Usually journalists are in the position of being told that they have lamentably "oversimplified" or "hyped" their discussion of topics -- and told this by the real policy experts in academia or think tanks or specialized government agencies. Often enough, the accusation is true. Part of journalism's basic function is to explain, in simpler (and often necessarily less nuanced) terms, what the real experts are trying to say. If they do that well enough, they can reach people who would never sit still for the full, rococo, expert version and give them a better understanding of important ideas and problems than they would otherwise have.
But now we've got a situation where a journalist (moi-meme) is listening to a renowned expert and wondering, Can he possibly believe that things are as simple and bald as what he's just said?
The expert in question is our old friend Timothy Geithner, who when he was not being grilled about his tax problems today was saying (in his written answer to questions) that China is "manipulating" its currency. Oh my. Where do we start with this.
- That the Chinese government manages the value of the RMB against the US dollar and other currencies is not an accusation but an observation of universally-accepted plain fact. Until about three years ago, the RMB's value was flat-out pegged against that of the dollar, at a rate of just over 8:1. Was that "manipulation"? Yes, in the same sense that the yen was for years "manipulated" at a steady rate against the dollar, or perhaps in the sense that the US "manipulates" its national borders by controlling them. Here's the basic pattern of the dollar's value against the RMB from mid-2003 to mid 2008 (via Yahoo Finance), with the big change to a "managed float" happening in the middle of 2005. It went from more than 8 RMB to a dollar, to less than 7, during this period:
(Update note: There is no Y-axis scale on the left side of this chart, because I couldn't find a chart with a scale at the time. But as noted above, the chart shows a decline from about 8.2 RMB/$1 to about 6.8/1 -- so the dollar lost about 1/5th of its value against the RMB, not 90% as this truncated chart might suggest. Still, the main point is the change from the absolute peg of the pre-2005 years to the managed float since then.)