To the Editor:
The actions President Obama has taken in the first days of his office reinforce our audacity to hope that much needed change will take place to restore America’s historic place in the world.
But the nomination of Timothy Geithner as the new treasury secretary and the statement Geithner submitted in his pre-confirmation hearing about China’s alleged currency manipulation is deeply troubling.
First of all, it’s hard to see how the old accusation, regardless of validity, will solve America’s current economic ills.
Geithner will not be able to explain how the exchange rate of renminbi to the dollar caused the creation of the sub-prime mortgages and naked derivatives, the mess responsible for the collapse of Wall Street.
Since the U.S. pressured China off the peg to the dollar, the yuan has appreciated about 20 percent. The appreciation did not materially alter the economic balance between the two countries and to assume further appreciation will have any impact on the current mess would be shockingly naïve.
To pull out of the “worst economic crisis since the Depression” (Obama’s words), Geithner needs the courage to explain to the Congress and the American people that we need China’s cooperation rather than enmity.
The road to economic recovery will be long and uphill all the way. It will be up to Geithner and the rest of Obama’s economic team to focus on the real issues in order to successfully get to the end of the road.
To dilute their attention and energy on bogus issues because of domestic politics will surely be disastrous for America.
— Dr. George Koo, San Jose, Calif.