During his Senate testimony Tim Geithner said he supported a strong dollar. He also complained that China was "manipulating" its currency by keeping its value down against the dollar. (China has a public exchange rate target, so its not clear how this can be called "manipulation." It is a fixed exchange rate.) The complaint against China implies that Geithner wants a lower-valued dollar which is directly opposite to wanting a strong dollar. As a practical matter, this is about as embarrassing a contradiction on a key policy issue as a Treasury secretary designate can possibly make, but the contradiction completely escaped the notice of the NYT. The article also asserts that: "Mr. Paulson initiated a round of strategic talks with the Chinese and, on his watch, the Chinese allowed the yuan to depreciate nearly 20 percent." Actually, the Chinese allowed the yuan to appreciate by nearly 20 percent.
--Dean Baker
