Elizabeth Warren Lambasts Foreigners for Propping up the Dollar, Calls for US to Become Official Currency Manipulator
Evil foreigners have wickedly kept the dollar from becoming toilet paper
Democratic presidential candidate Elizabeth Warren called for “actively managing” the dollar to bolster U.S. jobs and growth, a move that would break from a longstanding currency policy agreement among the world’s 20 major economies.
In a plan she released Tuesday, Warren said managing the U.S. currency would “promote exports and domestic manufacturing,” aligning her more with President Donald Trump, who has blamed a strong dollar for hurting U.S. exports, than with past Democratic administrations.
Warren cited currency management by other countries and blamed foreign investors and central banks for having “driven up the value of our currency for their own benefit.” The U.S. should work with other countries “harmed by currency misalignment,” according to the proposal.
“If we can aggressively intervene in markets to protect the interests of the wealthy and well-connected — as we have for decades with bailouts and subsidies — then we can damn well use all the tools at our disposal to protect the interests of American workers,” Warren said in the proposal.
Trump has previously expressed concern about the dollar’s appreciation and Treasury Secretary Steven Mnuchin said in 2017 that an “excessively strong dollar” could have negative effects on the U.S. economy.
The U.S. Dollar Index rose near 50% from its 2008 bottom during the global financial crisis through Trump’s January 2017 inauguration. Since Trump took office, the gauge has given back some of those gains, although dollar strength has resumed once again this year.
Warren’s policy can be seen as an approach favoring a weak dollar and risks a shake-up of previous commitments on currency policies across G-20 nations, according to Mark Sobel, a former Treasury Department official.
“One could just as easily see it as targeting exchange rates for competitive gains, and that is certainly how everybody else in the world would likely see it,” said Sobel, who is now U.S. chairman for the Official Monetary and Financial Institutions Forum.
The so-called strong-dollar policy has been a mantra of the U.S. Treasury Department for more than two decades. Then-Treasury Secretary Robert Rubin in 1995 began promoting the dogma that a strong dollar was in the nation’s interest.
Underpinning the policy is the view that a robust currency reflects a healthy economy and bolsters foreign demand for U.S. debt by reducing the prospect of currency losses. While a climbing greenback helps American consumers by lowering the cost of imports, it also compounds manufacturers’ struggles by making exports less competitive.
The Massachusetts senator released her economic proposals ahead of campaign trips to Michigan and Indiana, where she’s expected to discuss her vision of “economic patriotism” in a part of the country that’s home to the U.S. industrial sector and may be pivotal in deciding whether Trump is re-elected next year.
She has been laying out a series of policy proposal as she tries to build momentum in the crowded field of candidates for the Democratic nomination. Early polls show her bunched with with California Senator Kamala Harris and Pete Buttigieg, the mayor of South Bend, Indiana, behind former Vice President Joe Biden and Vermont Senator Bernie Sanders.
Warren also is calling for scrapping the Commerce Department and putting in its place a new agency called the Department of Economic Development. It would subsume the Small Business Administration, Patent and Trademark Office and take on export and trade powers like the Office of the U.S. Trade Representative. It would also be tasked with research and development initiatives.
“The new Department will have a single goal: creating and defending good American jobs,” [“defending good jobs” ] said the proposal, which is the latest of many policy blueprints she has released.
A second policy blueprint released Tuesday by the Warren campaign, called the “Green Manufacturing Plan,” seeks to invest $2 trillion over the next decade in clean-energy research, manufacturing and exports as part of meeting the targets of the Green New Deal, which Warren supports.