NEW YORK -- As the Democrats recounted the list of economic woes for which they hope voters will hold George Bush responsible, there was a curious omission. The steady slide in the value of the dollar went unnoted and unlamented.
Yet the dollar's fall is in some ways the signal indicator of the decline of America as an economic power over the last three decades. In contrast to such countries as France, where the value of the currency is a measure of national accomplishment, the U.S. government tends to see a sinking buck as a painless way out of economic binds.
The hope is that American exports will become more competitive, and thus American incomes (measured in dollars) greater. The fact that the trend raises the costs of imports is not mentioned. In fact, the trade deficit has proved surprisingly resistant. The May figure was the worst since November 1990, with exports and imports declining.
"The thing that is noteworthy about America is that we are still running trade deficits with a miserable economy," said Michael J. Harkins, the president of Levy, Harkins & Co., a New York money manager that is betting on a further dollar decline.
The dollar's most recent weakness, especially against European currencies, can be traced to Germany's decision to raise interest rates at a time when the only thing the Bush Administration can think of to improve business is to lower rates.
But the decline of the dollar is a longer-term phenomenon. When Ronald Reagan took office, the average American worker earned $249 per week. Last month the average was $363, a 46 percent increase. But expressed in marks it was up just 4 percent, and expressed in yen it was down 11 percent.
Long term, the implications of a depreciating dollar are for rising inflation and a poorer populace. Markets have seemed remarkably unconcerned, but gold's recent surge could signal a change.