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It takes some gall, is all we can say, for Secretary of Treasury Geithner to vow that the United States would never follow a strategy to weaken the United States dollar. Yet that is the vow he made, according to the Agence France Press, reporting on his remarks at a conference in New York organized by the Council on Foreign Relations. “We will never embrace a strategy to weaken the dollar,” the AFP quoted him saying.
He made that statement as the value of the greenback was lurking below a 1,500th of an ounce of gold after a dizzying plunge in the years since the Democrats acceded to the control of the Congress in 2007 and President Obama to the presidency in 2008. How can a treasury secretary claim after such a plunge that the government hasn’t been pursuing a policy to weaken the dollar? What in the world is he talking about?
Well, it turns out that he is measuring the value of the dollar compared to other currencies. Even then, the dollar has been anything but strong. Compared to a basket of currencies held by its major trading partners, the AFP reports, it has lost 6.5% of its value in this year alone. But comparing the strength of the dollar to other currencies would be like saying that your airplane didn’t crash when it smacked into the ground because you were still roughly even with the person seated across the aisle.
The fact is that the dollar has collapsed, and it is having a devasting impact on all Americans. Our gasoline is above $4 a gallon, our groceries are taking a bigger slice of our household budgets, we can’t sell our houses, and banks aren’t lending. Who would borrow, who would lend when no one but God can know what the dollar will be worth a few years hence? It could plunge further, it could begin to recover. Interest rates are set at the whim of government bureaucrats who are bound by no legal definition of the dollar.
Our own conviction here is that the American people are a lot of things, but one of the things they are not is stupid. They know the United States dollar is not strong. They know how far their money is not going. What Mr. Geitner’s gall reflects is the fact that there are those who see advantages to a weak dollar. President Obama himself is not immune to them, as he made clear in his famous interview in 2007 with the editors of the Sentinel newspaper at Keene, New Hampshire. We linked to a film clip of Mr. Obama’s remarks in our editorial $1,500 Gold. What this means is that for this issue to be brought into focus there is an opportunity for leadership, an opportunity for those Republicans who are prepared to step up.