December 04, 2003

Scary news from the real ‘Old Europe’

You may not have noticed, but the U.S. dollar is in near freefall in world currency markets. It has lost about 40 percent of its value against the Euro in the last couple of years, and more than 20 percent against the Japanese yen. This is good news for U.S. manufacturers, agribusiness and service providers with overseas operations, as their products become much more competitive in foreign markets. But it causes great anxiety among the overseers of foreign economies. Just how anxious the Europeans are becoming is revealed in this truly amazing disclosure that they’re thinking of resorting to currency controls if the dollar’s plunge continues. The only economic “tool” of governments that I can think of that’s held in wider disrepute among economists than currency controls, which restrict the flow of money across national borders, is the central economic planning of the old Communist bloc, which failed everywhere it was tried. Currency controls were common among individual governments in Western Europe into the 1980s, and rarely achieved their stated goals. In today’s world we’d have to multiply this folly by orders of magnitude because the controls would, presumably, be binding on the entire European Union, an economy roughly the size of ours. The likely outcome would be market chaos followed by an economic contraction that would make our recent recession seem mild indeed. So far, this is only jawboning by EU bureaucrats in Brussels. But let’s hope it gets the Bush administration’s attention before it gets out of hand.

Posted by tbrown at 01:58 PM

Here’s your weekend reading

In chaotic situations like the one in Iraq, the fog of daily events often obscures the real situation. Fortunately, there are antidotes. The best current reading is George Packer’s “Letter from Baghdad” in The New Yorker. It is long, but worth the time. What happens in Iraq is critically important, and Packer digs in for a gritty, detailed look at how we got where we are, what’s working and isn’t and why we need to have reasonable expectations about what we can accomplish. After you’ve had another latte, take a look at these two excellent blog posts on the same subject: Daniel Drezner Belgravia Dispatch

Posted by tbrown at 01:51 PM

How lies reveal the truth

It’s old news that the Bush administration has a real hard time telling the truth. But the fundamental mendacity of this gang keeps popping up in the weirdest, most inexplicable and just plain dumbest ways. The most recent example comes from President Bush’s visit to the troops in Baghdad. No sooner was everyone back in D.C. than head White House flack Dan Bartlett sought to extend the life of this story by asserting that the total secrecy essential for the trip was nearly blown when a British Airways jetliner spotted the presidential 747 off the west coast of the British Isles at dawn (a pretty picture, isn’t it?) “Is that Air Force One?” the BA pilot supposedly asked. After a few moments of silence, he received a message saying, “Jetstream 5.” That’s an executive jet a fraction of the size of a 747. “Oh,” the bemused British Airways pilot said. Now, just on the face of it there are problems with this story. Given the vertical and horizontal separation rules for airliners and their closing speeds, which are eyeblink quick unless they happen to be on the same course, it is unlikely that the BA pilot could have distinguished one 747 from another. Especially by dawn’s early light. Unless there was a near-miss (now that would have been news). Anyway, British Airways quickly expressed skepticism that the encounter ever happened. Then the White House changed its story. Then, British Airways said the new story never happened either: "We've looked into it," a spokeswoman said. "It didn't happen." Anyone should have been able to figure out they’d get caught at this. But they do it anyway. They can’t help themselves. Joshua Marshall, who dissected this administration’s lying "style" in this piece in Washington Monthly, also has been tracking the progress of the Air Force One incident on his blog. His scorn for Mary Matalin, a former administration official who basically seems to think lies are useful to reveal the “truth” about the president, alone is worth the visit.

Posted by tbrown at 01:47 PM