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Boudreaux on the Falling Dollar

GMU econ dept chairman Don Boudreaux has a wonderful piece explaining the causes and effects of the weakened dollar:

http://www.csmonitor.com/2007/1128/p09s01-coop.html?page=1

What I think is especially interesting about this kind of matter is that the policy-makers don't seem to recognize how their anticipated regulatory action is likely one of the causes of the very problem they will attempt to solve.

Boudreaux writes:


By 2009, Democrats may well control the White House, too. Investors generally believe "that government is best which governs least." From that perspective, partisan gridlock is desirable because it keeps excessive political interference in the economy at bay. But with Democrats in control, the antitrade, pro-tax, "don't just stand there, regulate" forces will be unleashed. Such a prospect is already weighing down the dollar.[emphasis added by KDR]

The future can govern the past! Perhaps policy-makers should re-watch "Back to the Future II" for a remedial lesson. :-)

/KDR

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