The High Dollar: President Clinton's Unaffordable Tax CutYes, he squarely (and deservedly) fingers Rubinomics for this key leading element in the protracted jobster immiseration process we call post-industrialization.
By Dean BakerEveryone knows about George W. Bush's unaffordable tax cuts, the big tax breaks that gave millions to millionaires and billions to billionaires, but few people are aware of the even more unaffordable tax cut from the Clinton administration. That is because President Clinton's tax cut took a somewhat different form: an over-valued dollar....
Clinton did not start his administration with a high dollar policy. Lloyd Bentsen, his first Treasury Secretary, deliberately allowed the dollar to weaken in the first years of the Clinton administration, with the hope of keeping the trade deficit at a manageable level. ...The high dollar policy came into being under Bentsen's replacement, Robert Rubin.
Unfortunately, Baker doesn't really do much serious damage. In fact, his attack reminds me of the Moran gang's drive-by spraying of the Capone luncheon eatery. But read it anyway; stuff on this is so rare in the media, and hey, it's short. Then come back and I'll try to hit what Dean missed.
What, back already? That was quick. Okay. Number one: the high dollar means the strangulation of industrial America. The high finance boys have nothing against factories in the heartland paying living wages, except that this conflicts with the logic of profit maximization.
Number two: forget the 3 trill foreign debt gag. That's overrated. And forget the nonsense about inflation control (translation: wage control). And yes, imports will cost more if the dollar goes to where trade is in balance. But Dean misses the correct focus: this is a systemic problem -- all "north" currencies, all currencies of advanced industrial, soon to be post-industrial nations, are wildly overvalued against the currencies of the "emerging industrial nations." In fact, looked at dynamically, it's the euro zone that right now seems headed for the greatest squeezeout of decent jobs.
At any rate take this to the bank from both Dean and me: the war on good jobs is producing zillions more totally unnecessary "job casualties" 'round the globe than any one "respectable" seems willing to acknowledge. It makes the on going Iraqistani great caliphate suppression look like the Circus Maximus it is.
