I Feel Your Pain Senator

Bernanke expresses sympathy with senators frustrated over China's currency policy, then tries to convince them that legislation imposing tariffs on Chinese goods "is not a good idea":

Bernanke Breaks With Greenspan, Sympathizes With China Critics, Bloomberg: Lawmakers frustrated over China's trade policies got something from Federal Reserve Chairman Ben S. Bernanke they seldom received from predecessor Alan Greenspan: sympathy. Bernanke told the Senate Banking Committee yesterday that he appreciates the ''frustration'' of legislators trying to push China into allowing greater fluctuations in its currency. In response to a question from Democrat Charles Schumer, who is seeking tariffs against Chinese goods entering the U.S., he said China may be delaying change partly to benefit its exporters.

''It is important to make sure that trade that takes place is done on a fair and open basis,'' Bernanke told the House Financial Services Committee ... China should ''respect our intellectual property so that we receive the appropriate compensation.'' That's the sort of language lawmakers seldom heard from Greenspan, who had a consistent message during his tenure: Unfettered capitalism and trade are good ..., and policy makers need patience while China adopts a market-based currency.

Bernanke's different line ''was a really interesting nuance,'' said Jared Bernstein, senior economist at the Economic Policy Institute, a Washington think-tank partially funded by labor groups. While Bernanke ''is a dyed-in-the-wool free trader, he recognizes that some folks are not playing as fair as they ought to be,'' Bernstein said. ...' Bernanke ''is quite sensitive to the idea that when you open a market to free trade, yes, the pie gets bigger, but that doesn't mean everybody gets a bigger slice,'' said Robert H. Frank, an economist at Cornell University...

Bernanke spoke out on protectionism, saying at the Senate hearing that ''it is not a good idea to break down some of the gains we've made in terms of free and open trade.'' On China's currency policy, Bernanke was blunt about the need for change. ''China ought to move toward a more flexible exchange rate,'' he told Schumer, a New York Democrat. ''He was very direct,'' Schumer said in an e-mail in response to questions. ''When I asked him about China, he said he was frustrated, too.'' ...