> A Competitive Dollar: The Missing Link in President Obama’s
> Manufacturing Agenda
> Dean Baker
> Truthout, January 30, 2012
>
> disadvantage competing with imports. This explains the flood of
> imports coming into the country over the last 15 years.
I respect Dean Baker's work enormously, but things aren't this simple. US elites have systematically looted the US industrial base and invested in speculation rather than factories. US political elites have compounded the damage, by taxing the 99% rather than the 1%, pissing $1 trillion annually on a useless and parasitical military-industrial complex, and starving education and infrastructure.
> The trade deficit is not leading to a fall in the dollar now because
> the central banks in many countries (most importantly China) are
> buying up large amounts of dollars precisely to keep the dollar from
> declining and eliminating their trade surpluses and our trade deficit.
Again, this is a bit simplistic. The semi-peripheries piled up big surpluses because they were savaged by neoliberal austerity and IMF structural destruction packages in the 1980s and 1990s. But they are starting to spend this surplus on domestic consumption and allow their currencies to appreciate (especially China), which is one of the major reasons the crisis hasn't been much, much worse.
-- DRR