Geithner tells Congress: calling China names doesn’t get you anywhere
U.S. lawmakers are mad and want Treasury Secretary Timothy Geithner to step in and call China a name — “currency manipulator” — which may not sound like much on city streets but can be quite an insult in world financial circles.
“At a time when the U.S. economy is trying to pick itself up off the ground, China’s currency manipulation is like a boot to the throat of our recovery. This administration refuses to try and take that boot off our neck.” That’s not a Republican raging against President Barack Obama’s Treasury Secretary, it’s Senator Charles Schumer, a Democrat from New York (where Wall Street happens to be located).
“Mr. Secretary, although there may be some modest disagreement about what to do, I’m increasingly coming to the view that the only person in this room who believes that China is not manipulating its currency is you,” Schumer said.
The New York senator, never one to hold back when it comes to words, let loose on Geithner at a Senate Banking Committee hearing on China’s exchange rate policies which are a source of friction with the United States.
“What is the administration so afraid of? You know we are right. You know the United States is put at a terrible disadvantage and you refuse to act. What are you afraid of?” Schumer bellowed.
They were about the loudest fireworks to emerge from a hearing that was fairly drama-free given the controversial subject matter. Especially since Geithner has come under general fire from Republicans and other Obama critics over the struggling economy with some even calling for his ouster.
It is within the powers of the Treasury Department to declare China a “currency manipulator” in its next foreign exchange report due on Oct. 15 — which is what lawmakers want. But Geithner, without tipping his hand on what the semi-annual report would conclude about China’s currency tactics, said it really wouldn’t accomplish anything to pin such a label on Beijing.
“The only thing that I would observe is, wishing something does not make it so, and issuing a report that requires me to go consult changes nothing,” Geithner said.
Photo credit: Reuters/Kevin Lamarque (Geithner testifies at Senate hearing on China exchange rate policies)