Is Obama Copying Trump?

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

Maybe the main speaker at the spring meeting of the International Monetary Fund ought to be Donald Trump. The reason we offer the suggestion is that just as the IMF begins its parley in Washington this week, the London Financial Times is out with a front page headline that says: “Lew urges IMF to get tough on exchange rate manipulators.” We almost fell into our corn flakes. Has President Obama’s treasury secretary, Jacob Lew, just signed on to Team Trump?

If The Donald has made one point over and over again, after all, it is that he intends to go after currency manipulators. As far back as November, he promised, as Politico’s headline put it, “to declare China a currency manipulator on Day One.” Now comes Mr. Lew, calling on the IMF to, as the Financial Times put it, “play a more aggressive role in policing exchange rate fluctuations, global imbalances and its members’ failure to live up to commitments to boost ailing global demand.”

The FT is reporting on remarks Mr. Lew made this week to the Council on Foreign Relations in New York. The secretary, the FT reports, called for “‘new players’ such as the China-backed Asian Infrastructure Investment Bank to live up to the standards set by established institutions such as the IMF and the World Bank.” When we read Mr. Lew’s speech, though, it struck us as thin gruel. If the aim is to confront communist China on the games it plays, Mr. Trump is putting things into much sharper relief.

The Trump campaign Web site vows that a President Trump would bring china to the bargaining table by “immediately declaring it a currency manipulator.” It would also get tough on what it characterizes as “illegal export subsidies and lax labor and environmental standards.” Or, as donaldjtrump.com puts it, “No more sweatshops or pollution havens stealing jobs from American workers.” Trumpism would also lower the corporate tax rate here “to keep American companies and jobs here at home.”

It’s not our purpose here to endorse all aspects of Mr. Trump’s plan, which has a protectionist streak that we don’t share. Rather it’s to mark that the similarities between what the current President’s treasury secretary is telling the striped pants set at the Council on Foreign Relations and what is being said by the same Donald Trump they all insist is an ignoramus. It strikes us that Mr. Trump is way ahead of where Mr. Lew is going (and where Hillary Clinton, an Obama aide until now, can be expected to go).

Our own view is different. We don’t oppose opening up some of these questions with the Chinese camarilla, but the negotiations that we would make a priority are those between the next president and the next United States Congress. The House and growing numbers of Senators have woken up to the need for monetary reform, and are eying fiat money as the root cause our economy’s underperformance — on growth and jobs. How can we make progress with the Chinese communists if we can’t fix our own dollar?

The stage has been set for this in the current congress, in which the House passed the Fed Oversight Reform and Modernization Act. The bill is now with the Banking Committee in the Senate. The Republican candidate with the best handle on this is Senator Cruz, who has publicly called for a restoration of sound money backed by something real, ideally, in his view (and ours), gold. That would restore some legitimacy to the IMF, too, incidentally, which never made much sense in the age of fiat money.


The New York Sun

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