I'm with Joe

Economist Joe Stiglitz has a new op-ed discussing the IMF, global financial imbalances, exchange rates, and U.S. agricultural policy. An excerpt:

US farm subsidies translate into lower global agricultural prices, and thus lower prices for Chinese farmers. By extending its largesse to rich corporate farms, the US may not have intended to harm the world’s poor, but that is the predictable result.

This poses a dilemma for Chinese policymakers. Subsidizing their own farmers would divert money from education, health, and urgently needed development projects. Or China can try to maintain an exchange rate that is slightly lower than it would be otherwise. If the IMF is to be evenhanded, should it criticize America’s farm policies or China’s exchange-rate policies?

Although I disagree with Joe on a wide range of issues, I agree with him about this one. From the standpoint of either world or U.S. social welfare, U.S. agricultural policy is a bigger problem than Chinese exchange-rate policy.