Strangely, it seems only when not in government any longer can one (in this case Christina Romer, the former chairwoman of the Council of Economic Advisers, now back to civilian life as an economics professor at UC Berkeley)
talk honestly about the U.S. Dollar and stop parroting, automaton-like, the famous party line:
The United States is in favor of a strong dollar.
One can then say reasonable things like:
Strangely, every politician seems to understand that it would be desirable for the dollar to weaken against one particular currency: the Chinese renminbi. For years, China has deliberately accumulated United States Treasury bonds to keep the dollar’s value high in renminbi terms. The United States would export more and grow faster if China allowed the dollar’s price to fall. Congress routinely threatens retaliation if China doesn’t take steps that amount to weakening the dollar.
But in the very next breath, the same members of Congress shout about the importance of a strong dollar. If a decline in its value relative to the renminbi would be beneficial, a fall relative to the currency of many countries would help even more in the current situation.
To say this openly risks being branded not just an extremist but possibly un-American. Perhaps it is time for a more adult conversation. The exchange rate is the purview of market economics, not of the Treasury or strong-dollar ideologues.
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