Debasing the dollar

From time to time, prominent right-wing voices — most notably Paul Ryan and Sarah Palin — get pretty worked up about the value of the U.S. dollar. This morning, Republican presidential candidate Rick Santorum picked up on this, accusing President Obama of having “devalued our currency and … debased our dollars.”

Now, part of the argument here is the right’s assumption that a “weak” dollar is necessarily a bad thing. Since those unfamiliar with the basics of monetary policy understand “weak” to mean “bad,” the recent trend is evidence of President Obama pursuing the wrong course.

Putting aside how terribly misguided this is, Matt Yglesias flags an interesting chart, showing the exchange rate history over the last 30 years.

As Paul Krugman noted in April, “[R]ight now we have all these people hysterical about the debasement of the dollar, but where were they when the real devaluation was taking place? Funny how we didn’t hear all this hysteria between 2001 and 2007. For the record: while I had plenty of complaints about the Bush economy, the declining dollar was never among them.”

Of course not. Indeed, one never really heard liberals running around condemning Bush/Cheney for “devaluing our currency and debasing our dollars” because the left didn’t see this as a discouraging development.

But looking at the chart, it appears the sharpest declines in the value of the U.S. dollar in recent decades occurred during Reagan’s second term and throughout the Bush/Cheney presidency.

If far-right Republicans take this issue seriously, where have they been all of these years?

The answer, of course, is that they don’t take the issue seriously at all. Some, like Paul Ryan, feel better about themselves when they pretend to know something about monetary policy, and others, like Palin and Santorum, are just so desperate to attack the president, they don’t much care whether it makes sense.