What is the Ideal Value of the Dollar in Today’s world?

With all this talk lately of which way the economy is going to break (is it going to be depressionary deflation, or hyperinflation?), the question we really need to be asking ourselves is: what is the ideal value of the dollar in today’s world? Barack Obama doesn’t strike me as a gold standard kind of guy, so for the foreseeable future we are stuck with printable money.

If the value of the dollar is high, foreign goods are cheap to us, and our goods are expensive to them. this leads to trade imbalance in their favor. This can lead to a reduction in demand of our goods, reduction of manufacturing, GDP, wages, an increase in debt, etc.

If the value of the dollar is low, foreign goods are expensive to us, and our goods are cheap to them, leading to a boost to our manufacturing and exports.

Complicating this is supply and demand. If every nation in the world pumps up their inflation in order to boost manufacturing, pretty soon you have people working all day to build items that no one really needs any more. Once you have tires for your truck, getting eight more doesn’t do you any good. With the rise of China, we may be approaching that level where the market gets a bit saturated around the edges. When this occurs, it is time to move towards quality, tech, and automation. We can’t compete with cheap foreign labor in kind, nor should we desire to. What do you sell someone who already has all the basics covered? Better versions of what they have. Japan has survived with a currency as highly valued as it is because they sell things that are too complex for others to make.

Printing money doesn’t create wealth, but it does move it around. When they print new dollars, those new dollars are worth just as much as the dollars in your bank; those dollars just aren’t worth what they were the day before.

Back to the question at hand. What is the ideal value of the dollar, in today’s global market? I’d like to see it about 25% lower. Not all at once of course, but maybe over the course of two years.

Who should be the guardian of the environment?

Scientists have a problem. Average people, politicians, and religious zealots have no problem speaking in absolutes. They will pound their fists and say with unwavering conviction that what they are saying is truth incarnate. Scientists on the other hand have dedicated their careers and their world view to truth, the real thing, not that ‘I believe it, so it is true’ type the rest of us use. They can study the world around them and see the huge impact humanity has on the planet; see the dying species, track the changing climate, and still say only that it looks very likely that we are causing irreparable harm. It is therefore up to the rest of us to lend additional weight to their warnings. On an individual level we should be conscious of the impact we have and make an effort to do no harm. We should use our power in the free market to support and labor for only those companies which are environmentally responsible.

Environmental crimes should be prosecuted as strongly, if not more so, than crimes against humanity, if for no other reason then because they are; but who should decide what is ok and what is criminal? Who decides when salmon have been overfished and forests overlogged? Who does the oversight to make sure the crimes aren’t ignored, and the penalties are worse than the benefits? Who has to tell people that their food will be more expensive and their job may be lost? In a monarchy, a king knows that if he thinks in a shortsighted fashion, he, or perhaps his children will likely have to clean up his mess and take the blame. In our current system as a federal republic our elected officials either serve short terms or are oft up for reelection. In a few years, they may be out of office, maybe even handing it over to a rival party. Whenever the media stirs up the latest circus, the politician needs to look busy if they are going to keep their position. If even every tenth politician sides with jobs over sustainability, or short term economics over long term environment, it still causes permanent damage. The diversity of an ecosystem can take thousands of years become healthy and well established. Government agencies such as the Forest Service (an agency of the U.S. Department of Agriculture) are only as good as those who pull their strings.

The question remains, who should be the guardian of our environment? I would support an environmental amendment to the constitution. I think the environment is important enough that it needs to be everyone’s responsibility, both individually and collectively. The agencies can provide an important role, but should not be allowed to hinder the efforts of others. If California wants to reduce its pollution, it is not ok for the executive branch to hinder them. We need to care for the environment with the same fervor we claim for protecting our children and loving our country. It is both of these things.

The importance of a good energy source

I’m convinced that the single best use of our resources at present would be energy research and infrastructure.  Imagine  how our world could be different right now if we had a plentiful, cheap, clean source of energy.  Oil rich countries would lose their sway over other nations. Energy can be used to obtain fresh water and make light. heat, and cold, thus making habitable and farmable nearly any place on the planet.  Those places currently struggling for survival would be able to live comfortably and focus on things like education  and society, rather than scrounging for food and making war. Educated people rend to have fewer children, further reducing the problems of overpopulaton and the problems that come with it.

Crowdsourcing

Some of the deepest foundations of my ideal political framework are based on the concept that incentives are far more effective than legislation or subsidies. I was a huge fan of the X-prize, and some of the recent crowdsourcing methods recently employed by DARPA. Never has the saying, “If you’re not a part of the solution, there’s good money to be made In prolonging the problem” been more relevant than it is with today’s medical research and oil companies. If even a fraction of the money we spend on medication and gasoline were to go into prizes to be awarded to those who meet benchmarks for disease eradication and clean energy, the prize would be too enormous to ignore in very short order.