After having cooperated to an unprecedented degree -- on stimulus spending and new bank rules, for instance -- to avoid a global meltdown these past two years, the world's major economies now appear ready to turn on one another with truly self-destructive vengeance. Poorly informed Americans are increasingly convinced that free trade pacts -- and not our uniquely high corporate tax rates -- are responsible for sending jobs overseas, and they want to see China punished with tariffs on its imports for its undervalued currency. With China's neighbors intervening heavily to keep their own currencies from rising too high in response, global chatter about the unfolding "currency war" has reached a fever pitch. Is this any way to manage a tenuous global economic recovery?
Read the entire column at World Politics Review.
Monday, October 11, 2010 at 10:02AM 
Reader Comments (3)
Delighted to see you provide wise world strategy advice to Obama. If he does not take a world leadership tact soon, I look forward to your strategic advice on how and what we should do next.
Read the column, sharp analysis. It's frustrating to see how dependent the world economy has become on the functioning of state capitalism, which in its definition cannot be successful in the long run. Part of the blame should be put on Western industrialized populations too though, for not questioning their governments about such skewed trade relations and simply accepting ultra-cheap consumer goods as a state of permanence. People in rich countries are definitely not aware enough of the long-term problems created by state interventions in international and foreign exchange markets....
The solution is to abolish corporate tax rates altogether. I would leave it at that. However, a compromise would be to up the consumption taxes and capital gains taxes (even if the capital gains tax is double taxation anyway), because at least the will be no "shell game" on taxing "greedy corporations," which gets passed to the consumer, worker, or shareholder.
What I resent is that this thought somehow is viewed as a "free market conservative" idea when it is simply common sense. Certainly, in a monopoly market, the dynamics change....but most monopolies are at the behest of government anyway...