Hard to imagine why the administration is ignoring the Euro

<![CDATA[With the Euro up 36 percent since the beginning of the Bush Administration and the dollar “dropping ‘like a stone'” since the election, the Bushies should be very concerned about the viability of American products and services in Euro-denominated countries, not to mention everywhere else the dollar has dropped.
The U.S. trade deficit is at record levels—$166.18 billion in the second quarter of 2004—but Secretary of Commerce Don Evans said “there’s no reason to be alarmed” because trade surpluses aren’t always a good thing. It is, of course, a long way from a trade surplus when you are running the largest deficit in history, though that’s not enough to trouble the Bush Administration.
Add to this the fact that the United States ran its first agricultural trade deficit since 1986 in June and August, a “very worrisome” development according to Sung Won Sohn, Wells Fargo & Co.’s chief economist. If the United States loses the confidence of foreign investors or, more critically, a foreign government such as China, which acts as a kind of deficit financier for the U.S. deficit by buying bonds, cuts is lending, the economy would be hard hit.
At a time when the Bush Administration has alienated most of the governments of the world by acting with disdain for diplomatic manners, the world could exert a harsh economic price on us through a concerted attack on our trade deficit financing. Of course, they won’t let the U.S. economy tank too badly, because it would redound on everyone else, but the price of cooperation in restoring the dollar will be high.
Just as the Federal Reserve as carefully and preemptively managed interest rates in the United States, the Bush Administration must act to support the dollar in advance of the opportune moment when our rivals decide it is time to act to bring us down many economic notches.
This isn’t a subject that will be much helped by prayer or threats of armed force.]]>