Wednesday, January 25, 2012

President Obama Did Not Talk About the Over-Valued Dollar

Dean Baker.--SS

President Obama Did Not Talk About the Over-Valued Dollar:

That is a point that would have been worth making in an analysis of President Obama's proposals to encourage job creation in the United States. The value of the dollar is by far the most important determinant of trade balance. If the dollar is over-valued by 20 percent this is equivalent to putting a 20 percent tariff on U.S. exports and giving ou a 20 percent subsidy for imports.

If President Obama were serious about increasing U.S. employment in manufactured then it would be expected that he would say something about the over-valued dollar and his plans to bring it down. The fact that he didn't say anything about the dollar's value should have been noted in this piece.

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