Doug Henwood wrote: > I'd sooner believe that I could be accused of supporting austerity than Dean > Baker!
This isn't the standard Angela Merkel sado-Monetarist kind of austerity, but Dean does say that >> this will require that the dollar fall in value relative to the currencies >> of our trading partners, making U.S. products more competitive.<< The fall in the US$ exchange rate -- especially if large -- means that real wages fall as the price of foreign goods rises in terms of US$. This is better than the "Greek solution" of "hey, let's cut real wages by attacking money wages (and benefits, both private and public)." It's more the Icelandic solution. The problem is that, as Dean says, >> That is a process that will take time. With many of trading partners also in severe slumps, we cannot expect any major improvement in our trade balance in the immediate future.<< In the current mess, isn't it possible that we'll see competing depreciation? If the US depreciates the dollar, that hurts the Eurozone's exports, so they depreciate, etc. It looks to me that the best venue for expansionary monetary and fiscal policies is international. Calling the World Government! -- Jim Devine / "As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality." -- Albert Einstein _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
