India was one of President Obama's few friends on Asia tour

This article appeared in the Patriot News, Nov. 19, 2010.

President Obama went to Asia recently. He said this was a “jobs tour” and that he was going to drum up business for American companies. He began with a stop in India.

Soon there was talk of India buying several aircraft from Boeing. Obama pleased his hosts by stating that he would support India’s bid for permanent membership on the U.N. Security Council.

He knows this is a long shot. China, with its veto power, would almost certainly block the bid. Some Indian commentators also noted this was an empty promise, but it didn’t matter. By implying that India was ready to play a more prominent role in global affairs, Obama had elevated India’s status.

And then it was on to various other countries: Indonesia (where he went to school as a boy), South Korea (where he attended the G20 summit), and Japan (another summit, this one by APEC).

But the reaction in these countries, following the warm hospitality he received in India, was far less cordial. In particular, the U.S. policy of quantitative easing (which the Federal Reserve recently announced) came in for harsh criticism.

The problem, from the critics’ point of view, was that the Fed’s policy was likely to lower the value of the dollar and provide a stimulant to U.S. exports to other countries. But a lower value for the dollar would mean a stronger euro and a stronger yen, which in turn would likely crimp exports from Europe and Japan.

Further, wasn’t America being hypocritical? It was constantly accusing China of deliberately maintaining an undervalued yuan, and here it was seeking to drive its own currency down to boost economic growth at home.

President Obama defended the Fed’s action. He noted that the quantitative easing policy, which seeks to lower long-term interest rates through purchases of government bonds, was not intended to weaken the dollar. The purpose, rather, was to encourage lending by banks to businesses and consumers and thus jump-start growth.

But the argument largely fell on deaf ears. As country after country took the U.S. to task, one country came to the defense of the beleaguered president. The Indian prime minister, who holds a Ph.D. in economics, said the U.S. policy promised to be helpful to the global economy. Any uptick in the American economy, he noted, would boost U.S. demand for imported goods, and thus benefit other nations.

While this exchange might have improved relations between India and the U.S., a subsequent visit to India by another noted American appears to have ruffled a few feathers. Pamela Anderson, during her recent stay in India, took pen to paper and wrote an impassioned plea to the prime minister, asking him to discourage the use of leather in the country.

Anderson, a vocal supporter of PETA, no doubt has laudable intentions and enviable penmanship. But her activist stance threatens to undo the diplomatic overtures of the president. If India were to join Germany and Japan in criticizing the U.S. for its quantitative easing, well, we know whom to blame.

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