Vol. 2 No. 10 (February 2004)

Uncommon Denominator


The Newsletter of the Commonweal Institute
www.commonwealinstitute.org

"Administration, n. An ingenious abstraction in politics, designed to receive the kicks and cuffs due to the premier or president."
-- Ambrose Bierce, from The Devil's Dictionary

 

CONTENTS

Talking Points: Strong dollar, weak dollar
Wit and Wisdom: Going to Mars
Eye on the Rightr: The aesthetics of conservatism
Quoted! Dick Armey on the Jewish mind
Featured Article: Audrey Schulman on global warming
Endorsements: Anna Eshoo
Get Involved: Spread the word; become a contributor




TALKING POINTS

The value of the U.S. dollar is a concept that can seem either too unimportant or too complex to bother with -- except, of course, if you're an American traveling abroad and thinking about exchange rates. But the remarkable weaknesss of the dollar right now, in the context of the ongoing globalization of finance, demands that we think seriously about the dollar's value on international currency markets. In late 2000, the U.S. dollar would have fetched €1.20 (Euros). Today it would buy you only about 80 Euro cents. That's a drop of about one-third. What does this mean? How might this situation affect ordinary Americans? Are there dangers here that need to be addressed sooner rather than later?

A quick primer. The worldwide system of free-floating exchange rates resembles the supply-and-demand equilibrium of the stock market. Instead of purchasing shares in a company, however, governments and institutional currency speculators purchase the currency of another country. The balances traded are of a magnitude that they can finance national deficits and, in rare cases, speculation can actually send countries into recession. As in the stock market, faith in the positive prospects of a particular country will drive up its currency relative to those of other countries. Conversely, doubts about the health of a country's economic system are reflected in an unfavorable (or weak) exchange rate.

There are advantages and disadvantages to both a strong and a weak dollar. A strong dollar discourages rapid inflation and makes foreign products (including travel) cheaper for American consumers. Additionally,
U.S. manufacturers enjoy lower-priced raw materials from foreign suppliers. On the other hand, U.S. exporters find their products harder to sell abroad and U.S. producers must compete in the domestic marketplace with cheaper foreign goods. A weak dollar, by contrast, allows companies to increase their sales abroad and diminishes foreign competition in the American marketplace. Because of this decreased competition, however, inflation is likely to increase and at some point the price of foreign goods will inevitably rise for the consumer.

To return. The primary reason for the current weakness of the dollar is that the Clinton administration's "Strong-Dollar Policy" has been quietly dropped by the Bush team, under pressure from American exporters and in the face of dismal employment statistics (see Edmund Andrews, "Strong Dollar, Weak Dollar: Anyone Have a Scorecard?" New York Times,
September 24, 2003). The basic logic of a weak-dollar policy during an economic downturn goes something like this: A weaker dollar will help domestic businesses sell their goods abroad, which raises both profits and the need for employees, which in turn reduces unemployment and raises consumer spending, which leads to a better life for everybody and reelection for incumbents.

But when we consider the economic details of this policy change, and seriously weigh the risks involved, the conclusion that presents itself is that the administration is serving the interests of business more than the needs of ordinary Americans. Like excessive deficit spending, a dollar that is too weak might buy some short-term benefits at the cost of long-term economic weakness. Not only might it make croissants and Saabs harder to buy right now -- it might be unaffordable itself as economic policy. That is because currency value and federal budget deficits are closelyy connected.

Recall the Asian financial crisis of 1997. On the strength of its bally-hooed reputation as one of the "Asian Tigers,"
Thailand had experienced massive amounts of investment flow into the country, mainly in the form of loans for speculation on real estate. Eventually, however, the ratio of unreliable to reliable debt had grown to the point of making the global investment community nervous. When the Thai government released the Thai Baht's peg to the U.S. dollar (permitting its currency to fluctuate normally), investors and speculators jumped at the chance to secure or obtain their gains by fleeing the Baht for safer currency havens such as the yen and the dollar. The Baht began to fall. Thailand's attempts to shore up its currency by selling its U.S. dollar reserves proved futile. Even wealthier Thai investors did everything they could to exchange their Baht-denominated investments for dollar-denominated investments. To this day, Thailand has not completely! recovered, though progress has been made.

It is hubris to suggest that this sort of economic catastrophe could not happen in the
United States. Consider. Since a weaker dollar makes U.S. products, including financial instruments such as government bonds, less expensive abroad, China, Japan, South Korea, and Taiwan have amassed more than $1 trillion in U.S. Treasury notes over the past few years -- this is how we have financed our federal budget deficit. As the deficit continues to soar, how much longer will it be untiil our creditors begin to seriously doubt, as they did in Thailand, whether we can repay our debt? An economic reckoning of this nature would cause the dollar to plummet even further, making repayment of our debt (denominated in dollars) increasingly difficult. (See the Federal Reserve Bank of Chicago's 1997 pamphlet on fluctuations in the dollar's exchange rate). The dire straits of our repayment probl! ems would heighten worries about American fiscal solvency, leading to a further devaluation in the U.S. currency -- and on and on the self-reinforcing cycle would go.

There is more peril in the event of a U.S. dollar meltdown. Because the federal reserves of many other countries consist of dollars, the foundations of their economies would also be shaken -- as if the gold in Fort Knox lost half of its value in the space of a few days (see James Paul and Mariana Quenemoen, ";Fall of the Dollar," Global Policy Forum, August 2003). In addition, the diplomatic position of the United States could be undermined by a combination of currency weakness and foreign debt. For instance, it has been suggested that the level of American debt now financed by Beijing ($350 billion) could be used as diplomatic ammunition by China in an attempt to achieve certain political aims, such as ensuring American complicity in a more aggressive stance towards Taiwan (Ian Williams, "China-U.S.: Double Bubbles in Danger of Colliding," Asia Times Online, January 23, 2004).

The most sensible policy right now is a middle-of-the-road policy -- taking the necessary steps to ensure that the dollar is neither too high, nor too low. This means sharply reducing ourr budget and trade deficits as well as bringing the American economy back to full steam. In addition, the U.S. must reassure both American citizens and foreign investors and governments that a catastrophic devaluation of the dollar will not occur, and that exchange-rate intervention is not off the table as a policy choice. Otherwise, skittish or opportunistic investors might decide that the dollar is no longer the safe haven it has long been -- in which case prepare yourself for the most dramatic currency devaluation in history. "Financial markets," Paul Krugman has written, "are not in the habit of giving countries the benefit of the doubt." ("Bahtulism:Who Poisoned Asia's Currency Markets," Slate Magazine, August 15, 1997).

-- Jon Gray




WIT AND WISDOM

Top Ten Reasons George W. Bush Wants To Put A Man On Mars

10. Dick Cheney needs a new undisclosed location
9. It's part of his "No Planet Left Behind" initiative
8. Great deal on the off-season airfare right now at Expedia.com
7. Maybe we'll find some weapons of mass destruction there
6. We've run out of places on Earth to drill for oil
5. Hoping to get Mork's autograph
4. We cannot back down until the people of Mars hold free elections
3. Dude, free Mars bars
2. Why not? It's not like we have an enormous debt or failing economy
1. Pete Rose bet him we wouldn't do it

-- The Late Show With Dave Letterman, January 14, 2004




QUOTED!

"I always see two Jewish communities in
America. One of deep intellect and one of shallow, superficial intellect." -- Dick Armey, former House Majority Leader, as quoted in the Bradenton Herald, Sep. 22, 2002


EYE ON THE RIGHT

"Aesthetic" is probably not the first word that springs to mind in a discussion of modern American conservatism. Dick Armey, aesthetic? Deregulation, aesthetic? How can that be? Aren't conservatives unresponsive to art, hostile to the artistic community?

Well . . . yes and no. Much of the confusion turns on the meaning of the word "aesthetic." Aesthetic expression does include the fine arts (movies, paintings, sculpture, etc.) but it also transcends them. In its fullest sense, aesthetics refers to the use of coherent symbol systems to communicate feelings, to affect perceptions at a subconscious level, to fly beneath the radar of skepticism.

Political thinkers from Plato to Tolstoy to Karl Rove have recognized that a political aesthetic serves the purpose of social cohesion. Cultural and political unity cannot be achieved by force alone. Rather, an aesthetic system devised and managed by political elites must seek to enlist citizens in a common cause. The people must imagine themselves as part of a national community (or of a group that substitutes itself for the national community), and this imagining depends upon a shared set of evocative symbols.

In these terms, modern American conservatism owes much of its success to the mastery of aesthetics. Indeed, the outrage of conservatives at various forms of popular art (from "Murphy Brown" to Chris Ofili's "Holy Virgin Mary") only betrays their understanding of how much the aesthetic matters in contemporary life. The real dynamic, of course, is that conservatives in the
United States have promoted, for close to 30 years now, a rival aesthetic vision. That vision has been remarkably political, remarkably subtle, and remarkably effective. Let's consider some of its principal features and strategies.

The most basic form of political aesthetic (but for that reason perhaps the most visceral) involves personal physical appearance. Naturally, in our age of visual media, looks matter, and every political figure seeks to maximize his or her own (telegenicity), while every political community seeks representatives who have the raw goods, the telegenic presence, the sex appeal, the smile. Compared to where they were a generation ago (Nixon, Schlafly, Bork), the conservatives have come a long way (farther, one might hazard, than the left), and their new generation of televised representatives -- Ralph Reed, Ann Coulter, Tucker Carlson -- are almost universally good-looking. Innocuous, you say? Maybe. But just remeember human history's catalogue of abuses that people have justified through appeals to aesthetic bodily ideals.

A more complicated form of political aesthetic involves the fashioning of a compelling public personality through the invocation of deeply rooted cultural myths. From this perspective, the image of the cowboy, adapted to remarkable effect by Ronald Reagan and his stage managers, has proved itself much more potent than the image of, say, the peanut farmer -- a lesson not lost on the current Presidential team. Achieving the cowboy aesthetic requires the artful orchestration of thhe right symbols: the setting (Crawford Ranch, old-fashioned tractor in the background); the attired (weathered boots, hefty belt buckle); the bodily presence (confident stride, elbows outthrust); the speech (a drawl, a predilection for the vernacular). The overall effect of the aesthetic is to obscure reality (in particular, the fact that George Bush has never had anything to do with ranching), in the creation of what, at its logical extreme, amounts to a cult of personality.

More generally, the modern conservative aesthetic depends on the aggressive appropriation of shared cultural symbols. The more all-embracing a political aesthetic is, the greater its unifying social power. Hence the ongoing campaign to associate everything from American flags to marriage licenses with specifically conservative policies. The intent is to form a homology in the public mind between conservatism and Americanism. The aesthetic, in this case, works to recruit people to a political community by asserting an identity between that political community and the nation as a whole. Its power to do so is greater during times of war -- another lesson not lost on the Right's image-making machine.

We might also credit today's conservative movement with an "aesthetics of worldview." The signal feature of the American Right over the last 30 years is that it has achieved, with a few exceptions, a remarkable consistency of ideology. The "unities" of art have been praised ever since Aristotle named them, and the ideological unities of modern American conservatism stand in sharp aesthetic contrast to the unseemly mess that we usually find on the Left. This conservative coherence draws on the ideas pumped out by a relatively small number of well-funded think tanks, and it communicates itself to the public through the "echo chamber" of the Right's formidable communications machine. As we contemplate the political consciousness and behavior of Soccer Moms and Nascar Dads, we would do well not to underestimate the psychological power that an aesthetic coherence of message provides -- whatever that message might be.

The final major strategy of modern conservative aesthetics is the use of spectacle and what Philip Rieff, as early as 1953, identified as the "emptying of discursive values" (World Politics 5:4, p. 480), by which he means a growing resistance to reasoned debate. In all fairness, spectacle runs across the ideological spectrum, and it has been a feature of American politics for a long, long time. The distinctive contribution of today's Right, however, is a speciously "populist" anti-intellectualism that seeks to shield political spectacle from public skepticism and scrutiny. Spirited debates that are a sign of healthy political engagement are decried by today's conservatives as "divisive" and "partisan." Two of the primary targets of conservative rhetoric and policies are the schools and the media -- precisely those institutions charged with discovering the truth, and with helping the public discover it f! or themselves. In order to be effective, the aesthetics of spectacle must short-circuit critical thinking and thereby limit people's awareness of how images motivate them on emotional levels. The "discursive values" Rieff describes, by contrast, celebrate the mindful analysis of ideas, principles, events, decisions.

The conservative aesthetic, we might say, is a "faith-based" aesthetic that depends upon an essentially religious epistemology. That is, it asks us not to question, but to place our faith in the well-oiled machine and the leaders whom it has produced. And just as we should be wary of the aesthetization of politics, so should we be wary of the de-secularization of politics. For then policy becomes doctrine; dissent becomes heresy; debate becomes schism; conflicts become crusades; supporters become disciples; and secular things become sacred -- and that is the true profanation.

The conservative aesthetic seems particularly effective when it comes to mobilizing young people, who are generally less equipped to resist its lure. That is why conservatives now seem more "cool" than liberals on college campuses -- and what does the word "cool" express if not a sense of aesthetic superiority? No accident, then, that the conseervative movement is aggressively working the college scene through scholarship foundations, campus organizations, student newspapers, lecture series, and rival "academic" publishers.

In his landmark essay "The Work of Art in the Age of Mechanical Reproduction," the German writer Walter Benjamin put his finger on the dangerous relationship between politics and art. "All efforts to render politics aesthetic," Benjamin wrote, "culminate in one thing: war. War and war only can set a goal for mass movements on the largest scale while respecting the traditional property system." In 2004, do we find ourselves living out that grim prophecy?

No one can turn back the cultural clock, and it makes no sense to think that politics in a media age will somehow wean itself from the aesthetic. As a society, however, we can and must commit ourselves to two vitally important goals. The first is a renewal of meaningful political participation, a renewal that depends on recognizing the value of critical thinking, lively debate, and spirited dissent. The second is a refusal to allow political aesthetics to serve only political ends while blinding us to the larger responsibilites of politics, however we might define them. Insofar as a political aesthetic becomes an intellectual anaesthetic, to that degree have we compromised our democratic principles and left ourselves vulnerable to the charms and the chains of a crafty few.


FEATURED ARTICLE

The following is an excerpt from "Smoke Signals: Global-warming activists can learn from the anti-smoking campaign," by Audrey Schulman.

"One of the strongest weapons in the tobacco war has been anti-smoking commercials. The war against fossil fuels could employ the same technique. Recently, a national survey conducted by the FrameWorks Institute, a Washington, D.C., communications think tank, found that anti-global warming ads can be highly effective if they feature a carefully chosen spokesperson (business executives, religious leaders, and scientists were generally well-received) who explains the problem with a simple analogy (such as a blanket of carbon dioxide trapping heat above the Earth) and points out viable solutions….

"Following the example of anti-tobacco activists and attorneys, several lawyers are currently preparing class-action suits against companies that have recklessly toyed with the climate. Perhaps a group of children will one day sue ExxonMobil for spoiling the planet and compromising their futures. I can imagine TVs around the country tuned in to see a small girl testifying in court, perched on a phonebook. I can imagine the images in viewers' minds shifting, changing what they feel when they turn the key in the ignition. I can imagine state officials -- already addicted to cigarette taxes and settlements -- leaning closer, smelling big money."

Click here to read the whole article.


ENDORSEMENTS

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