In the mid- to long-term there might be something more important than the war on terror; namely the effort to keep the American economy atop the league standings amidst turbulent times and in the face of the rise of the likes of China. Thus yesterday's post concerning a potential intelligence czar may be less important than today's disturbing news that John Snow is staying on at Treasury. Personally, I was hoping (praying?) for a Republican Robert Rubin, a steadying Wall Street hand who understood the gravity of the likes of the plunge of the dollar. Hey, the lunatic fringe (often the canaries in the mine) are already, according to the Wall Street Journal, talking about our losing our AAA debt rating—a genuinely traumatic occurrence, no matter how far fetched.
The Economist this week (4-10 December) features as cover story "The Disappearing Dollar." Subtitle: "America's Policies Are Putting at Risk the Dollar's Role as the World's Dominant International Currency." I do not pretend to be a macroeconomic expert, but I don't think it takes such an expert to smell the current state of fiscal irresponsibility—perhaps even "recklessness" is merited. I am admittedly not thrilled with the results of the past election. On the other hand, I have no interest, personally or as a citizen, in seeing the other party triumph by default in 2008 because the country is trapped in an economic maelstrom. Among other things, when the economy spirals out of control both parties' remedies tend to be politically shortsighted nostrums that invariably make things worse, not better. It seems to me, then, that 2005 is a good year for modest economic alarmism. And, facts-on-the-ground being facts-on-the-ground, I do dearly hope that the so-far insipid Snowman finds a steel spine & a bushel of resolve under his Christmas tree.
A parting Xmas message from me to our Treasury chair-holder: (1) The debt- and trade-driven plunge of the dollar does matter! (2) We are not so big and thence invulnerable-invincible as to be able to make the world mindlessly dance to our jig forever!