So much for the ’strong dollar’ policy

Steve Benen, Crooks and Liars: Realistically, it’s almost impossible to believe that Bush is some kind of Manchurian President, intentionally screwing up and deliberately undermining the United States. But sometimes, it’s hard not to wonder. Dan Froomkin, for example, did a nice job today describing Bush’s disastrous dollar policy.

President Bush doesn’t talk about the dollar much, but when he does, he’s got exactly one thing to say about it: “We have a strong dollar policy.”

It’s becoming increasingly clear, however, that Bush’s “strong dollar policy” is driving the greenback into the ground.

The dollar is hitting record lows this week amidst fears that the mortgage-market meltdown will spread to other parts of the economy and as the Chinese make noise about moving more of their investments into euros. But it is the underlying dynamics of the American economy — continued massive trade deficits and a whopping national debt — that have put the dollar in such a precarious position.

A true strong dollar policy, aimed at increasing the confidence of international investors, would require Bush to do a bunch of things he doesn’t want to do. For instance, he would have to stop borrowing so much money to fund his tax cuts and his wars. He would need to encourage the Federal Reserve to raise interest rates, rather than depend on it to keep propping up the domestic economy by decreasing them. That sort of thing.

Instead, Bush just offers the strong-dollar line, without specifics, and moves on.

If Bush were a Manchurian President he’d, well, probably do exactly this.

Nobel laureate Joseph E. Stiglitz for Vanity Fair: When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page. ... After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both. ... The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush. (More)