NY Times: How Can Biden Bring Back Manufacturing Jobs? Weaken the Dollar
Critics of a strong currency say it hurts American factory workers by making imports cheap
Only in the upside-down Orwellian world of Fake Economics — where the most basic dynamic of action & reaction is never understood — would the deliberate debasement of the national currency be considered a good thing if it increases exports sold to countries with a stronger currency (hence, theoretically, more manufacturing jobs here). Never mind the real income and wealth diminution of struggling elderly savers; or the decline in purchasing power of already strapped American consumers which such an insane policy would worsen. Those issues can be addressed separately — perhaps with even more money printing and debasement to pay for more welfare schemes.
This is some really crazy shit — the equivalent of Stupid-19 insanity for economics. Let’s analyze and rebut a few lines. Hazmat suits and hip waders on, boys & girls, into Sulzberger’s macroeconomic muck we go.
NYT: President Biden has made reviving American manufacturing a top priority. To deliver, he may first have to deal with something even more fundamental to the U.S. economy: the strength of the dollar.
Rebuttal: The surest way to revive manufacturing (as the pre-Stupid-19 Trump years proved) is through aggressive deregulation, tax cuts, tort reform (lawsuit control), and protective tariffs. Instead, the eggheads want to debase the currency and drive up prices.
NYT: “Dollar overvaluation is the big problem,” said Mike Stumo, chief executive of the Coalition for a Prosperous America, …. Mr. Stumo describes policies that prop up the dollar as a “war on the working class.”
Rebuttal: Mike Stumo is out of touch with reality. We presume, given his title, that his salary and net worth in equities render his family immune to the ravages of a weakening currency. But for “working class” people living paycheck to paycheck with neither guaranteed salary increases nor higher-than-inflation capital gains each year, inflation is deadly. Nothing wages “war on the working class” like rising food and fuel prices. Nothing.
NYT: Mr. Biden has hired a handful of senior economic advisers who are concerned about the dollar’s strength and have explored ways to reduce it.(emphasis added)
Translation: Inflation coupled with stagnant wages is coming. Brilliant!
NYT: At its simplest level, the trade deficit represents a kind of leakage from the U.S. economy: Americans buy more in goods and services from abroad than the rest of the world buys from the United States … If Americans bought more domestically made products and fewer imports, the spending would create jobs for U.S.-based workers.
Rebuttal: But you’re creating another, even more serious problem (inflation, particularly on imported goods) in order to “solve” the import-export “imbalance.” It’s like trying to prevent weight gain by smoking a pack of cigarettes daily in order to tamp down the hunger pangs! Why not just exercise and gradually condition yourself to eat smaller portions? — And why not just maintain a strong currency (consumer purchasing power)and a vibrant manufacturing economy (through business friendly policies, sensible tariffs and, ironically, increased consumer purchasing power).
What most dangerous about this system is the fact that US dollar is already artificially propped-up due to its status as the world’s reserve currency. Worldwide dollar demand actually keeps it the dollar much stronger and more stable than what it would otherwise be. If (((they))) were to start weakening the “strong” dollar, there’s no telling how fast the existing illusion would unravel as investors start dumping them. It’s quite a pickle.
In a perfectly honest monetary system, no government nor Central Bank would be rigging its currency values up or down to achieve this or that economic metric. Ideally, the ratio of debt-free currency to “stuff” (GDP) should be kept relatively constant because the only legitimate functions of currency are to facilitate trade and act as a store of value. In such an honest system, your money should neither depreciate (no theft of citizens) nor appreciate (we don’t want speculative hoarding either) as actual wages and saved wealth increase along with GDP.
Indeed, from 1800 until 1913, wealth increased greatly as prices for clothes and food stayed pretty much constant as neither the state nor the banksters could steal it. But then came “The Fed” (1913); the gradual abandonment of the gold standard (starting in 1933 & ending in 1973); and the post World War II enthronement of “Keynesian” economic gibberish and manipulation on a global scale.
At this advanced stage in society’s mental and moral decline, the monetary error has become so institutionalized that even “educated” business leaders seriously and openly talk about degrading the value of what’s left in our pockets, salaries and bank accounts — as if its good thing for “the working class.” Nuts!
Weak Dollar = Strong Economy
War = Peace
Freedom = Slavery