Retrospective

The dollar is not what it used to be. Over the past three years it has fallen by 35% against the euro and by 24% against the yen. But its latest slide is merely a symptom of a worse malaise: the global financial system is under great strain. America has habits that are inappropriate, to say the least, for the guardian of the world's main reserve currency: rampant government borrowing, furious consumer spending and a current-account deficit big enough to have bankrupted any other country some time ago. This makes a dollar devaluation inevitable, not least because it becomes a seemingly attractive option for the leaders of a heavily indebted America. Policymakers now seem to be talking the dollar down. Yet this is a dangerous game. Why would anybody want to invest in a currency that will almost certainly depreciate?

[Emphasis mine]
--The Economist - December 2, 2004 (clipped by me on 12/7/04)

Let's keep hope alive

Ah, the cruise life. For lunch, I had sushi, wiener schnitzel, Szechwan shrimp, sauteed potatoes, zucchini, and grilled bell peppers. And three hours later, I was starving. All I had done in the meantime had been on a panel that examined the 2004 election. The highlight of that session came when columnist Robert Scheer noted that things might not be as bad as some of the folks in the 500-person audience feared. Not that he believed George W. Bush was not plotting to do harm to real American values. But Scheer voiced optimism that enough Americans would share his common sense--and ours--and come to see Bush as a danger to the economy, to America's standing in the world, and to the globe. His argument in a nutshell: the Bush agenda and the GOP coalition is just not sustainable, and Americans--commoners and members of the elite--who realize that will soon form a majority. Maybe, I countered, but at the same time the GOP has been quite good the past forty years at keeping a coalition that ought to crack up together. It combines both well-to-do types who want a tax break and less regulation on businesses (including those that pollute) with people who yearn for creationism in schools and a ban on all things gay (including marriage). It brings together moralists with corporatists, and the interests of these groups are not always the same. (For instance, some conservative moralists joined with progressives to attack the FCC and its chairman, Michael Powell, on rules that would permit greater corporate media concentration.) And, I asked Scheer, what makes you think this well-practiced GOP strategy is going to bust up now? But, to his credit, he was looking to be less-than-dour before a crowd that was alarmed and worried (some would even say panicked). So, indeed, let's keep hope alive--especially while the bar is open,

[Emphasis mine again]

--David Corn [link no longer working]

--the BB