King Dollar...Submitted by jorlowitz on Sat, 10/20/2007 - 16:24
Lawrence Kudlow of Kudlow and Kramer fame posted this article about re-throning the American Dollar. Aftering hearing Ron Paul talk with such candor and seriousness about the our currency, it's not what you'd expect:
Kudlow begins by blindly passing the buck:
"In other words, the dollar hasn't slumped because it is necessarily weak, but because the new euro and new market economies are so strong."
He then promotes his PLAN to RETHRONE the dollar... more fed and government intervention:
"Although I have never been an advocate of currency intervention by governments, there are moments in market history when unexpected interventions have worked. Clinton Treasury man Robert Rubin, a canny trader from his Wall Street days at Goldman Sachs, undertook a few interventions to buy and support the dollar in the mid-1990s. He sent a signal to currency traders, and it worked. During those years, the Greenspan Fed generally maintained firm control over the creation of new dollars. So, with a restrained money supply, the Treasury dollar-buying actions proved very effective.... a few strong words from Paulson, coupled with a few well-timed rounds of dollar-buying, could turn the U.S. currency story around."
Finally, to add insult where no more was needed, he invokes the Gipper:
"Ronald Reagan stated frequently that a great country should have a reliable currency. And it was the pro-growth tax cuts and counter-inflationary money of the Reagan era that ultimately reversed a 15-year dollar decline. In President Clinton's second term, a similar policy was undertaken, and a dollar slide that began in the late 1980s under Papa Bush was reversed."
When all is said and done, Kudlow promotes a fairly lame and unreliable policy tweak rather than the kind of systematic overhaul RP has proposed. It makes one wonder whether we really want our currency to be King, or if we'd rather just have our republic back.