The Terrible Exchange Rate Gap...

Larry Kudlow, who normally sees brilliance in every aspect of the Bush administration's record, now sees only disaster. Here he is at The Corner:

If Sen. John McCain wants to run as a candidate of change, and if he’s truly interested in distancing himself from President Bush, he should reverse the declining fortunes of the Bush wartime dollar. America’s prestige is on the line...

The falling U.S. greenback has become a symbol of American decline...

Folks are making fun of the dollar. Our enemies around the world are pointing to the unreliable dollar as evidence of American weakness. It’s as though the administration’s neglect of the dollar is “peso-izing” or “Latin-Americanizing” the greenback.

Something must be done to reverse this trend, and McCain is in a good spot to do it. Remember, McCain was a foot soldier in the Reagan revolution. Borrowing a page from the Gipper — who always said a great nation has a strong currency — he should argue on the campaign trail for a dollar surge.

For patriotic reasons alone it is time to reverse the decline of the dollar. A strong dollar should be emblematic of a strong America and a strong defense.

Sen. McCain can bolster his agent-of-change credentials by placing the U.S. dollar front-and-center in his campaign. The time has come to end the dollar’s freefall. The time has come to end the period in which the greenback has become the subject of international ridicule. The time has come to show voters on Wall Street and Main Street that $1,000 gold, $100-plus oil, and a rising inflation rate will not stand.

It is time to get behind King Dollar.

I'm not an economist, but how exactly is McCain supposed to do this? And if American prestige is on decline, I can think of a dozen more credible reasons for this than the weakness of the dollar (which is not exactly a new phenomenon).

And how exactly is a strong dollar "emblematic" of  "a strong defense"? One imagines the scene...Terrorist A: "Shouldn't we think about bombing America?" Terrorist B: "Can't be done. Dollar's too strong..."

Comments

Yup, it's pure dim-witted bombast. Bad decisions from JFK onwards (or FDR, or Hoover, or Wilson, or Andrew Jackson) have got them into the soup. I'd nominate LBJ and Nixon as the prime sources of the trouble, and Greenspan as the final means. LBJ made three horrible decisions: (1) to expand JFK's Vietnam War into a big, big money-consumer, while (2) erecting a ludicrously extravagant welfare state, and (3) not raising taxes to pay for them. Nixon had the choice of correcting things or accommodating to the errors. He chose the latter and cut the dollar's link to gold. Everything thereafter was an accident waiting to happen, and it happened on the watch of those two prize baby-boomer duds, Clinton and W, with the aforesaid Mr Magoo as the means. Kudlow is a chump.