We've been critical of the Administration's China policy over the past few years, so we're happy to note Treasury Secretary Hank Paulson's successful effort to avoid a trade catastrophe. Last week, on the heels of his highly successful China trip, Paulson persuaded Sens. Smoot Schumer and Hawley Graham -- as Larry Kudlow calls them -- to drop their 27.5% tariff bill. Paulson has not only averted a trade war with relatively little blowback so far from America's anti-trade jingos, but he also appears to have set us on a new, strategic, "generational" course -- as he calls it -- vis-a-vis the Middle Kingdom.
I don't know that we're totally out of the woods on the dollar-yuan currency front, but I'll take the last two weeks of economic policy news. The stock market likes it, too.
-Bret Swanson
