The absolutely crazy thing is that first Bush, then Clinton and Co. went to great lengths to bring exports from c. 5-6 percent to 10-11 percent of GDP at the same time that they demanded that financial mkts be liberalized, meaning that US fin. capital would become more hegemonic ( I distinguish bank loans to Asia, mostly made by Japan and Europe, and junk or high yield bond markets, in which the US is far out in front). Together these policies thrust the US into world economy in a bigger than ever way. Then we are told that the world has become "globalized," as if by magic!!! And that we must act accordingly! This may be the son-of -a-bitch's (Clinton's) biggest crime.
I add that since most G7 countries produce more or less the same Dept. I Products and services (with the US having a huge edge in high tech equipment/Silicon Valley, which was the second leg of capitalist support for Clinton, the first being of course Wall St.), a cheaper dollar can and I believe has resulted in more US Dept. I exports, perhaps at the expense of competitors. (E.g. Barbara and I were shown in Japan in the early 1990s a "mother machine," originally designed in the US and Germany, with the tolerances so small that neither US or Germany had at that time achieved them. A laser machine. At least four countries export mother machines.
As Doug at least knows, I've been obsessed with this export/GDP increase for some time, also the implications of the fact that the North exports natural elements of capital and Dept. I products and services, increasingly so. We get cheap CSR goods from Asia etc. Not to speak of US firms in Asia dominating or sharing in many host country markets. Our main Dept. II export is Hollywood products, naturally!
US strength has been partly a function of Japanese and European investments in the US ( I mean, new real investment), while no one invests in Germany and only a handful in Japan. I mean, hasn't there been a reallocation of productive (industrial) capital to the US, esp. Dept. I, and hasn't this been a factor in developing a higher X/GDP ratio as "liberalized" financial mkts?
Yes, weaker countries devalue to stay in the same place. But weaker countries can be.....Britain! Japan! (today the yen is falling again, as it should). Not only the Taiwans, Koreas, and much weaker countries. There's no question in my mind that the Clinton govt. talked down the dollar vis a vis the yen, a huge devaluation, from the moment he took office. Much less so vis a vis the mark. Nor at all vis a vis other currencies (or an average of other currencies). Which more than suggests that dollar policy such as it is aimed primarily at Japan, which remains a power (which the US permitted during the Cold War, but not any longer; so.......the US sticks it to Japan after 1993 and see what it gets, a depressed Japan threatening to pull down world economy as a whole!!!).
I'm telling you, friends, economic analysis seems to have little use with respect international relations, esp. between US and Japan! Basically I see the whole thing as a nest of political problems, not primarily economic issues. Rakesh, did you ever get my letter?
Jim O'Connor