Is The Dollar (And US Power) On The Decline?
For decades the US dollar has been the predominant international currency, but that position has been challenged in recent years as debt and a growing deficit have hobbled the American economy. While here is no doubt that long-term fiscal problems remain unresolved, John Williamson of the Peterson Institute for International Economics argues there is no immediate “prospect of an international currency becoming a threat to US dominance. Moreover, I do not think the dollar is likely to be seriously challenged in this role in the next quarter century.”
Laying out his thesis in a lengthy article, Peterson examines how the currency has shaped US power and whether the “widespread use” of the dollar enhances US global power.
Africa On The Rise – Or Not
Rick Rowden of Foreign Policy magazine offers a counter to positive reports from the Dark Continent about its economic growth and says that absent a robust manufacturing sector, progress will prove elusive.
The view that Africa is on the rise was remarked upon in a recent Sebastian Mallaby in The Financial Times, which was cited on this blog.
Mallaby, who cautions that the growth is not continent wide, wrote that those while many “wondered whether the revival was merely the result of oil discoveries,” or other statistical anomalies, that “it turns out that the standard numbers probably understate Africa’s advance.”
“Today, for many champions of free markets, the mere presence of GDP growth and an increase in trade volumes are euphemisms for successful economic development. But increased growth and trade are not development,” says Rowden, adding that Africa continues to lag in terms of manufacturing and industrialization.
In fact, Rowden notes, most African countries are either stagnating or moving backwards when it comes to industrialization, which is reflected in the “decline in the importance of manufacturing in Africa’s exports, with the share of manufactures in Africa’s total exports having fallen from 43 percent in 2000 to 39 percent in 2008.”
Was The Fiscal Cliff Showdown Evidence Of Congress Working?
Failure of leadership. A sign of a dysfunctional Congress. Government gone awry. It is an almost uniform opinion among “opinion makers” that the fiscal cliff debate exposed government’s incompetency. Almost. Writing in his Reuters column, Anatole Kaletsky says week’s deal “marked a genuine, and most likely sustainable, breakthrough for reasons of both politics and economics” and showed that “the U.S. Constitutional system is now less dysfunctional than widely believed.”