As I watch the Obama administration blithely ignoring all of the signs of a weakening dollar and the implications of massive spending and deficits, I am reminded of how President Richard Nixon dealt with the collapse of the Bretton-Woods accords on August 15, 1971. (At the time, I was preparing to enter my freshman year at the University of Tennessee and was more concerned with getting ready for cross-country season than I was the economy.) Nixon also had inherited the Vietnam War from his predecessor, just as Obama has inherited Bush’s wars.
Nixon’s response was to lie. The dollar was fine, the devaluation would make U.S. exports cheaper, and the price controls of “Phase I” would stop inflation. All would be well, and it was those blasted foreigners insisting on buying U.S. gold instead of U.S. goods that really was the heart of the problem.Today, Obama and his Krugmanian and Bernankian minions tell us that those blasted foreigners caused the entire problem by saving too much money. While we are not seeing (for now) an upward price movement on most goods, they tell us that the REAL problem is deflation, another lie.
There is one important difference between Nixon and Obama, however. The press hated Nixon, so their was outright skepticism in the media that Nixon was being truthful, although the mostly-liberal/left press tended to think that gold was evil and Nixon’s monetary “reforms” were not leftist enough. Congress responded with a decade of wild spending that ultimately culminated in a near-collapse of the system with inflation and fleeing capital.
Obama does not have to worry about such treatment by the mainstream media. I never have seen such worship of a president in my lifetime as that of Obama (except, perhaps JFK and his “glamorous” administration full of “the best and the brightest”). The press firmly stands behind this irresponsible blast of spending and debt, and anyone who objects is accused of racism and worse.
But, the reality is much, much different. Obama and his people can lie, the press can repeat those lies with impunity, but neither Obama nor his government nor the New York Times can defeat the laws of economics.8:11 am on March 3, 2009 Email Bill Anderson