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November 19, 2007
Two dollar-correction tales
The dollar can decline along the Adam Smith path or the Jim Cramer path, says David Ignatius in The Washington Post. In the “Adam Smith version,” natural market mechanisms help the dollar make its necessary downward slide gradually. China starts saving in other currencies, the declining greenback shrinks our deficit, and then “the dollar eventually will begin to rise again.” But in the “Jim Cramer version,” the dollar’s “gradual adjustment” turns into a “stampede,” fueled by “emotional, volatile traders.” The Fed raises rates, we stop consuming, and the U.S. sinks into a recession. The sinking dollar can be “part of the cure,” but Smith makes the medicine go down easier.
A tale of two strikes
The striking Broadway stagehands will probably beat the Hollywood writers back to work, says David Carr in The New York Times. The stagehands—“400 or so (mostly) beefy guys”—would seem to hold fewer cards than the 12,000 writers, who “fuel a much larger enterprise” with their “creative expertise.” But unlike the writers, “the stagehands have actual leverage” in their ability to shut down “moneymaking entertainment” that can only be seen at a specific time and place. Also, while Broadway producers are losing millions, Hollywood studios don’t seem to mind the strike much and even seem to be holding out to break the writers guild.
of The Week magazine.