I know that I shouldn't waste time beating up on Thomas Friedman, but hey, it's fun. Today he is back in classic Thomas Friedman form, drafting the memo (Times select) that Nancy Pelosi should send to China's President Hu Jintao. Speaker Pelosi's memo begins with some incoherent commitments on energy efficiency: "First, China has committed to a 20 percent reduction in energy consumption for every 1 percent of G.D.P. growth by 2010." This one requires a very big "huh?" But the really good part is the economic bargain. Ms. Pelosi goes on to propose that Mr. Hu invest his trillion dollars of foreign exchange reserves in U.S. factories devoted to green power technologies. She then tells Mr. Hu that the United States has some great engineers who can design cleaner motorcycle engines for China. Now, let's all draft Mr. Hu's memo responding to Ms. Pelosi's note. Dear Speaker Pelosi: First, my congratulations on your victory in the November elections. While I share your desire to increase energy efficiency, I am afraid that I don't understand the targets described in your note, therefore I am not in a position to respond to your proposals on this issue. As far as your suggestion that I invest $1 trillion in factories producing clean technologies in the midwest, I have to remind you that production costs are far lower here in China. That is why so much of your industry has been moving here over the last decade. Insofar as we choose to develop these technologies, clearly China would be the lowest cost location in which to manufacture the products. While I am glad to hear that the United States has engineers who know how to produce cleaner motorcycle engines, China also has such engineers. In fact, we are producing engineers at a faster rate than the United States and they work for much lower wages. So, I appreciate your suggestions, but I think that we will be pursuing other options for the moment. Best Regards, President Hu
-- Dean Baker
