Matthew Yglesias » A Land Where Charity Is Illegal

Matthew Yglesias » A Land Where Charity Is Illegal: "Gordon Chang’s account of why China’s new rich are so stingy with their charitable donations is a nice illustration of why:

But an overriding reason explains why charity barely exists in contemporary China: The Communist Party makes giving difficult. Why? The Party wants no competitors, especially organized ones. Charities, therefore, have to find government sponsors before they can register with the Ministry of Civil Affairs, and this requirement severely limits the number of them. Even Hollywood action star Jet Li, a favorite of Beijing because he makes “patriotic” films, cannot register his One Foundation, which may have to suspend operations soon.

Don’t be surprised that as of last year there were, in all of China, only 643 foundations not run by the government. There were an estimated 300,000 so-called grassroots organizations that were operating without registering, or had registered as business enterprises.

Outdated Tariff Systems Means the Poor Pay More « The Washington Independent

Outdated Tariff Systems Means the Poor Pay More « The Washington Independent:

low-income Americans end up paying extra for necessities like clothes and shoes — victims of an outdated, inefficient tariff system that inadvertently penalizes the poor. Even proponents of reform, though, acknowledge that the byzantine nature of the tariff code and the low priority it’s generally assigned by lawmakers makes the prospect of changing this entrenched system unlikely.

Luxury goods have very low tariffs, while cheap clothes, underwear, shoes and household products have much higher rates, said Edward Gresser, trade policy director at the Democratic Leadership Council. “The people who are paying for the tariff system don’t know they’re paying for it,” he said.

“It’s the dirty secret of the U.S. tariff code,” said Daniel Griswold, trade policy expert at the Cato Institute. “It’s our most regressive tax that the federal government imposes.” ...

The disparities are staggering. In his research, Gresser found that the tariff rate on a cashmere sweater is 4 percent; the rate for one made of much cheaper acrylic is 32 percent. A silk brassiere has a tariff rate of less than 3 percent, but the rate on a polyester one is slightly less than 17 percent. The tariff rate on a snakeskin handbag is just over 5 percent but climbs to 16 percent for one made of canvas. Similar variations occur when it comes to household goods. Drinking glasses that cost more than $5 each have a tariff of 3 percent, while those that cost less than 30 cents each have a rate of 28.5 percent. A silk pillowcase has a rate of 4.5 percent; this goes up to nearly 15 percent for one made of polyester.

Overall, clothes and shoes contributed nearly $10 billion in tariff revenue in 2009, while higher-cost items including audiovisual equipment, computers and even cars added less than $2 billion. Gresser contends that the $10 billion is disproportionately borne by people who can’t afford to buy luxury goods.

Globalization has had a similar incidence in labor markets. It has adversely impacted the lowest-wage manufacturing workers and benefited the highest wage people in finance who have been able to sell financial products all over the globe. Whereas highly paid doctors have little competition from globalization, low wage jobs get much more competition from foreign workers (such as via immigration).

Economic Scene - The Long View of Changes in China’s Currency - NYTimes.com

Economic Scene - The Long View of Changes in China’s Currency - NYTimes.com:

"a stronger renminbi would not be a quick fix for our economic problems, as appealing a notion as that might be... The renminbi itself rose 21 percent against the dollar from 2005 to 2008, and the trade deficit continued to widen.

But there is also no question that China’s currency remains undervalued, probably by 20 percent or so. The economics are simple enough. The huge demand for Chinese goods should be driving up the price of its currency, but Beijing has been intervening to prevent that. Getting China to stop will be crucial to correcting the global economy’s imbalances. A stronger renminbi will help China’s people — many of whom are hungry for better living standards, to judge by the recent labor strikes — buy more goods and services, and it will also help the rest of world produce more. But change is not going to happen overnight.

...Chinese officials sometimes go so far as to suggest that the value of the renminbi makes little difference. That’s wrong. ...economies, like battleships, tend to turn slowly. Companies rarely move production in a matter of weeks. If they are using a Chinese supplier, it is often cheaper to stick with that supplier for a while, even if costs rise, rather than find a new one in another country.

Also see the graph of the yuan exchange rate. It fell dramatically in the 80s and 90s and then remained fixed with occasional small adjustments. Also see Paul Krugman's takedown of the Chinese notion that their exchange rate doesn't matter.