Barney Frank: “I want to quote from a column earlier this week written by Paul Krugman, who does an extraordinarily good job of…”

“I want to quote from a column earlier this week written by Paul Krugman, who does an extraordinarily good job of presenting the case for a change in our economic policies to deal with the unemployment that plagues not just us, but others in the world. The column is headlined ``Holding China to Account.'' And he begins: ``The dire state of the world economy reflects destructive actions on the part of many players. Still, the fact that so many have behaved badly shouldn't stop us from holding individual bad actors to account.'' And that's what Senate leaders will be doing this week--they did it already, they've begun the process--as they take up legislation that would threaten sanction against China and other currency manipulators. Respectable opinion is aghast, but respectable opinion has been consistently wrong lately, and the currency issue is no exception. China has an enormous trade surplus with the United States, and a significant part of that is due to their conscious intervention to undervalue their currency. Now, that comes, to some extent, at the expense of some in China in terms of the cost of living. On the other hand, it provides employment. There are of course other ways in which China interferes with the free trade to which they supposedly adhered when they were allowed to join the WTO, a move I voted against. They are manipulating the rare- earth situation, restricting exports illegitimately to force companies to come there.…”