John Carney — The Great Debate Over a Strong Dollar

Exports are a cost and imports are a benefit in real terms of trade.

We still want the stuff we send out to the rest of the world to be worth less than what we take from the rest of the world. If having a floating rate, nonconvertible fiat currency that is used as a reserve currency by central banks around the world helps us accomplish this goal, that's a benefit not a cost.

You don't have to be a free market fundamentalist to see this point. Even if you think that it's important to preserve, say, manufacturing jobs in the United States, your argument doesn't have to turn on the balance of trade. But it is weird to see the side most associated with free markets, the gold standard folks, relying on this kind of thinking.

CNBC NetNet

The Great Debate Over a Strong Dollar
John Carney | Senior Editor

Brad DeLong — Between Greece And Zimbabwe

Brad DeLong takes MMT seriously.

But suppose that you are in an intermediate case, where the Treasury and the central bank do not want to peg the currency (and the internal price level) but do not want to let it (them) do their own thing without limit either? Suppose the Treasury Secretary believes that a strong dollar* is in America’s interest. What you then have is a mix of the polar gold-standard and MMT cases. But what are the proportions of the mix?

Grasping Reality with Both Invisible Hands
Between Greece And Zimbabwe (very short)
Brad DeLong | Professor of Economics and chair of the Political Economy major at the University of California, Berkeley
(h/t Mark Thoma at Economist's View)

* Bob Rubin and his protegés favor a "strong dollar" in order to "keep borrowing costs low," which translates to running a balanced budget or even a surplus, as Rubin advised Democrats in the Clinton administration to do, setting the stage for the first depression of the 21st century. This goes by the name "Rubinomics." See also the Roosevelt Institute piece with links on Rubinomics. The Rubinites are now deficit doves that think moderate austerity is called for now rather than the austere austerity of the sound money crowd.