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Re: Bush fiddles with economy while Baghdad burns
by Bruce McFarling
29 March 2003 13:55 UTC
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> <KenRichard2002@aol.com> 03/28/03 23:27 PM
>Something tells me that the war effort is meant to gear up the economy:  ... 
>4)  the lower dollar relative to the euro insures that European manufactured 
>goods are higher in costs relative to dollar denominated exports,  this 
>protects US manufacturers interests in overseas markets even while demand 
>declines,  because European goods are relatively unattractive given that their 
>costs are inflated;

As a commercial nation, the US could well do with a cheaper dollar.  As an 
imperial nation, the US needs a "strong" dollar, to improve the leverage 
overseas of purchasing power created in the US.  As a corporate headquarters 
economy, a strong dollar makes it easier for US-based corporations to borrow 
the money overseas to finance overseas operations.

To the extent that the current policy as well as current "war on terror" 
semantics for the state of the world try to scare Main Street into supporting 
policies that primarily benefit Wall Street and the big defense contractors, 
while at the same time providing Middel Eastern theatre so televangelists can 
scare more contributions from people with the fear of Armagadden, it makes a 
ghastly kind of sense for a Republican administration.

Dr. Bruce R. McFarling
Lecturer in Economics & International Business
Newcastle Graduate School of Business
University of Newcastle
Callaghan NSW 2308
(02) 4921 7962 (W, voicemail)
(02) 4921 7398 (FAX)

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