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Obama Appeasement of China, Japan Wrecking Recovery

Other Asia governments, most recently Japan, have adopted similar currency strategies to boost exports. For example, the jump in the value of the dollar against the yen gives Toyota (TM - Get Report)at least a $2000 advantage pricing of the Camry against the Ford (F - Get Report) Fusion. That may not show up in the list price but it gives Toyota's importing arm in the U.S. the latitude to pack cars with better features and more aggressively discount.

No surprise the trade gap with Japan is up about 350% since the economic recovery began, and the full brunt of the cheap yen policy is yet to be seen.

Economists across the ideological and political spectrum have offered strategies to combat predatory currency policy and force China and others to abandon mercantilism. However, China, Japan and others, offering only token gestures and deflecting rhetoric, exploit President Obama's weakness on economic issues -- the Obama policy of appeasement is wrecking the U.S. recovery.

Cutting the trade deficit by $300 billion, through domestic energy development and conservation, and forcing China and others' hands on protectionism would increase GDP by about $500 billion a year and create well more than 4 million jobs.


Cutting the trade deficit in half would raise long-term U.S. economic growth by one to two percentage points a year. But for the trade deficits of the Bush and Obama years, U.S. GDP would be 10% to 20% greater than today, and unemployment and budget deficits not much of a problem.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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