Amity Shlaes on the connection between altruism and a weak dollar policy:

[A weakening of the dollar] does not come out of the Bush administration’s typical culture of strength and growth. Rather, it represents a surrender to what we can call the tyranny of the weak.

Consider the logic inherent in the communique’s ‘flexibility’ section, and in the minds of many of its supporters. America is growing faster than Europe. It is growing faster than Japan. It is growing intemperately. America’s greed has generated a current account deficit with a single country, China, that is the largest such gap ever. What’s more, America is too productive. And that productivity is, at least right now, causing the American economy to generate too few jobs at home.

In short, the challenge is not to make the other countries grow faster. It is to slow America to a pace that puts it in step with its weaker peers, Europe and Japan. You start by putting pressure on the dollar with a few remarks about the acceptability of flexible rates.You also press the Chinese to strengthen their currency. A weaker dollar then makes shopping abroad more expensive; the economy slows nicely. [NY Sun]

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