The attacks on the use of fiscal policy to stabilise the domestic economies of nations that are still languishing in the aftermath of the financial crisis has moved to a new dimension – a escalation in the attack on China and its stupid policy of managing its currency’s exchange rate. The debate is interesting because it is in fact a reprise of discussions that raged in previous historical periods. Each time there is a prolonged recession, governments start suggesting that the problem lies in the conduct of other governments. There is a call for increasing protection (“trade wars”) or demands for some currency or another to appreciate (“currency wars”). The prolonged recession is always the result of the governments failing to use their fiscal capacity to maintain strong aggregate demand in the face of a collapse in private spending. Typically, this failure reflects the fact that the governments succumb to political from the conservatives and either don’t expand fiscal policy enough or prematurely reign in the fiscal expansion. These episodes have repeatedly occurred in history. And at times, when some “offending” governments have been bullied into a currency appreciation (for example) the desired effects are not realised and a host of unintended and undesirable outcomes emerge. This debate is another example of the way mainstream economics steers the policy debate down dead-ends and constrains governments from actually implementing effective interventions that generate jobs and get their economies back on the path of stable growth. So the yuan appreciation debate – just another sideshow. I wonder why we bother.