS; stock market manipulation; and corruption at some of the nation's biggest state-owned banks.

'I know how to measure the boundary lines,' Ms. Hu said over lunch. 'We go up to the line - and we might even push it. But we never cross it.'

Caijing's aggressiveness, which has earned Ms. Hu the title of 'most dangerous woman in China' in several press articles and magazine profiles, is a result, in part, of its status as a business publication in China. While press freedoms are severely restricted here, the government - perhaps hoping to develop an open and robust capital market system - has given the business news outlets here greater latitude and broader press freedoms. And while Ms. Hu's glossy journal has carefully steered away from some political issues, like the Falun Gong movement, that the government has deemed largely off limits to the press, media specialists say that Caijing has become one of China's first noteworthy magazines built on Western journalism practices.

'Caijing is about as good as it gets in China,' says Orville Schell, dean of the graduate school of journalism at the University of California, Berkeley, which has trained several Cai-jing reporters and editors. 'And they've picked the perfect niche - business - which gives them the maximum latitude to do investigative work in China.' ...

[anne]

American relations with China are far more complex than can be described by related economic models. China and India are rapidly emerging as principal political-economic powers in Asia. These countries alone have 2.4 billion people and economic growth with increased openness over the last generation has changed the power relations of these countries in Asia and beyond profoundly. Any economic initiative of America with regard to China or India will be tempered many times over in final analysis by political ramifications. Relations with India and China must and will be more broadly considered than through a trade lens.

[anne]

Where is political economy? I am much struck by the singular and limiting focus of economic analysts on trade relations with China and India. Broadening of analysis by economists is called for.

[Derelict]

Wingnut response: Having an economist in the room would be just sooooooooo elitist, don't you think?

The real reason economists are excluded is that anyone with any training or experience in this area would immediately shoot Team Bush's economic proposal full of holes. Since the Shrub simply can't bear to hear views that don't agree with his whims, well . . .

[grytpype]

Who needs an economist in the room when Dear Leader gets his policy directly from Jesus Christ, our Savior?

You think Jesus can't handle economic policy? Why do you liberal elitists hate Jesus so much?

[dearieme]

"Why Oh Why Are We Ruled by These Fools?": because enough voters thought that a Kerry administration would probably prove even worse?

[pragmatic_realist]

"The sharp change was the clearest sign yet that economic policy in President George W. Bush's second term is going to be led firmly from the White House."

Is reacting impulsively in panic the same as leading firmly?

[K. Rove]

W'ydunno.

If things get really ugly we can always blame the Chinks.

???

[Jennifer]

Dear Brad,

Please note the offensive comment above.

[Kimmitt]

Please note the poster's nom de plume. It's satire.

[Jennifer]

Ethnic slurs are never satire. They are highly offensive.

[Jennifer]

The term used was horrid.

[Jennifer]

This is a precious blog and we must all protect it. A resource to be treasured, and comments must be humane as Brad is always humane.

[Ari]

Dear Brad

Should you have time to look at comments today, please notice the racial insult posted above that Jennifer pointed to.

[Ari]

Jennifer, of course you are right. There is never a place for racist language.

[Josiah Bartlett]

Who will the White House "brain trust" point their fingers at when these geniuses pull the eco/political boner that causes the dollar to fall, the stock market crashes, interest rates skyrocket and there is no-one at Treasury with either the brainpower or credibility to help them out?

[derrida derider]

Jennifer et al - don't be such prudes. "Chink" is indeed a horrid term to use about someone, but the letters do not form a mystical ideogram that raises the devil. If I impute David Duke talking about 'nigras' I am insulting David Duke, not African-Americans. Similarly, "K. Rove" was insulting the president's new economic guru, not Chinese people.

[Randall]

Derrida Derider

Racist langauge is thoroughly offensive. Defending such language as a satire or calling those who object to such language "prudes" is discouraging and wrong. The term is offensive to me and my family, and should not have been used and should not be defended and Jennifer are Ari are to be appreciated for decrying the use. I can respect your comments and know you mean well, but you are wrong and should never use such terms.