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Dear Prudence

By Owen Paine on Wednesday March 7, 2007 04:03 PM


Mother Clinton recently sent a letter to Fed chairman gentle Ben Bernanke, and (irony of ironies) also to that old China handjob, secretary of the Treasury Hank Paulson, registering her grave "concern" over Wall Street's echoing of last week's Shanghai stock market convulsions:

If China or Japan made a decision to decrease their massive holdings of U.S. dollars, there could be a currency crisis and the U.S. would have to raise interest rates and invite conditions for a recession.
Say I started a letter on national security policy like this:
If Russia made a decision to launch its nuclear missles fleet at the US...
...what would most folks think? The move St Hill is suggesting for Japan or China to trigger a dollar crisis, would be equally foolhardy and self-destructive -- and thus hardly plausible.

Then there's the other howler --

the US would have to raise interest rates...
Nothing of the sort would be necessary, and if rates were raised, it would be pretexted by the dollar slide, not caused by it.

But this is all quite airy-fairy. Suffice it to say, if this letter is any indication, St Hill, if she ever returns to the White House, plans to use hysterics as a policy club.

What's the embedded objective here? consider the intro line:

As we have been running trade and budget deficits....
Budget deficits? What's the link here, in a letter about our trade gap? What compulsion is there to yolk these two deficits, trade and fiscal, together? Obviously, the "fiscal budget gap" is the real target here, and what follow-on poison bite lies snaking about in the grass, if St Hill's ilk are empowered prez-wise in '08?

Try something like this on for size: "We must raise your taxes and cut your benefits. Given the terrible twin deficits, it's the only... prudent thing to do."

After all, they are... the nanny party.

Comments (1)


She does this stuff with a slow motion kabuki in formaldehyde that I find particularly grating. Her colleagues, however, really like it.

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