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Psst! Ben Bernanke is a Chinese Mole
Why is there so much keening and wailing on the right over the decline of the dollar, a technical issue that virtually every economist agrees is (a) inevitable (b) good for America? Apparently the answer is Matt Drudge, who now writes about the weak dollar about as frequently as he writes about hurricanes during storm season. Eamon Javers at Politico:
Clearly, Matt Drudge has developed a fascination with the declining U.S. dollar. “He’s fixated on it,” said Tom Rosenstiel, director of the Pew Research Center’s Project for Excellence in Journalism. “There’s no question that Drudge can alter what people are paying attention to.”
This comes via Dan Drezner, who points out both the obvious (a weak dollar is a positive development, not a negative one) and the slightly less obvious (perennial worries that the dollar is losing its status as a global reserve currency are mostly absurd). Then he puts on his blogging cap:
So, what's really going on here? I suspect that with the Dow Jones going back over 10,000, Republicans are looking for some other Very Simple Metric that shows Obama Stinks. The dollar looks like it's going to be declining for a while, so why not that? Never mind that the dollar was even weaker during the George W. Bush era — they want people to focus on the here and now.
This is helped considerably by the fact that upwards of 98% of the country hasn't the slightest idea of what a "weak" dollar is aside from the fact that "weak" doesn't sound very appealing, and upwards of 99% hasn't the slightest idea of what a reserve currency is or why it matters. This makes it excellent fodder for Trilateral Commission style conspiracy theorizing,1 which in turn makes it excellent fodder for the current intellectual leaders of the conservative movement. This is the kind of stuff that used to be limited to cranks with mimeograph machines but is now beamed into millions of homes via the wonders of cable TV and the internet. That's progress, my friends.
1Remember back when the Trilateral Commission was running the planet? Good times. How have they managed to fall so low since then?
Um, Kevin, did you really
Um, Kevin, did you really say
"intellectual leaders of the conservative movement?"
Damn, your comic repertoire is expanding at a tremendous rate!
What are you sayin'?
That the Money Party isn't the same thing as the Trilateral Commission? How can you be so sure?
Not new at all
When I was in Australia back in the '80s, the Murdoch paper ("The Australian") ran the current A$ to US$ rate in a box on the front page, labeled "YOUR DOLLAR". Apparently one was supposed to think that this was a day-by-day rating of the government. Is the government making YOUR DOLLAR worth more or not?
No concerns at all?
A lower dollar is certainly helpful in rebalancing but putting aside Drudge inflammatory media stuff it's reasonable to worry that an orderly lowering of the dollar could turn into a rout. It's possible we won't be able manage the currency as carefully as we think we can. It also strikes me as short sighted to assert that "the dollar losing its status as a global reserve currency is mostly absurd." The unwinding of the global imbalances seem pretty treacherous. You have even noted that this is the case in past posts if memory recalls correctly. The unwinding could lead to all sorts of consequences that two years ago would have seemed crazy. The financial crisis is leading us to a new era and I'd be careful to call possible outcomes absurd in such an environment.
I have it on very good
I have it on very good information that George Soros took over the Trilateral Commission in 2002. He was mad that they botched the job on 9/11 (only one tower was supposed to fall).
How will my trust fund ever
How will my trust fund ever pay for that Grand Tour of the Continent with the dollar so ... sob, sob... weak?
[why this sells to the educated masses as well]
Weaker...
Having followed those links (I confess I have but the vaguest understanding of the Drudge phenomena, it seems extraordinary to credit the idea he is influential, but ... if everyone says so...), I can well sympathise as to the critique. But weak dollar is better, more intelligently stated as "weaker."
At some point a weak dollar might well be a problem for the US, although given the US domestic economy - in size and relative internal efficiency - objectively I suggest that this would take quite a degree of weakness. The pious hand-wringing about the impact of US debt on the dollar is not entirely without foundation, but strikes me as mostly pious nonsense at this stage as Euro zone, which is less attractive overall, sustains higher debt-to-GDP ratios. Not the sort of thing one would recommend in the long term, but given the crisis, it's pure illiteracy to be pissing and moaning at this stage.
It's all about trends.
It's all about trends. That's what worries some about the falling dollar. That and putting it into context with the rest of our economic problems.
Can be domestically stressful.
It means imported stuff gets more expensive in local currency terms. Now that is good for changing consumption/production patterns to effect the trade balance, but it is tough on anyone who relys on relatively cheap imports. And our biggest import is oil, now up to $82, after spending months near $70. This will clearly create some inplationary pressure. At the moment inflationary pressure might be a good thing, as deflation is reported pretty dangerous, and we are close to it.
Of course this response to global imbalances was inevitable and necessary. Many economists were expecting the crisis to be a rebalancing/dollar crisis, rather than the financial system meltdown we got instead. Perhaps these are just two sequential crises we are destined to go through.
So, this is a long term response to a long term trend decades in the making. But, I certainly don't think it will be painfree or seamless. It will probably be accompanied by some unexpected bumps.
Haven't you heard? Drudge no longer 'rules their world'.
Now it's that nutcase Glenn Beck who really turns their crank.
The trilateral commission
I get the reference, but didn't the trilateral commision turn into the G8 which is now trhe G20?
I know that the G20 does not run the world, but it seems to me they have an awful lot of power these days. Economists and financiers got the global economy they wanted, and they sure seem to have great influence over Washington.
Does this make me a laRoucher from the left? I hope not.
Tripp
You fools!
The Trilateral Commission has withdrawn to the shadows JUST AS THEY WANTED! We don't HEAR about them pulling the strings, but that DOESN'T MEAN THEY AREN'T! The LESS you hear about them, the MORE worried you should be!! Absence of evidence is not evidence of absence!!!
No, the Trilateral
No, the Trilateral Commission was just a red herring that the Illuminati created to draw attention away from themselves.
Bilderburgers!
The Trilateral Commission may be a front for the Illuminati, but the Illuminati are just dupes of the Bilderburgers -- that's where the real action is.
...a technical issue that
War is peace
Patriot Act is freedom
Wiretapping is privacy
Torture is enhanced questioning
Inflation is good for seniors
I've been thinking it may be time to update Doublespeak with modern examples from Washington, much as dictionaries add new terms that come into common usage.
hmm. Duncan Black spent a
hmm. Duncan Black spent a year or so gloating over the dollar's decline against the Euro a few years back.
Apparently, that's different.
CNN Broadcast
A recent CNN television broadcast gave the impression that Esperanto aims to be a single global language. The comparison was with a global reserve currency, instead of the US dollar.
See http://www.youtube.com/watch?v=ZpC8mPk4QBM
May I put the record straight? Esperanto intends to be an auxiliary language, or a second language for all.
Please see http://www.lernu.net for confirmation.
Oopsie....
American Economists are making money on the falling dollar and so are European Economists, so of course, the falling dollar is "good"----the only ones suffering are those of us left paying $5 for a loaf of bread and looking for a job. Wake up, MOJO---before it is too late.