Paul Krugman’s saber-rattling op-ed in today’s New York Times, regarding the yuan, is drawing a sharp reaction from the folks over at The Economist:
And Mr Krugman seems entirely uninterested in the domestic political constraints facing China’s leaders. He doesn’t consider for a second the possibility that a bullying strategy on America’s part might make China less likely to do what the administration wants. Why on earth would a nationalistic nation anxious to establish itself as great power want to come off to all observers as a weakling in the face of American bluster? Mr Krugman would paint China into a corner, forcing them to take steps detrimental to all involved.
The general tone of his column—focused on toughness, insensitive to the internal politics of foreign nations, blind to potential negative outcomes, reckless and impatient—is familiar. It looks like nothing so much as the argumentation deployed by the Bush administration as it rushed to war in Iraq. Mr Krugman was prescient and prudent in fighting back against that misguided policy. He would do well to stop for a moment, take a deep breath, and think again before urging America to “take a stand”, damn the consequences.