Strong Dollar/Weak Dollar

The dol­lar is weak! Pres­i­dent X’s poli­cies have weak­ened the dol­lar! We need a strong dol­lar, a dol­lar with vigor and health!

Polit­i­cal debates about money are never just about money. Money is cen­tral to who we are. We buy things that express out taste, out polit­i­cal beliefs, our “lifestyle choices,” and these things con­fer sta­tus in the imag­i­na­tion and in the eyes of oth­ers. So debates about money are never just about money; they’re always debates about other anxieties.

Just to review, “weak” and “strong” are used to describe the dol­lar in com­par­i­son to other cur­ren­cies. Con­sider dol­lars vs British pounds. Right now the dol­lar is “weak,” which means it takes a lot of dol­lars to buy a British pound. If the dol­lar was “strong.” It would take fewer dol­lars to buy a British pound.

It’s inter­est­ing lan­guage. It sets up all sorts of anx­i­eties about national decline. For exam­ple, this site, wor­ry­ing that the dol­lar is about to become “the world’s weak­est cur­rency.” It sug­gests the dol­lar as a puny beach-goer, sit­ting help­lessly as inter­na­tional bul­lies kick sand at it. A weak dol­lar lacks the strength to do what needs to be done!

Weak” and “strong” in dol­lar terms emerged in dis­cus­sions of inter­na­tional trade, and so they’ve always been asso­ci­ated with  empire and nation rank­ing. You can find many exam­ples claim­ing that “weak cur­rency” caused the fall of the Roman Empire. Here’s a video on the same sub­ject. A weak dol­lar equals national weak­ness. Who would want a weak dol­lar when they could have a strong doller? The dan­ger of weak cur­rency played a promi­nent role in the think­ing of peo­ple like Oswald Spen­gler, who linked weak cur­rency to racial weak­ness in The Decline of the West. If you google “weak dol­lar” and “white race” you’ll see the idea hasn’t gone away.

But of course it’s not that sim­ple. A “weak” dol­lar means that other nations find US made goods more attrac­tive, because they’re cheaper. For the last two decades, the Chi­nese have kept their cur­rency arti­fi­cially low/weak. That’s one of the main rea­sons why every­thing you buy is made in China: their cur­rency is “weak,” so their goods are cheap. China has had the world’s fastest grow­ing econ­omy for the last decade at least. It can’t make the stuff fast enough. A weak dol­lar would sim­i­larly raise demand for Amer­i­can goods.; it makes a tourist trip to the US more affordable.

A strong dol­lar, on the other hand, makes Amer­i­can goods more expen­sive, in  the same way that the present weak Amer­i­can dol­lar makes a vaca­tion in Europe, and Euro­pean goods,  more expen­sive. The weaker the dol­lar gets, the more attrac­tive Amer­i­can cars are in Japan.

Chi­nese con­sumers have paid a price for this growth, in that the weak ren­minbi has depressed their pur­chas­ing power. But the Chi­nese govt. decided that mas­sive eco­nomic growth was a bet­ter deal. A weak cur­rency doesn’t seem to have hurt China at all.

The analy­sis of inter­na­tional trade emerged in the con­text of impe­ri­al­ism, and so it’s always highly fraught with con­cern about impe­r­ial col­lapse. When it hears talk of the rel­a­tive advan­tages of a weak dol­lar, The Foun­da­tion for Eco­nomic Edu­ca­tion invokes Orwell and insists decline is at hand. There are whole blogs devoted to the idea that cur­rency decline equals impe­r­ial decline.

In Amer­i­can his­tory, talk about the dol­lar often took the form of “hard money” vs “soft money,” hard money being fig­ured as strong and mas­cu­line and soft money being fig­ured as fem­i­nine, flac­cid, and weak. Do I need to say more?

Debates about money are always about other things.

 

2 Comments

  • And what about the euro? Is there any­thing more galling than a strong euro? It’s prac­ti­cally an oxy­moron! I’ll tell you whom the weak dol­lar has hurt: Ful­bright schol­ars. Those peo­ple are on star­va­tion wages in Europe com­pared to the high life I lived just eight years ago.

    But yes, you’re right: when China has an under­val­ued cur­rency, it’s con­sid­ered sneaky and unfair (and prob­a­bly is, though not par­tic­u­larly impor­tant). When we have one, it’s a sign of the apocalypse.

  • Strong Euro? That met­ro­sex­ual, with its fancy suits and effete tastes? You won’t see the euro firin’ shots and ringin’ bells.

    Also odd is how Amer­i­can polit­i­cal dis­course over­looks the fact that the world’s fastest grow­ing econ­omy is a heav­ily cen­tral­ized, state directed econ­omy. You’d never know, form read­ing Amer­i­can news­pa­per or mag­a­zines, that the Chi­nese govt. does any­thing at all.

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