There is a disturbing trend under way in Washington these days where politicians threaten Draconian action as a "stick" to coerce a result they desire. They do this even while they acknowledge that swinging the stick won't solve the problem it purports to address and most likely will exacerbate it and lead to undesirable consequences. They typically justify their use of provocative and extreme threats as the only means available to rectify a situation they characterize as a pending "crisis" or a "systemic meltdown."

The most recent instance that comes to mind immediately is levying huge protectionist tariffs on selected trading partners (China) to stifle their exports into the United States and to coerce them into artificially altering the value of their currency. It is an extremely dangerous stratagem to impose a protectionist tariff on China just because some people believe we are importing too many Chinese goods and would like to coerce the Chinese government into cutting their currency free of its link to the dollar. For example,  Sen. Charles Schumer, D-N.Y., has introduced a bill to hit all Chinese imports with a 27.5 percent protectionist tariff, which is co-sponsored by the Democratic Senate Leader Harry Reid, (D-Nev.) and the junior senator from New York, Hillary Clinton (D-NY).

Red flags are raised immediately by the way supporters of smacking China in the face with a huge protective tariff mangle the English language to distort reality. Schumer is fond of calling his bill a "tough-love effort" to force the Chinese to "stop playing games with their currency." Similarly, other senators supporting the legislation insist it is crafted to pressure the Chinese into "ending their currency manipulation."

How can one rightly call anchoring a nation's currency to the dollar, as China does, "playing games" or "manipulating" their currency? Was it "currency manipulation" under the Bretton Woods international monetary system when the value of the dollar was fixed at a specific weight of gold and the value of foreign currencies then fixed to the dollar? It may be the best policy or the worst possible policy (I happen to think it was one of the best) but it certainly isn't "manipulative." There is substantial professional opinion among economists that a nation can effectively stabilize the value of its currency (especially if it isn't widely traded) and de-politicize its monetary policy by linking it to a strong foreign currency like the dollar or the euro.