King Dollar and America's Exceptionalism
by Tom Donelson on December 6, 2010 at 10:09 AM
The economy is always a key issue in any national campaign but economy is more than just about jobs but about other factors that lead to job creation. The recent debate over the role of the Federal Reserve in our economy as the Federal Reserve attempts to inflate the economy to stimulate enough economic growth to produce significant employments.
The next battle is the attempt by some in Congress to overturn the 1977 Humphreys-Hawkins bill which directs the Federal Reserve to combat inflation and produced job growth simultaneously. Led by Representative Mike Pence and Senator Bob Corker, there is a movement to simply put the Federal Reserve in charge of dealing with inflation. This move is directed at the Federal Reserve plan at pump priming, but it does have another objective.
For the past year, the Obama administration attempted to use the weak dollar as a means to produce economic growth by making American goods cheaper abroad. Many of our trading partners viewed this as a currency war directed at them since the dollar is the main currency world wide. They fear reckless Washington policies may bring down their own economy.
The recent move by China and Russia to use their own currency for trade between their countries is the beginning of the retreat from King Dollar and for many; the move to replace the Dollar as the international currency has two goals. The first is to protect them from the absurdity of Obamanomics and the second, to reduce American power worldwide.
King Dollar reflected the American role as the premier economic power as well as the military power but with American running up debts and the weakening of the American economy, this shows that America’s role in the world is not just dependent upon its military strength but its economic strength. America’s economic strength is being drained by deficits and new commitments to new social programs like Obamacare. Obama’s America is no longer feared nor respected.
A move toward a strong dollar is not just an economic issue but a foreign policy issue as America’s strength is based on its economic predominance and a strong dollar is a reflection upon sound economic policy. Reagan years were marked by a strong dollar, low taxes, reduced regulation and a job creating machine that was the America’s economy.
Part of the battle over the dollar is not just about reining in future inflation but to restore America’s place in the world, both economically and militarily. Proponents of a strong dollar are making the case for America’s dollar to become the king of the world economic order. Do we want a world dominated by China both militarily and economically or a center of nations including Russia, China, Brazil and India dictating the world fortune and not just economically?
In the Reagan’s era, America was the world leader for the free world and the connection between its economic power and military power defeated the Soviet Empire. The connection between the strength of American currency and its world standing is based on what has happened over the past five decades. In the 1970’s, America appeared on the retreat as its economy was roiled by high inflation and high unemployment while the Soviet Empire was on the march in Africa, Southeast Asia and Central America. A weak dollar meant a weak America.
The anti-inflation goal of Pence-Corker to reduce the role of the Federal Reserve is the first battle of restoring America’s place in the American economy. King Dollar translates into America Exceptionalism.