Bush Scandals List

307. The diving dollar

The strength of a currency relative to others is a measure of an economy’s health. The strength and stability of the dollar are especially important because of its prominent role in world trade. That crude oil is still mainly priced in dollars is of great benefit to us since the Federal Reserve can in part pay for our oil addiction simply by printing more money. During the Bush years, however, the political and economic strength of the dollar has deteriorated putting its privileged position in jeopardy. A cheaper dollar allows us to export more but this advantage is more than offset by our insatiable appetite for imports be it crude oil or goods from Asia, especially China.

As a result, between January 19, 2001 and January 18, 2008, the dollar has fallen against most major currencies.

  • Euro -36%
  • Canadian dollar -32%
  • British pound -25%
  • Chinese yuan -12.5%
  • Japanese yen -9%

The smaller decrease of the dollar against the yuan may seem odd at first but it is the result of a very deliberate policy of the Chinese government to encourage its export sector by keeping its currency artificially low against the dollar (and so making its goods cheaper). Even against a sluggish Japanese economy the dollar fell. As in so many other instances, Bush has taken a strength and turned it into a weakness.

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