Dear Edukatorz,
Did u c our awesome bill 2 fix US economy? Chinas gonna b soooo pisssed, lulz! BTW r u still down 2 c real steel on fri?
xoxo,
The US Senate
Dear Senate,
While we are of course flattered that you are such fans of our humble blog, we really must insist that you get back to work on actual problems, like unemployment. Since we imagine that’s something of a reach, we’ll at least try and recommend some more constructive reading for you.
We assume your email is expressing self-satisfaction at the passage of Sherrod Brown‘s bill regarding currency manipulation. For those who don’t know, China’s currency is seriously undervalued -meaning their exports are cheaper than they should be – and for years there’s been much political grandstanding in Washington about forcing them to revalue it. Politicians enjoy this kind of bombast because it makes a convenient scapegoat for the failure of the US manufacturing sector and distracts from their inability to make any concerted effort to address the real problems. This means they are more likely to get elected again, which is good for politicians, because then they get to stay on TV and look important.
While China has, in fact, been allowing the value of the yuan to rise, the rhetoric against that nation’s central bank is considered by many to be an excellent distraction from our nation’s myriad economic woes. However, China isn’t very happy about being a scapegoat, and the Senate bill is already proving somewhat counterproductive. Caught up now, readers?
So, Senate, back to you. The Edukatorz have precisely two words for you: Smoot. Hawley. Capish? No, of course you don’t. We understand that Wikipedia has too many big words for your little heads to manage. We’ll try to break it down for you:
In 1929, a bad thing called The Great Depression started in the US, and eventually happened around the world. Stock markets crashed and that ruined all the other sectors of the economy and yes, you guessed it, everyone got very very depressed. And poor. So, in 1930, a Senator named Smoot and a Congressman named Hawley got together and decided it would be a good idea to protect American goods by raising tariffs against everyone else. They were mad about losing money, just like you, and they decided to blame foreigners just like you are blaming China.
Can you guess what happened next? A trade war. That’s what turned a teensy-weensy recession into The Great Depression. And that’s exactly what’s going to happen if you pull this kind of shit with China. And Senator Smoot and Representative Hawley? They lost their re-election campaigns! Think about it.
What’s that? Oh, it’s never getting to the House floor? Well, how do you know that? It’s already a step closer and Boehner’s got a lot of pressure to take it up. Oh, you think the American voter in your manufactures-strong state is going to forgive you when all of a sudden they can’t afford their daughter’s lead-painted Chinese-made Barbie doll for Christmas because you started a trade war? We may be dumb, but we’re not that dumb. And if we’re dumb enough to believe it’s all China’s fault and you’re doing all you can to fix our economy… well, fuck it, I guess in that case we deserve you.
Sincerely,
The Edukatorz
PS – Not going to make Real Steel on Friday, we have a date with Ban Ki-Moon to see Moneyball, and to be honest, we think it’s best for our reputation if we’re not seen with you in public.