How Currency Manipulation Creates American Jobs
Don Boudreaux responds here and here. Here's my response:
1. It's a strange use of the word "manipulate," which means:
a. "To influence or manage shrewdly or deviously."
b. "To tamper with or falsify for personal gain."
In this case the "manipulation" is to America's advantage and China's disadvantage, because the undervalued yuan and overvalued dollar makes Chinese goods cheaper and more affordable for American consumers and companies, saving us billions of dollars, and making us wealthier and China poorer. It would be like accusing Wal-Mart of "manipulation" for offering "Everyday Low Prices," and saving Americans billions of dollars??
2. As the chart above shows, almost 60% of imported goods are: a) industrial supplies (chemicals, commodities, raw materials, etc.) and b) capital goods (machinery, equipment, parts, tools, etc.) which are mostly purchased by AMERICAN COMPANIES as inputs for production in the United States. Being able to purchase Chinese and other foreign inputs at the lowest possible price makes American companies MORE competitive, sell MORE of their products, and hire MORE American workers. Therefore, China's currency "manipulation" helps American companies and actually SAVES and CREATES jobs here.
3. For the artificially cheap consumer goods purchased from China with artificially overvalued dollars, thanks to the "manipulative" Chinese government and Chinese people, those cost savings don't somehow just evaporate or disappear. To the contrary, the money saved most likely gets spent on other goods and services, many of which are produced by American employees working for American companies, stimulating jobs in those sectors.
For example, the $100 saved by an American consumer purchasing artificially cheap Chinese tires, might spend that extra $100 taking his or her family out to dinner more often at local restaurants, helping to save or create jobs in the local restaurant industry. That is, some Americans working in the restaurant industry can thank the manipulative Chinese for their jobs.