ANALYSIS/OPINION:
Thank goodness Ronald Reagan isn’t around to see House Speaker John A. Boehner’s determination to smother democracy and block a vote on a strong bill to combat currency manipulation. Mr. Boehner’s rationale for killing the measure - which passed the Senate on Oct. 11 with 16 Republican votes, and enjoys majority support in his chamber - recalls the kind of appeasing, defeatist diplomatic mindset that the Gipper so thoroughly discredited.
Mr. Boehner’s position is no surprise. The Senate bill and its House counterpart grease the skids for imposing tariffs to offset losses inflicted on competitive domestic manufacturers and their employees by artificially cheap currencies such as China’s yuan.
Beijing’s currency undervaluation in particular prices American-based producers out of their home U.S. market, the Chinese market and third-country markets, robbing Americans of valuable growth and jobs. But this exchange-rate protectionism actually benefits U.S. multinational companies that manufacture in China. Coddling such foreign mercantilism, therefore, jibes perfectly with Mr. Boehner’s longstanding enthusiasm for trade policies that have actively encouraged offshoring.
What should trouble Republicans and conservatives in particular, however, about Mr. Boehner’s panda hugging is how violently it clashes with core tenets of Reagan’s basic approach to dealing with major overseas challenges.
The 40th president, after all, repeatedly shocked the diplomatic set by treating American security and prosperity as his top priority, not maintaining the country’s international relationships. Whenever those arrangements weren’t measuring up, he didn’t fear shaking them up or, if necessary, disrupting them.
Unlike many foreign policy establishmentarians, Reagan also realized that America actually and potentially held the world’s best foreign policy cards, and that friend and foe alike recognized its intrinsic strengths. Hence his refusal to sell America short and conviction that street-smart, resolute U.S. leaders could prevail in international negotiation and showdowns. Hence also his focus on maintaining the power to back up this self-confidence.
Finally, Reagan didn’t fall for token concessions or PR ploys, knew when to keep the pressure on and never lapsed into moral equivalence.
Nor was his approach confined to security issues. Reagan boldly employed America’s economic strength to fight predatory foreign trade practices that threatened key U.S. industries such as semiconductors, machine tools and steel.
Today, America’s domestic manufacturing, and by extension its hopes for sustainable economic recovery, are again threatened by foreign trade predation. Mr. Boehner’s response, in the context of a currency bill whose 225 House backers include 61 Republicans?
Although claiming to be “concerned” about China’s practices in particular, and never disputing the harm it’s causing his own country, Mr. Boehner warned, “I think it’s pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency.”
Two days later, Mr. Boehner praised China for achieving “significant improvement” in the yuan’s valuation and then bleated that full congressional passage of the currency bill “could start a trade war.” Worse and more revealing was his response to the observation that such conflicts endanger trade surplus countries such as China much more than the deficit-ridden United States: “I’ve always believed an engagement with them was the right thing for our country and the right thing for the world.”
Right after the bill’s Senate passage, another Boehner trade war warning contained an argument that sounded like Blame America First liberalism: “Given the volatility in the world markets, given the uncertainty in the world economy, for the Congress of the United States to be taking this step at this moment in time poses a very severe risk of a trade war and unintended consequences that could come as a result.”
Mr. Boehner’s failure to propose plausible alternatives made clear his real meaning: A modest American effort to correct China-based threats to the U.S. and world economies’ ongoing woes is more worrisome than China’s distorting practices themselves.
Reaganism’s unbounded faith in America, canny instincts about power, and sensible priorities served the nation, conservatism and the GOP well. Bucking congressional leadership is never easy. But can any House Republican really believe that Reaganism’s apparent polar opposite, Boehnerism, will fare remotely as well?
• Alan Tonelson is a research fellow at the U.S. Business and Industry Council, a national business organization whose nearly 2,000 members are mainly small- and medium-sized domestic manufacturers. Author of “The Race to the Bottom,” Mr. Tonelson also is a contributor to the council’s website, www.AmericanEconomicAlert.org.
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