Today in the Wall Street Journal, David Malpass makes the case for a stronger dollar. I will go farther than he did: If George W. Bush does not take immediate steps (including public pressure on Fed Chair Ben Bernanke to take immediate steps) to strengthen the dollar, along the lines of what Malpass advocates and what Larry Kudlow advocated last week, Bush will go down as one of the worst presidents in American history. Because if he doesn't strengthen the dollar, the economy will utterly tank (which, of course, it is close to doing anyway, mostly BECAUSE of five years of a weak-dollar policy), and then none of the other good that Bush has done will matter. If the economy tanks, the mission in Iraq will be unsustainable as well -- and only a success in Iraq can overcome this president's other disasters, such as the pathetically misguided bumbling in Iraq for the three years before the surge; the Katrina screw-up AND the screw-up of the long-term relief effort as well; the out-of-control spending binge; and other assorted incompetencies.
On the other hand, if Bush strengthens the dollar, and thus rescues the good economy that the 2003 tax cuts (far more than the ones in 2001) played such a big role in creating, then he can still not only keep the ball rolling in Iraq as well but can help the election of the candidate, John McCain, who can see Bush's vision for a transformed Middle East through to at least a somewhat satisfactory conclusion. Bush's reputation long-term will absolutely depend on what happens AFTER he leaves office -- and if he leaves an economic shambles and a Democratic president, none of what he has done will be concluded in a way that bolsters Bush's legacy.
Plus, if he doesn't act now to strengthen the dollar, it will show a degree either of stupidity or of ignorance, or both, that is truly breathtaking. I want to believe better of this president. But really, how much evidence of spiraling gold prices, spiraling gasoline prices, spiraling food prices, and tanking dollar value will it take before he realized that all of those items are connected?